AFTERMATH OF WAR : Business as Usual After Gulf Oil Scare? : Energy: Even though the U.S. just fought a war, in part to protect access to Mideast oil, few Americans seem to have drawn lessons about energy use from the conflict.
The war in the Persian Gulf appears to be over. Gasoline prices are well below $1 a gallon again. And motorists at some local stations Friday fueled their cars as if there were no tomorrow.
“Why should we worry about gasoline?” asked James Woo, 68, of Hollywood as he pumped regular leaded gasoline into his vintage Ford at a Shell station on Sunset Boulevard. “I paid for it when it went up to $2 and when it was down to $1.50,” the kung fu instructor said. “What’s the difference?”
As America reveled in its victory in a war fought in part to protect access to Persian Gulf oil, other motorists interviewed at Los Angeles service stations were less cavalier about the nation’s energy situation.
But the lessons about the country’s use of oil to be drawn from the crisis of the past seven months clearly depended on whom you asked. The analyses of the war--by motorists, dealers, refiners, oil producers and multinational oil executives--were colored by self-interest.
Few of those interviewed Friday called for wholesale changes in the way this country uses oil--much to the dismay of one consumer advocate.
“We need to be concerned--and this lesson is very important--that U.S. dependence on foreign oil, particularly from the Persian Gulf, has grown since 1985, and we don’t have to be so dependent,” said Ed Rothschild, director of energy policy for the consumer group Citizen Action in Washington.
At one point last year, imports of crude oil approached half of the total crude oil consumed in the nation. Now, imports account for about 40% of the total used. Most of those imports come from the Persian Gulf, home to about three-fourths of the world’s proved oil reserves. About two-thirds of the oil consumed in this country goes into transportation, mainly the single-family car.
“I am concerned that now that the war is over and now that oil prices are down to where they were in July, the pressure has diminished . . . and we may not move forward strongly and vigorously to reduce our oil usage and shift to other fuels and invest more in energy efficiency,” Rothschild said.
Richard J. Stegemeier, chairman of Unocal Corp., the nation’s 10th-largest energy company in 1990 sales, was apprehensive as well.
“I’m not sure even now we’ve learned the lesson that we can’t just depend on (the Middle East) for our principal source of crude oil,” Stegemeier said. “Unfortunately, I’m not sure we have any quick or easy way out of it.”
Mark Spicer, 25, a plumber from Van Nuys, saw no way out as he gassed up his Cadillac in Universal City on Friday. “I don’t think you can do anything to lessen our dependence (on Middle East oil),” he said. “You can’t really tell people not to drive their cars.”
Judi Lipson, a 24-year-old student from Studio City, agreed that the country was too dependent on Middle East oil. But she said she would be willing to pay higher taxes for gasoline or buy an electric vehicle, even if it cost more than a gasoline-powered car.
Among dealers, Ara Kessedjian, owner of the Hollywood Shell station where Woo filled up, shrugged off questions about the lessons of the war. “We do have enough gas to supply the public, and the public is happy,” he said simply.
Tim Hansen, manager of a Shell station in Bel-Air, did take one lesson from the crisis: “I think it’s a good idea to keep a good reserve on hand in the event something like this happens again.”
The farther one gets from the pump, the more concern there is about imports. But the concern is not altogether altruistic.
“I would hope this country is going to learn something from (the war), particularly the policy-makers,” said David R. Greene, vice president of M. H. Whittier Corp., a closely held company in Taft, Calif., that drills and produces oil in the state.
His answer: “Some kind of production policy that encourages domestic production . . . and we certainly don’t have anything now.” Greene said he also favored conservation policies, but added: “It’s difficult to encourage conservation at the same time prices are real low.”
Unocal’s Stegemeier praised President Bush’s proposed national energy strategy for its emphasis on new U.S. oil drilling, but criticized it for downplaying conservation, energy efficiency and development of renewable and alternative energy sources.
“But I also believe that many people think there are quick, simple and inexpensive ways to achieve these other four parts of a national energy strategy, not realizing that they are neither quick nor inexpensive,” he added.
Stegemeier favors higher mileage standards for cars and imposition of an oil import fee that would tax imported crude. Such a fee would also raise the cost of domestically produced oil, he conceded--but that would in turn encourage conservation and stimulate development of alternative and renewable energy.
His position puts Los Angeles-based Unocal at odds with other international oil companies, which oppose any fees on imported oil--in part because they import so much oil themselves. Last week, Atlantic Richfield Co. Chairman Lodwrick M. Cook argued in favor of higher gasoline taxes to encourage conservation.
But most oil companies oppose new taxes, too.
“One of the things you learned (during the crisis) is that the free market works, though it’s painful at times,” said Joe Lastelic, a spokesman for the American Petroleum Institute, the oil industry’s main trade group in Washington.
Independent refiners--who turn into gasoline oil drilled by others--also defend the free market, despite the roller coaster they rode during the Gulf crisis. Oil prices, $21 a barrel before Iraq invaded Kuwait on Aug. 2, soared to $41 a barrel in October before plunging on news of the war to settle around $18 now.
“I don’t think any sort of intervention or controls would have yielded a better result than we have achieved by just having the market mechanisms in place,” said Jack Elgin, executive vice president of Golden West Refining Co. in Santa Fe Springs.
John Drosdick, president of Ultramar Inc., an independent company that refines and markets gasoline mainly in California, argued for higher product prices to encourage conservation and more “reasonable” policies to encourage more oil drilling in the United States.
But, he added: “We must face the fact that we are going to be dependent on foreign oil.”
Rothschild’s group opposes gasoline taxes as regressive. It opposes import fees because they prop up crude oil prices for domestic producers. Instead, his group favors tougher fuel efficiency standards.
Will the public learn anything from the most recent oil crisis? “It’s business as usual,” said Greene, the Whittier Corp. executive. “Yesterday’s crisis is long since forgotten. Let it rain for a week, and we no longer have a water problem.”
The War at the Pumps
After skyrocketing in the first days of the Persian Gulf conflict, the price of gasoline seemed to defy developments in the war. Chart shows movements in the national average price per gallon of self-serve, regular unleaded gasoline.
Aug. 2: Iraq invades Kuwait
Nov. 29: U.N. Security Council authorizes use of force against Iraq unless it withdraws by Jan. 15
Jan. 15: Deadline for withdrawal passes
Jan. 27: Allies say Iraq has unleashed huge Gulf oil slick
Feb. 24: Ground war begins
Feb. 27: President Bush declares allied victory
Source: American Automobile Assn., Los Angeles Times
