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.cb STATEMENT ON THE GASOLINE SHORTAGE


	We are most puzzled and concerned by the strange reaction
of the public, the press, the President and Congress to the gasoline
crisis.  All they discuss is how to divide up the shortage; ways
of raising production are almost completely ignored.
If this be Carter's "moral equivalent of war", then his reaction
and that of Congress and the press
seems to be %2the moral equivalent of unconditional surrender%1.

	We believe that the appropriate reaction to the oil shortage
is to act to meet it by increasing production to meet the demand.
Temporary restrictions on use may be justified to meet a crisis,
but taking no action to increase production to meet our needs
can only be the result of political paralysis.

	The facts seem to us to be as follows:

	1. The world can produce enough oil at low production costs
for at least the next ten to twenty years, but the OPEC cartel
will (immorally) turn the screws to an unacceptable degree in order
to achieve its financial, political and ideological goals.

	2. The United States can produce enough fuel to meet its
needs for the next 100 years but at costs that are considerably
greater than even the present cartel price - %2but not more than
we can afford%1.  To do this we must use expensive means of
oil recovery, oil produced by converting coal and oil shale.

	3. Each of these methods will produce oil costing between
α$20 and α$30 per barrel.

	4. The cost of operating the average American automobile
wouldn't be doubled unless the price per barrel of oil went well above
α$100.  This is because the cost of the oil is only part of the
cost of gasoline, and the cost of gasoline is only part of the
cost of operating a car.

	5. The use of automobiles will not be substantially reduced
even by such a doubling.  This is shown by the fact earlier in
mass use of automobiles, the costs were double what they are now
in relation to the incomes of Americans.

	Thus we can produce gasoline at a price far below that
which would force us give up our mobility.

	6. Therefore, the correct policy is simply to plunge ahead,
pay the necessary higher prices, and solve the problem.  We have
already lost six years since the 1973 oil crisis.

	7. Many people are concerned that "environmental gains"
will be lost in the attempt to solve the problem.  Undoubtedly
some will.  Even those environmentalists who favor solving the
energy problem are reluctant to oppose the obstructionism of
their colleagues who oppose every new source of oil.

	8. The longer this intransigeance continues, the more violent
will be the eventual reversal of policy.  Continuation of the
present inaction might force halving the miles driven by the
late 1980s.  This won't produce the change of values environmentalists
desire, just the success of a single issue politician who makes
this his issue.

	9. The country needs a large joint government-industry program
to produce large quantities of oil from coal, shale, and secondary
recovery in a short time.  Full energy independence by 1985 without
loss of mobility is attainable and desirable.
Because we have squandered six years,
this must probably be a crash program like the military production
programs of World War II.  President Roosevelt's reaction to the
start of World War II was to call for the production of 50,000 airplanes,
and double that number were produced.  The "moral equivalent of war"
calls for a similar challenge and response.