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Oil’s outrageous quota system The following article by Observer Editor-at-Large Ronnie Dugger appeared in the Aug. 30 Baltimore Sun. Austin Most people do not understand how the government’s oil import quota system works. When they are told, they blink with disbelief. The federal bureaucrats give out these quotas to specific oil companies that refine oil. Since, in ordinary times, imported oil costs much less, landed in the U.S., than the going price for it here, these quotas are in effect like money. The companies can sell their quotas for money, and many of them do it. The system is so ripe for corruption, some people have wondered in public why none has yet come out. President Nixon has recently had it 18 The Texas Observer MARTIN ELFANT Sun Life of Canada 1001 Century Building Houston, Texas CA 4-0686 announced that he will not replace this system with an oil tariff program. The government will continue giving these valuable quotas to private oil companies. Indeed, Nixon has received a recommendation from his Oil Policy Committee that the government should abandon a certain flimsy fiction and formally authorize the sale of the quotas for money. The money raised by a tariff on oil would pour into the Treasury in Washington and reduce the need for taxes on the citizens. There are no government gifts with money value in a tariff system. There is no open invitation to corruption. The government can limit oil imports just as well with a tariff system as with the quota system. IT HAS BEEN argued or implied by people who should know better that a tariff system would mean lower oil and gasoline prices for American consumers. That consequence would depend on the level of total oil importa under either system. You could as easily let in more or less foreign oil under a tariff system as you could under the quota system. The difference is that the tariff system puts money in the taxpayers’ till, while the quota system puts money in the oil companies’ till. Tariffs would be leVied impartially on crude oil as a commodity. Quotas assigned to specific companies are inherently matters of selection and, in a political system corroded by the need for huge campaign contributions, favoritism. The result of any system of rules administering the oil quota system has to be the giving of oil import “quota tickets” with negotiable money value to named, specific, privately-owned companies. Obviously the companies that get no or low quotas are going to regard the government’s rules as pancake make-up, and they are right to do so. Political kitties are not delivered by storks, either. These days, however, we should muster all the good cheer we can, and there is one educational value in the Nixon Administration’s decision to retain the oil import quota system. The ritual of government advisory commissions is exposed as the fakery that everyone on the inside in Washington knows it is. In 1969 President Nixon first appointed the Cabinet Task Force on Oil Import Control. He could hardly have brought together around one glossy-topped government conference table a more prepossessing group of federal officials. The members of the task force iT ,iluded his Secretaries of State, Tr, try, Defense, Interior, Commerce, and Labor and his Director of the Office of Emergency Preparedness. They, surely, would conduct a full review of the quota system for the President, himself. Surely, the bushy-tailed student in a freshman government class would assume, what they say will go, at least with the President. Se 4 Campu4 Rep 3or THE OBSERVER Jell JubcriptionJ, Jell Jingle aria, of each LoJue, Jtock local book Attora and New44tane4, inA4tall and Jervice coin .operated 4treet corner newpacks. ,liberal to radical commieJionJI no ineetttment required: the experience you gain 14 guaranteed not to prepare you \(or a career in of the Jelling actieitied interat you the moJt. THE TEXAS OBSERVER 504 W. 24 AUSTIN 78705