ustxtxb_obs_1980_01_18_50_00002-00000_000.pdf

‘ARV, BLISHER, RONNIE DUGGER ‘..The Texas Observer Publishing Co., 198.0 , January 18, 1980 licorporaiing the State Observer and the East Texas Democrat, ich in. turn incorporated the Austin Forum-Advocate. ANAGING EDITOR Linda Rocavvich ASSOCIATE EDITOR Eric Hartman ODUCTION MANAGER Beth Epstein SISTANT EDITOR: Bob Sindermann Jr. Fr ASSISTANTS: Lorraine Atherton, Jeannette Garrett, Dave ow, Donna Ng, Anne Norman, Martha Owen, Karen White, Harris Co .’VIUTORS: Thomas D. Bleich, Ave Bonar, Berke Breathed, Warren Burnett, Bob Clare, Jo Clifton, Bruce Cory, Keith Dannemiller, Jeff Danziger, Chandler Davidson, John Henry Faulk, David Guarino, Roy Harnric, Doug Harlan, Dan Heard, Jack Hopper, Dan Huhig, Molly Ivins, Suian Lee, Tim Mahoney, Maury Maverick Jr., Kaye Northcott, Hansl’eter Otto, Alan Pogue, Lois Ranldn, Ray Reece, Susan Reid, Laura Richardson, Andrew Saldana, Ben Sargent, John Spragens Jr., Sheila R. Taylor, Vicki Vaughan, Lawrence Walsh, Eje Wray, Ralph Yarborough A journal of free voices We will serve no group or party but will hew hard to the truth as we find it. and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of humankind as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. The editor has exclusive control over the editorial policies and contents of the Observer. None of the other people who are associated with the enterprise shares this responsibility with him. Writers are responsible for their own work, but not for anything they have not themselves written, and in publishing them the editor does not necessarily imply that he agrees with them because this is a journal of free voices. BUSINESS MANAGER Cliff Olofson The Texas Observer Editorial and Business Office 600 West 7th Street, Austin, Texas 78701 Publisher’s Office P.0, Box 6570, San Antonio, Texas 78209 Published by Texas Observer Publishing Co.. biweekly except for a three-week inter: val between issues twice a year, in January and. July; 25 issues per year. Second-class postage paid at Austin. Texas. 750 prepaid. One year. $15: two years. $28: three years. $40. Airmail, foreigh group. and bulk rates on request. Microfilmed by MCA, 1620 Hawkins Avenue, Box 10. Sanford, N.C. 27330. POSTMASTER: Send form 3579 to: 600 West 7th Street, Austin, Texas 78701. Cover Art: Beth Epstein The fight in Congress over the so-called windfall profits bill that the main issue was settled before the debates began. When President Carter’ unilaterally decided in April to lift price controls on domestic crude oil, in effect he chose the major oil companies as the instrument of U.S. government policy for the accumulation of capital needed to finance future energy invest.merit in this country. The President estimates that decontrol will add a trillion consumer dollars to oil company revenues; most of the $227 billion to be captured by the compromise windfall tax bill will go back to the same companies in the form of subsidies for the development of alternative fuels. Pro-consumer forces in the House probably had the votes last spring to block decontrol of oil prices just as they did in earlier sessions under Republican presidents. It was a Democratic president’s embrace of Republican economic doctrine that made the difference, according to Edwin Rothschild, director of Energy Action, a consumer lobbying organization. Carter’s “Republican predecessors didn’t have the levers of power” over Congress’s Democratic majority, Rothschild says. By using his power of appointment and his power to help or hurt a Democratic congressman’s district, President Carter did what Republicans in the White House couldn’t do and what candidate Carter said he wouldn’t dohe persuaded Congress to let the price of energy produced in the United States rise to the level fixed by the OPEC cartel, a price level that bears no relation to costs of domestic production. Even with the windfall tax, says Edwin Rothschild, the oil companies will be able to keep most of the increased price up to $30 a barrel, while industry data show that domestic production costs, by the most generous estimate, are less than $4 a barrel for oil already discovered and no more than $8 or $9 a barrel for newly-discovered oil. “Linking our energy price to OPEC’s is absurd,” says Rothschild. “We produce about 75 percent of our own energy . .. to say that we should give them that much power [to set our price] says to OPEC, ‘We think what you’re doing -is wonderful.’ ” The President argues, whether naively or insincerely, that the giant energy conglomeyates will free us from dependence on OPEC and eventually from dependence on any oil. A spate of government reports on oil supplies and prices over the past year strongly suggests the process will not be benign, if it occurs at all. A Treasury Department study last spring documented the claim that the 1979 gasoline shortages, attributed by Carter and the industry to Iran’s production cutback, actually stemmed from industry maneuvering before the Iranian action and persisted even though U.S. oil imports were ample, indeed increasing, during the first part of the year. The Department of Energy and the White House thought the study “could be confusing to the public and Congress” and tried to suppress it, according to internal administration memorandums published this month by a House government operations subcommittee.