August 26, 1970
Page 30103
SHORTAGE OF OIL IN NEW ENGLAND
Mr. MUSKIE. Mr. President, summer is drawing to a close, and the fall and winter seasons will soon be upon us.
The colder weather coming in New England requires the heating of homes, of institutions, of schools, and of businesses, and it will put new strains on the shortage of oil which exists at this time.
The burden of the shortage will be, as always, on the back of the consumer. The homeowner who has to heat his home, the small businessman who has to heat his store, the school district which must have warmth for the children, the hospital which must keep patients comfortable during the fall and winter months, will suffer.
The Concord Monitor, of Concord, N.H., published an excellent editorial in a recent issue which pointed up the critical nature of this fuel shortage in most pointed terms. I was glad to note this editorial's comments about the efforts of the distinguished Senator from New Hampshire (Mr. MCINTYRE) to do something about this shortage. All of those from New England are working hard to see that we have adequate fuel oil at a price which compares with that paid by the rest of the country.
Mr. President, I ask unanimous consent that the editorial be printed in the RECORD.
There being no objection, the editorial was ordered to be printed in the RECORD, as follows:
[From the Concord Monitor, Aug 3, 1970]
NEW ENGLAND'S OIL SHORTAGE WOES.
New England is on the brink of a critical shortage of fuel oil. After a record-breaking heat wave, the consequences of this short supply are not readily apparent. But if present conditions continue, it will spill over into winter.
The category currently causing consternation is number 6, or residual, fuel oil. It is used in large manufacturing plants, institutions and most importantly in power generating furnaces.
The oil shortage problem is four-fold: (1) The demand for oil is nearly double the expected increase. Officials had planned a two and a half per cent increase; it is closer to five per cent.
(2) Restrictions on the sulfur content of oil have resulted in lower supplies of conforming fuel, since major refineries have not completed construction of sulfur-removing facilities.
(3) The war between the Arab nations and the Israelis in the Middle East has closed the Suez Canal and limited the supply from that major oil-producing area. In addition, the long trek around the southern tip of Africa has boosted the per-barrel price of Middle East oil by 75 cents.
(4) An acute shortage of tankers, mostly of foreign ownership, touched off by the diversion to the demands of the Middle East fighting.
The then-chairman of the New Hampshire Public Utilities Commission said a month ago he had been assured by the Public Service Company of New Hampshire there was no prospect of a power shortage in the state for the next three years.
But Atty. Francis J. Riordan said this was "barring unexpected contingencies." Since then, the critical nature of the supply problem has deepened.
A crisis has hit New York, where power supplies have been reduced a total of eight percent after a Consolidated Edison Co. generator failed. New England power has been diverted to New York to help take up the slack.
New Hampshire's Sen. Thomas J. McIntyre, a tiger on the backs of the major oil companies, called today for a phasing out of the oil import quota system, which clobbers New England, and replacing it with a tariff system.
The McIntyre proposal would implement the recommendations of President Nixon's Cabinet- level Task Force on Oil Imports, which the President has not yet put into force.
McIntyre charged that the oil import quota was costing U.S. consumers about $5 billion a year.
The oil shortage, which applies to home heating fuel as well as residual, is making the market ripe for oil price increases. And because oil is so widely used in power-generating plants, this could lead, in turn, to increases in the consumer price of electricity.
Apparently Concord is in no immediate danger of a power shortage. Most electricity serving the city is generated by coal from the Bow plant of Public Service Co.
And while the U.S. Office of Emergency Preparedness says coal reserves are down a bit, the supply locally is considered adequate at least through the coming winter.
What is more ominous, however, is that coal is under increasing assault as a source of air pollution. With growing emphasis on environmental quality cleanup, legislative pressure may be applied to replace coal with sulfur-free (2 percent or less) oil for generating purposes.
This is not only would be a costly undertaking, it would require a temporary shutdown of the Bow facilities.
The oil supply problem – not only in New England, but worldwide – is under intense scrutiny by public as well as private sources.
How the major oil companies handle it will determine whether they are re-oriented to the interests of the public, or will capitalize on a growing crisis for private gain.