SHORTAGES: A Time of Learning to Live with Less

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Whatever happens in the Middle East, Exxon, the world's biggest oil company, has little to fear. It has extensive petroleum holdings in Venezuela, Australia and Canada. Exxon rigs are also exploring for oil in the North Sea, off the coasts of Malaysia and Newfoundland and in West Virginia. Exxon owns significant coal reserves in Illinois, Wyoming, Montana and North Dakota, and it mines and processes uranium for nuclear power plants.

Though Standard of California, Texaco and Mobil also have access to oil outside the Arab world, they are not nearly as widely dispersed as Exxon and will suffer some loss of profits from the cutbacks, embargoes and forced government buy-ins in the Middle East. Of all the Seven Sisters, Gulf is in the most trouble. Two-thirds of its production comes from Kuwait, where pressure is building for a state takeover of foreign operations. Best off are the American domestic companies: Phillips Petroleum, Atlantic Richfield, Standard of Ohio, Marathon Oil. Since they have few holdings in the Middle East, their property is not vulnerable to government seizures, yet the value of their reserves has suddenly grown immensely.

More Drilling. The price of non-Arab oil is already booming, and will soon propel American fuel costs even higher. Texas-based Coastal States Gas Corp. has agreed to buy crude oil from Nigeria's state-owned petroleum company for $16.80 per bbl.—about two or three times the uncontrolled price of "new oil" produced in the U.S. Oilmen are rushing to find new deposits. Explorations have begun in Montana, and American companies are pressing a promising search in the jungles of the upper Amazon where the borders of Colombia, Ecuador and Peru meet.

The most viable energy source for the immediate future is coal, which constitutes 90% of known U.S. energy reserves but is used for only one-fifth of the nation's energy. Coal production has fallen off, in part because of clean air standards, and it will be difficult to expand rapidly. One reason: new and reopened mines must be brought up to the standards of the 1969 Coal Mine Health and Safety Act, an expensive process.

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