Inside the Big Oil Game

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oil and gas that can be extracted from coal, and the petroleum that lies trapped in shale rock. Fifteen percent or so would be spent on aid to low-income families that would suffer from rising fuel prices. The remaining 5% would go for further development of the nation's mass-transit system.

Carter's tax approach will help ensure that many kinds of companies, small as well as large, and industries besides oil will get a chance to test daring ideas. Oil companies should not be encouraged to try to dominate, or monopolize, whole new alternative-energy industries that come into being to compete with petroleum. In such esoteric fields as the direct conversion of sunlight into electricity and the extraction of gas from sea water and oil from coal, companies in other industries—electronics, mining, shipbuilding—have as much expertise as the oil industry and, in some cases, more.

Since Congress increasingly favors some sort of excess profits tax on the industry, a number of companies are coming around to a grudging acceptance of the idea, just as long as the levy would contain a so-called plowback provision that would permit them to reduce windfall taxes by investing the money in exploration. Congress could well go along with a plowback. Though Carter has attacked the scheme as a loophole "that you can sail an oil tanker through," he may find that without a plowback he will have real trouble getting a tax at all.

People may not like it, but the U.S. badly needs the Sisters, the big independents and the wildcatters. The world requires more oil, and surely nobody knows how to find the crude better than oilmen do. Energy Secretary Schlesinger, who came into office both suspicious and wary of the industry, has since grown to appreciate the difficulties of the business. Says he: "The companies do a reasonably good job, far better than people are willing to recognize." In dealing with the OPEC countries, he continues, "the only alternative would be a Government purchasing monopoly, and the overall performance of federal procurement does not make a case that the Government would do any better than the companies, and it is not likely to be as good."

Snapping and snarling at the industry benefit nobody—except the OPEC producers, who exploit the divisions within importing nations. Only when those countries conserve more, produce more and reduce their umbilical dependence on the cartel, can they beat the Oil Game.

* Exxon, Gulf, Mobil, Royal Dutch/Shell, Texaco, British Petroleum, Standard Oil of California.