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The Administration has drawn up a sweeping, though highly tentative emergency proposal. It would give the President broad powers to put taxes on fuels, temporarily override certain environmental standards, demand that some utilities switch from oil to coal, and curtail the business hours of stores and shopping centers. The White House is also considering asking Congress for authority to set maximum temperatures in office buildings and order mandatory cutbacks in oil for such "nonessential" users as theaters, restaurants and bowling alleys. In addition, the Administration is debating whether to ask for power to declare permanent daylight saving time to reduce electricity demand. These far-reaching proposals are still in the preliminary stage and it is unlikely that the Administration will ask for them all at once. In the end, the most effective deterrent to energy waste may be the soaring costs of oil and electricity.
The situation is potentially more explosive in Europe, which gets 73% of its crude from the Arabs. The Netherlands, a target of Arab oil embargoes because of its support of Israel, is already in deep trouble. Unless the Arabs modify their stand, tanker traffic into Rotterdam, the world's largest oil port, will be slashed 70% by the end of this month. The ban will also be felt throughout the Common Market and even in the U.S. Fully 75% of the 1 billion bbl. of petroleum annually unloaded in Rotterdam is re-exported; some 20 million bbl. of oil products go to the U.S. from The Netherlands.
Fellow Europeans, reluctant to antagonize the sheiks, were certainly not rushing to aid the Dutch. In fact, France, which has stayed on the right side of the Arabs and is getting oil at a normal rate, would like nothing better than to woo away some of the Rotterdam tanker traffic to Le Havre.
In Britain, Prime Minister Edward Heath is holding off on distributing fuel-ration books, gambling that his country's courtship of the Arabs will make such a move unnecessary. Gasoline and heating-oil prices are expected to rise in Germany, but no rationing is anticipated. Anxious Austrians are hoarding so much that Trade Minister Josef Staribacher laments: "All we can do now is wait until every bathtub in the country is filled with oil or gasoline."
The Arabs show no sign of relaxing the threat to slow the flow of their oil by at least 5% a month. Last week rumors floated that Saudi Arabia, which initially reduced production by 10%, was cutting output by another 5% on top of that. Together with the earlier reductions and total embargoes on the U.S. and The Netherlands, Middle East oil production has declined by a sizable 20% in one month.
Before the Arabs resorted to their drip, drip, drip strategy, major U.S. oil companies were doing a rich business. For the third quarter, Exxon's net profits climbed by a spectacular 80%, to $638 million; Gulf Oil's rose 91%, to $210 million; and Mobil's 64%, to $231 million. These earnings are likely to recede slightly in the future, but many oil analysts agree that rising fuel prices will continue to pump fat profits into petroleum firms. This, could be good news for consumers. With their coffers bulging, the oil giants can hardly plead poverty as an excuse for not increasing exploration for new energy sources that would be immune to Arab blackmail.