The MacNeil/Lehrer Report; Gas Shortage

GAS STATION OWNER: You tell that goddam Governor he`s gotta police this goddam gasoline situation. I will not take the blame for this thing, I will not take the crap and the harassment from these customers! Now, let him police it or stop selling gas!

ROBERT MacNEIL: Anger and bewilderment are growing as more and more Americans cope with gasoline lines and empty pumps.

Good evening. For millions of Americans this may be the worst weekend they`ve ever faced for finding gasoline to give them the automobile freedom they take as their due. Gasoline shortages are spreading across the country; odd-even service, gasoline lines and closed gas stations are becoming increasingly common. And the news from overseas tonight gives no promise of quick relief. President Carter and other Western leaders agreed in Tokyo to limit oil imports to try to reduce dependence on OPEC, the Organization of Petroleum Exporting Countries. In Geneva yesterday OPEC slapped another large increase on crude oil prices, an increase the Tokyo summit leaders deplored. In response, President Carter pledged the United States to limit oil imports to eight and a half million barrels a day until 1985. So far this year imports have been running at 8.2 million barrels a day.

So with little hope of greatly increased supplies, and much higher prices for what supplies there are, pressure is building again in Washington for a new look at gas rationing. There are reports that President Carter will urge Congress to reconsider the rationing plan they rejected this spring. Tonight: is gas rationing the answer?

But first, for those of you who`ve been spared the experience so far, we want to share the emotions Americans are feeling on the gas lines. Late last week independent producer Phil Garvin spent the day on a line at a service station in Queens, New York, and this is what happened. As has become common in many states in the East, cars have been lining up before dawn. By the time the pumps opened, many had been waiting two and three hours for gas.

FIRST CUSTOMER: I`ve been here since four-thirty this morning. It`s ridiculous waiting on line here. I couldn`t get gas Tuesday; the line was about eight blocks long.

It was ridiculous. It was unbelievable waiting on line. I can`t take it any more. I`ve been carpooling, it`s my turn to, get gas, and ... thank God I`m able to get gas today. I don`t care how much it costs, I just gotta get gas, I gotta get to work.

GAS STATION OWNER: People are very desperate, they depend an awful lot upon their cars, and there seems to be no limit to how far they`ll go to keep driving their car.

SECOND CUSTOMER: I thought my husband would be able to get gas; he came here at twenty after five, and he called me at six that I should come out and take over `cause he`s gotta go to work. And that`s what I did. And I`m here -- the car is here since twenty after five. I just can`t believe it.

PHIL GARVIN, Producer: Where`s your husband?

SECOND CUSTOMER: He`s in the synagogue, praying -- for me.

THIRD CUSTOMER: I`m here since five in the morning, I spend every day three hours in the line; I am always nervous about gas, I can`t concentrate on my work. I always have to look at my gas gauge and find out where I can get gas. I went out this morning, we had a lot of work on the radio, people that called for cabs. I couldn`t answer the calls, my tank is almost empty. Financially absolutely back to a point where it`s just impossible to make a living.

GAS STATION ATTENDANT: My patience is wearing very thin because everybody comes in, all they want to talk about is gasoline. When are you getting a delivery, when can I get the gasoline, can I leave the car overnight.

FOURTH CUSTOMER: My daughter wanted to come here, she found out there`s a gas station open on Main Street, pumping gas at four o`clock. So she got on line, she was number thirty-three on line. And he was all a hoax. Some guy got in trouble with a car and he pushed it over to the gas station and people thought that there`s a line waiting for gas. And it was nothing. So they waited three hours and there was no gas. Then I had to come over there and help him push the car away.

Life is dull because simply you can`t go where you want to go. If I want to go to the show downtown, I can`t afford it now with the gasoline. It`s not a matter of spending money, it`s a matter of not getting what you want.

GAS STATION OWNER: We are only receiving eighty percent of last year`s allocation. We have to limit it to 1,500 per day in order to get through the month. After two hours of pumping, that 1,500 gallons is gone. At that time there is no sense keeping the pumps open because there`s nothing left to sell.

FIFTH CUSTOMER: It wasn`t this bad in World War II when you had to have a stamp to get gas.

GARVIN: Why wasn`t it as bad as this?

FIFTH CUSTOMER: Well, you could get it. You had a ration stamp, you could get the gas.

GAS STATION OWNER: We`re slowing down, we`re just about ready to run out of high test gas. The line is very long but the most we can go maybe is another twenty, thirty minutes. We have a truck in the back of the line now, but I don`t know if it`ll be in in enough time to get all these people served with gasoline.

GARVIN: Isn`t somebody going to be pretty mad? What would you think if you were in the back of the line and you couldn`t get gas after you`d waited on line?

FIFTH CUSTOMER: I`d be unhappy; but there ain`t he can do about it. If he ain`t got gas in the tank, he can`t pump it.

SIXTH CUSTOMER: I came in, I figured maybe I`d get gas. I`m very low. But I got an even number, he wouldn`t give me any gas.

GARVIN: Are you a regular customer?

SIXTH CUSTOMER: Sure I am! He says come back tomorrow when there`s even numbers. Okay...I got just enough, if I -- if I just about make it till tomorrow.

I got a little less than half a tank and I gotta go out to Glendale, Brooklyn, New York; and this is business, this is not pleasure. But, I`ll manage; guaranteed.

GAS STATION ATTENDANT: We`re all out of high test and regular gas. That`s it. The lines are completely around the corner, so we won`t have enough gas to - forget it; we`ll have to cut the line short.

SEVENTH CUSTOMER: Now, after waiting two hours, I`m not sure if I can make it.

GARVIN: Make it where?

SEVENTH CUSTOMER: Well, if there`s any gas left. That`s what I`m waiting for. I heard that they had some no-lead left, and that`s -- you got some no-lead left? (Laughs.)

EIGHTH CUSTOMER: It`s gonna be a hot summer. It`s gonna be rough. There`s gonna be a lot of trouble. These lines gotta shorten up, you know? It`s gonna be really rough.

GARVIN: You mad or something? What`s the matter?

EIGHTH CUSTOMER: Everybody. Can you imagine the guy who they`re gonna shortstop him and tell him there`s no gas? Oh, I can see a lot of static coming this summer.

GAS STATION OWNER: How do they expect the dealer to police this situation? For God`s sakes, if they want to enforce this rationing or whatever they want to do, can`t they supply some policemen or somebody to enforce this thing? It`s such a hardship as it is, on a dealer., to expect us to be a policeman and a judge and a rationer and God knows what else. How the heck do we all do all this work?

NINTH CUSTOMER: I don`t get regular gas, he gives me unleaded. I should be satisfied with that. Check my oil, see if it`s all right on the big trip

I`m going? I`m sorry, we don`t have time. That`s pretty good, isn`t it. (Starts car.) Should I be angry? I am.

TENTH CUSTOMER: People ought to just take their cars, put them in their garages, and let them sit there. Let the stations, the owners, the oil companies choke on their gas.

GARVIN: Well, you`re not doing that.

TENTH CUSTOMER: I`m not doing it because nobody else is. What am I going to do, sit home all by myself and... you know? If everybody do it that would be a great idea.

GAS STATION OWNER: Everyone is uptight; the customers are uptight, the dealers, the employees. It`s a difficult situation, and it`s getting worse, where they`re starting -- there are many arguments, people feel that there`s no credibility, that we`re lying to them, that we do have the gas but we`re not selling it, which is not true because if we had it we`d be only too glad to sell it. I`ve become short-tempered; my wife says I`m very grouchy; and it`s not a happy situation, to say the least.

ELEVENTH CUSTOMER: (Pulling up to pump.) All right?

GAS STATION ATTENDANT: You made it!

ELEVENTH CUSTOMER: You`re not kidding! (Laughs.) I`m apprehensive. (Laughs.) `Cause I don`t know if I`m gonna make it. After two hours! (Laughs.)

GAS STATION ATTENDANT: I know, but you made it, you made it.

ELEVENTH CUSTOMER: (Laughing.) I got to to pump, let`s see how much gas I get out of it. Never thought I`d live to the day when I`d have to start counting the gallons that are going into the tank.

GARVIN: You`re just a few cars away, aren`t you?

TWELFTH CUSTOMER: Yeah. I`m worried, I`m tired. I did this yesterday, too.

GARVIN: How long were you on line yesterday?

TWELFTH CUSTOMER: Yesterday? Not very long, about an hour and a half.

GARVIN: That`s not very long?

TWELFTH CUSTOMER: Today it`s over two and a half hours.

GAS STATION ATTENDANT: All out of gas! Tomorrow morning! All out!

GARVIN: You say that you didn`t hear him say it?

THIRTEENTH CUSTOMER: Yeah, I heard him say it, I don`t...

GARVIN: Don`t you believe him?

THIRTEENTH CUSTOMER: I don`t believe him. (Laughs.)

GAS STATION ATTENDANT: No more. Not a drop.

FOURTEENTH CUSTOMER: How about five dollars?

GAS STATION ATTENDANT: That`s it.

FIFTEENTH CUSTOMER: What is this, I`m in the line two hours and I can`t get gas? This is baloney! Carter doesn`t get my vote next year! You wait and see, as soon as it gets up to a dollar and a half a gallon you`ll see all the gas you want and there won`t be no more lines.

SIXTEENTH CUSTOMER: No more gas?

GAS STATION OWNER: Tomorrow morning! Get up at three in the morning....

SEVENTEENTH CUSTOMER: I`m waiting on line for over an hour and a half and to be the last one, to get no gas, I think it`s disgusting.

GAS STATION OWNER: You tell that goddam Governor he`s gotta police this goddam gasoline situation. I will not take the blame for this thing, I will not take the crap and the harassment from these customers! Now, let him police it or stop selling gas!

GAS STATION ATTENDANT: This lady -- talk to this lady, Ed.

GAS STATION OWNER: I`m not talking to anybody. You get the Governor down here, let him worry about how he`s gonna sell this gasoline. The dealers will not be subjected to this harassment.

EIGHTEENTH CUSTOMER: I know when we`ll get gas. This afternoon you`ll be able to charge for half the...

GAS STATION OWNER: Yeah? I`ll bet you there`s no gas, even at that price. What do you think of that? T`ll bet you there`s no gas.

EIGHTEENTH CUSTOMER: Well, I heard this morning...

GAS STATION OWNER: Well, you get the gas down here.

EIGHTEENTH CUSTOMER: ...the Commissioner of Energy from Washington, and they claim there`s gas.

NINETEENTH CUSTOMER: What about people who`ve gotta make a living, what about them? I have a problem, I can go on disability; I gotta wear two splints, braces. What does a person like myself do?

EIGHTEENTH CUSTOMER: To turn you down the - why didn`t they come out and tell us there was no gas? Three or four...

GAS STATION OWNER: We did tell you.

EIGHTEENTH CUSTOMER: No, they did not. You...

GAS STATION OWNER: I sent the man down the line. Eight o`clock, we closed the pump at eight o`clock, it`s a quarter to nine. What are you doing in line?

EIGHTEENTH CUSTOMER: Never told us...

GAS STATION OWNER: What are you doing in line at a quarter to nine?

EIGHTEENTH CUSTOMER: Never.

GAS STATION OWNER: We`re only supposed to pump till eight o`clock.

EIGHTEENTH CUSTOMER: I have to be at work at eight. I came here at six- thirty to get on line...

GAS STATION OWNER: Six-thirty!

EIGHTEENTH CUSTOMER: ...now it`s not fair.

GAS STATION OWNER: And you expect to get gas at six-thirty in line? Forget it, lady.

TWENTIETH CUSTOMER: You just shut down?

GAS STATION OWNER: No gas.

EIGHTEENTH CUSTOMER: I think that`s disgusting

TWENTIETH CUSTOMER: You know, you could come to the end of the line and let people know.

GAS STATION OWNER: Well, we did send the guy out that went down there and told everybody we had no gas, forget about it. And everybody stood, they don`t listen.

EIGHTEENTH CUSTOMER: No, they did not. They said you had regular and you had unleaded.

TWENTIETH CUSTOMER: He said you had regular and unleaded.

GAS STATION OWNER: You see that sign that we got out there? Six to eight, we`ll all be ...

EIGHTEENTH CUSTOMER: Why didn`t they come back and tell us?

TWENTIETH CUSTOMER: Yeah, but obviously if we`re on the line we don`t see the -- if you tell...

EIGHTEENTH CUSTOMER: You have a car there that says no gas.

TWENTIETH CUSTOMER: At this point no one objects to waiting on line, but we should be told before we spend an hour on the line that we`re not going to get gas.

GAS STATION OWNER: Well, I told him to go down there to tell you there`s no gas at all, so I don`t know what happened.

TWENTY-FIRST CUSTOMER: I have to get to work, I`m late as it is.I am very upset because I was here since six-thirty. I never expected to be - the last one on ... well, that`s the story of my life: (Laughs.) That`s where it ends. When it gets to me.

(Later.)

GAS STATION OWNER:I lost control of myself, at the time of the closing of the pump, with some people that have been with us for so many years, it`s really not fair to them; I understand their frustration. But at the same token, we`re under the same amount of frustration, and sometimes the safety valve lets go and you regret it five seconds after you`ve opened your mouth, and I would hope that something would happen to resolve the situation as soon as possible.

MacNEIL: That report was filmed by Phil Garvin in Queens, New York. A number of oil companies have announced that supplies for July also will be down from last year`s level. The Sun Company, better known to motorists as Sunoco, will be shipping stations ninety-two percent of the allotment they received this time last year. S.C. Bartlett is the Sun Company`s senior research engineer and, recently, spokesman. Mr. Bartlett, does the Tokyo limit that Mr. Carter has promised of importing only 8.5 million barrels a day mean permanent gas lines like those?

S.C. BARTLETT: Not if we learn to adjust ourselves to the conditions that it`s bringing about. If we exercise reasonable conservation, which is what the President, for example, has been calling for for quite some time and it`s one of his better moves...

MacNEIL: Does that mean drive less?

BARTLETT: That means drive less, that means drive better, that means obey the speed limits, that means no jackrabbit starts and all the other good things that can be done. If we do that kind of thing, we can survive this kind of a limitation on imports, but it should be coupled with a determined effort to develop as much alternative energy as we can possibly get our hands on between now and the time 1985, which I believe is the terminal date for this particular period the President`s talking about.

MacNEIL: How much of the present problem is due to the public panic buying and topping off their tanks?

BARTLETT: A considerable amount of it, I think, Mr. MacNeil. The estimates that we have is that there`s about twenty million barrels of gasoline riding around in automobiles in topped-off tanks. That would represent about ten percent of the total national inventory. There`s nothing wrong with that, but it does indeed cause a lot of --frequent stops at service stations or a lot of topping off does this, and it does contribute to the length of the lines and add to the frustration that that film so very beautifully illustrates.

MacNEIL: If people would allow their tanks to go down to half full or something like that, what would that do to the present situation?

BARTLETT: It would help some by taking some of those cars out of lines. Of course, in order to do that they have to have some confidence that the shortage is indeed real and that there will be an equitable ef fort to keep supplies moving as best we can.

MacNEIL: And they don`t have that confidence now.

BARTLETT: Apparently not.

MacNEIL: Is rationing the answer to this situation at the moment, government-enforced rationing?

BARTLETT: Rationing, in my judgment, Mr. MacNeil, will be an assistance-to the problem but not a solution to the problem. Rationing will work temporarily only under this conditions: it will work provided, one, people really believe that it is indeed necessary, as indeed it is. They have got to believe that there truly is a shortage. If they do so, and if there is some light at the end of the tunnel, if I may overwork that expression, in the sense that they know that a sizeable amount of effort is being made by everybody to bring additional materials available or to develop alternative sources.

MacNEIL: Speaking about everybody, the oil companies have been accused by the Department of Energy and others for not running their refineries at full capacity. Are you in Sunoco refining at full capacity?

BARTLETT: That term "full capacity" needs some careful definition. Nobody runs a refinery at full capacity. To ask somebody to run a refinery at full capacity all the time is like asking your local high school track star that runs the mile to do that event at the same pace the hundred yard-dash man does. He can do that for just one hundred yards. Refining capacity is an estimate as to what can be done in a refinery provided everything is working at once, everything is working at maximum pace and nothing has to be done to slow it down, and no, we`re not running at full capacity. Under the conditions of necessary plant maintenance and turnarounds, we`re doing the best we can.

MacNEIL: You are running at optimum capacity.

BARTLETT: Optimum capacity for the safety of the equipment and the well- being, long term, of the supply situation. Yes, indeed, we are and have been for some time, about four years.

MacNEIL: Are you short of crude oil?

BARTLETT: We are short of crude oil; that accounts for part of the problem but only part of the problem. We`re short of crude oil for two reasons: one, there actually is some shortages amounting to maybe about three percent in our refineries, particularly here in the Delaware Valley, that comes about because it`s just not there anymore. The OPEC countries, who are the source of more than half of our supplies, have cut off some of the taps, or at least squeezed them a little thin. Another responsibility for the shortage comes about from the fact that we have had to ship some o of our crude to other companies who are even shorter, even in more trouble than we are. And that`s a regulation designed to try to share the shortages, the combination of those two things plus the need to build up some inventories against future maintenance problems, the solution of which are going to require shutting down plants, has caused about an eight percent deficit under what we had last year, and it accounts for that ninety-two percent you very accurately read just a moment ago.

MacNEIL: There`s to me a logical gap: how can you be short of crude and refining at full capacity -- as full as is practicable for you?

BARTLETT: We are refining at full capacity and short of crude at the same time because, among other things, we are having to build up inventories on heating oil; we are having to make some of this material into heating oil and diesel oil in order to avoid an even more serious shortage in the imminent future. That sort of material is needed for the farmers to get their crops in, it`s needed for the people to harvest those crops, it`s needed by truckers to get the crops to market, and it`s needed by people to keep their houses warm next year, and we are even shorter on diesel and heating oil inventories than we are on gasoline inventories.

MacNEIL: Well, thank you. A persistent critic of the way both government and industry are handing the energy shortage is James Flug, director of Energy Action, a Washington-based consumer and lobbying organization. Mr. Flug, how do you explain the current shortage at the end of June?

JAMES FLUG: Well, we tried to analyze it as carefully and as objectively as we could. We looked at all the industry figures, at the government figures, and we found that the shortage was the result of deliberate acts by the oil industry going back over a year ago. We found that the industry, at a time when plenty of crude oil was available, operated well below their effective capacity -- not theoretical capacity, but their real capacity. As a result, last October first, which is the key point, at the beginning of the last heating season, our stocks of both gasoline and heating oil were the lowest that they`ve been for years, well below `75 in the case of gasoline, and below `76 in the case of fuel oil. In other words, they left us very vulnerable at the beginning of the last heating season.

MacNEIL: You said deliberately. Why, do you believe?

FLUG: Well, I believe that it`s because they know that the peak in gasoline usage is coming in 1981, this is well known in the industry, although the press hasn`t caught up with this. This is their last chance to raise the prices really high before usage of gasoline in the country begins going down in `81. And secondly, they wanted both to bring about and take advantage of the decontrolling of oil prices. Now, this was an issue which had to come up this year, they knew that, and they know that if you can get a tight supply situation it`s easier both to justify and divert attention from the prices. You heard on the film, somebody said, "I don`t care how much it costs." Well, when you`re on a line, you don`t care how much it costs, and the price now is a price that six months ago was unimaginable. But once you get into a shortage situation, then any price is imaginable...

MacNEIL: One man today in California said he was fed up and he was going to start charging five dollars a gallon.

FLUG: As the people on the film said, the American public is so attached to its automobiles that it is going to keep on buying gasoline no matter what the price, and that`s what`s wrong with the theory of rationing by price. The policy of our government now, as it has always been the policy of the industry, is to ration by price, to get the price up so high that theoretically people will stop buying gasoline.

MacNEIL: Do you believe the government should now introduce rationing by law or by presidential order?

FLUG: We have rationing. We have rationing by price, extremely unfair, extremely inefficient. We have rationing now by inconvenience, who`s willing to get up earliest and wait on the longest lines. Those are terribly inefficient, terribly unfair ways of rationing. If we really had a shortage and if it were really necessary to have a shortage, and if there were really nothing you could do about the shortage, then some kind of sensible, well-operated rationing system would be better than rationing by price or rationing by inconvenience.

MacNEIL: You maintain we really do not have a shortage -- right now?

FLUG: We don`t have a shortage that had to be; in other words, the current shortage is the result not only of the failure to operate the refineries at full capacity both last year and the early part of this year, but also a panic on the part of the government. James Schlesinger, the Secretary of Energy, panicked early this year when Iran went down. The European economics ministers were saying, "Be calm, we`re going to do all right." In fact, the supply of oil in the world kept up because other countries made up for the Iranian shortfall. But James Schlesinger panicked. And when he started saying this is worse than `73 and `74, he caused people to buy a lot of oil if they didn`t have it, he caused the companies to hold back on oil if they had it, and that caused the shortage. Yes, right now we`re in a situation where there is less gasoline in the stations than people would like to buy, so we have a real situation now, but it`s the result of acts that didn`t have to be. The shortage is really unnecessary, unjustified, unfair, and I`m afraid we`re not going to be able to do much about it because we have a vacuum in the leadership right now. There is no Department of Energy right now.

MacNEIL: Mr. Bartlett, what do you say to Mr. Flug`s charge that this shortage was created by deliberate acts of the oil industry last fall holding back on refining?

BARTLETT: Both on behalf of my company and my industry, of which I am proud, both of which I am proud, I deny that absolutely and totally. What Mr. Flug didn`t tell you should include the following things: as of the last fourteen months prior to the first of May of this year, fourteen consecutive months, we consumed in this country more gasoline every single week than we had ever consumed in all-time previous highs. By the fall of last year, when he`s talking about the beginning of the decline of crude supplies, by the fall of last year companies, in order to meet this greatly enhanced demand, began to produce in this country at a level higher than any corresponding week, and they kept that up all the way into spring of this year. In order to do that it was necessary to draw down on gasoline inventories; it was necessary to make less fuel oil; it was necessary to eat into those well-piled inventories of crude, and when the time came to eat into those well-piled inventories of crude all of a sudden there appeared some additional strains-- the Iranian shortfall, which didn`t cause it, it just triggered it; and a reluctance on the part of the some of the other OPEC countries to build up the difference. The combination of all of these things was the real source of the problem, and the main source of the problem has been, as he truly put, the insatiable appetite that we`ve had for gasoline in this country. The charge that we built it up or contrived it is totally refutable. My company began to communicate as early as last fall with government officials, saying that we`re going to have lots and lots of trouble and we think if you`ll investigate other companies you`ll find they`re going to have trouble, too, and together we ought to solve this. Unfortunately, what happened was that everybody else, including many of ourselves, have spent out time pointing the finger of blame at various and sundry people instead of trying to work on the problem as we should.

MacNEIL: Gentlemen, we`re not going to solve this argument, which has gone on for weeks and probably will continue. We`ve heard your charge and your reply to it. I`d like to ask in the couple of minutes remaining what is the picture for this weekend in the gas supplies in the country; from a consumer organization`s point of view, what do you think it`s going to be?

PLUG: I waited on a gas line before six o`clock the other morning myself because I had hoped to get my family out of the city for a few days, and I`m sure other people decided not to wait on the gas line. If enough people don`t do the traveling that they were going to do in the coming week, there might be enough gasoline to last till the end of the month, but it`s going to be an extremely tight situation and I don`t see any quick changes.

MacNEIL: Can you give us a feel what it`s going to be like this weekend and into July, looking at the country as a whole?

BARTLETT: Yes. For the first and only time, I think I agree with what the gentleman just said. If we are reasonably calm, I think that we can get through this weekend with enough gasoline to keep necessary motion going and to keep out of the troubles.

MacNEIL: What does being calm mean if you want to take your family out of town for the weekend?

BARTLETT: Being calm means if you want to take your family out of town for the weekend you`d better plan on taking that trip about twenty miles away instead of 200 miles away, and you`d better plan on combining as many trips as possible and not taking a five-mile trip every time you need some particular item. You`d better combine these things so that one ten-mile trip will cover as much as you can possibly have. If we do that, we`re going to get through this situation. That will help us very considerably indeed. If we don`t, we`ll be panicky all the rest of next month. I`ve seen some evidence that steps like odd-even handling of gasoline are indeed working. The lines have been cutting to less than half down in the Delaware Valley just as of the last couple of days. There`s some indication that the public will indeed respond, and I`m beginning to be hopeful that we can get through it with reasonable calm.

FLUG: We need some response from the oil industry, too, Robin. This morning`s headlines showed that crude oil production in this country is down; the refineries are still not operating at capacity, and we need them to produce and make more gasoline.

MacNEIL: Mr. Flug, we have to end it there and wish the unhappy drivers of this country a happy weekend. Thank you both very much for joining us. That`s all for tonight. We`ll be back on Monday night. I`m Robert MacNeil. Good night.