OIL: Many Fiddle But Nothing Burns

The time is short. Soon will come the first need for heat in homes along the Atlantic Seaboard. But last week, barely 30 days before a decision on fuel oil rationing must be made, the true picture of this winter’s oil shortage was still buried. Into the ground probed New York City’s Mayor LaGuardia, and the governors of six New England States.

Bleated LaGuardia, answering the Chicago Daily News which asked if Midwest rationing could really help: “Present stocks and current supplies [of petroleum] are short of essential needs by 25,000,000 barrels. The Midwest can help.” Panicked at the nearness of the first frosts, Petroleum Coordinator Ickes halted some 5,000 tank cars still carrying gasoline to 20 Midwest and Southwest States, ordered them into eastern service.

The Providence, R.I. Journal ran advertisements in five key-city Midwest newspapers, sent reprints to some 500 editors of other papers. The purpose: explain the East’s plight, poll Midwest sentiment on rationing of gasoline and fuel oils. Responding by the hundreds, Midwesterners affirmed they were willing to accept rationing—when the reason for it is understood.

The doubt in Midwestern minds all along has been the problem of transportation to the oil-short East. But additional transportation between Midwest and the seaboard is available if the oil can be had at Midwest terminals. Some examples:

> Great Lakes tankers have hauled oil west from pipeline heads at Toledo instead of to Buffalo for connection with Erie Canal barges. Fully utilized, the capacity of the Canal could be stepped up to 150,000 barrels daily from its present 50,000-barrel trickle. At this rate, from last May to the close of navigation this winter the East would have gained 20-odd million barrels.

> The Buffalo-to-Philadelphia Keystone Pipe Line has lain idle since spring for lack of oil at the lakehead. Lost to the East is the line’s minimum 16,000-barrel daily capacity.

> Many tank cars now highballing the long 2,000-mile run from Texas to New England could be loaded with the same oil pumped from Texas to the Midwest through pipelines. The shorter haul would cut car mileage by half, turn-around time by at least 25%; thus help the railroads step up their deliveries from last week’s 837,000 barrels daily to better than a million.

But Midwest stocks, even if made available, are blocked to the East by price hurdles as OPA, ODT, OPC, and WPB play their separate games for political control. It costs at least one cent more per gallon to bring oil east via the Great Lakes than it does to haul it by rail from Texas. Another difficulty is that gasoline still is more profitable to sell than fuel oils. Higher fuel oil profits in the East, smaller gasoline profits in the entire country might perform strange wonders.

The hard cold arithmetic of the East’s petroleum requirements this year are Washington secrets. But the unrationed East last year consumed 1.7 million barrels daily in the last quarter, of which 232,000 bbls. was heating oil, 632,000 bbls. gasoline, 463,000 bbls. heavy industrial oils. In the first quarter of 1942, the total was about the same but 356,000 bbls. was heating oil, 556,000 bbls. gasoline, 534,000 bbls. heavy industrial oils. If gasoline rationing is worth the coupons that regulate it, demand for gasoline should be 50% less. Thus this winter the East’s needs will be about 1.4 million bbls. daily. The East can still hope to hit this mark if the oil problem is headed by one capable authority, backed by a molecule of political honesty. Any unscheduled deliveries by deep-sea tankers would be a windfall.