79-08-A2
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Oil[edit]
Transcript[edit]During the Arab oil boycott in 1973-74 the lines at the oil stations were long and tempers were short. We've had a rerun of that situation here in California and maybe before the summer is over it will happen in other states as well. Summer is a time of heavy driving, but it's also a time when refineries are building up a reservoir of heating oil for the winter that follows. At the moment they are behind schedule in that department. If rumors were crude oil, we'd have no problems. Everyone seems to be looking for someone to blame. But where to begin. Well, there is the federal allocation system. The Arabs and Iran have all reduced the amount of oil they are pumping so our government has reduced each state's allotment to a percentage of what they were getting last year. In doing that they overlooked something. Some states have fewer people and hence fewer cars than they had last year. And some states, like California for instance, have hundreds of thousands of new citizens and tens of thousands of additional automobiles. That's why business seems normal in other states while motorists spend four hours in line out here waiting to buy gas. Then there is a refinery shortage due to environmental regulations. There is the case reported by UPI a short time back; Jack Evans applied for permission to build a refinery in Portsmouth, Virginia in 1969. It is now 1979 -- 10 years and seven million dollars later. The money went for environmental impact statements and legal fees. He still doesn't have permission to build the refinery. Then there is the increasing demand for unleaded gas as more and more cars are equipped with smog control devices -- federally mandated. It takes more oil to produce unleaded gas. And the unleaded gas doesn't give as many miles per gallon. And incidentally, unleaded refinery capacity has not been allowed to grow to meet demand. Ask Jack Evans. It's easy to look at the big oil companies and blame them, but can we be sure we'd have the right target? I know their profit picture has been improving; still when you buy a gallon of gas the federal government gets 10 times as much from your dollar as does the oil company and the OPEC countries get 17 times as much. Now the environmental Protection Agency has dreamed up some new regulations. They will take a lot of oil industry money that might better be spent exploring for new oil. Drilling mud, oil production brines and crude oil residue are to be classified by E.P.A. as "hazardous waste". Total cost of that decision would come to about $6 billion more than our entire bill for imported oil -- somewhere around $45 billion a year. One thing does seem very clear -- if we could produce more domestic oil and thus reduce our dependency on Arab oil we might find that Arab oil suddenly had a lower price. We'd also find the lines (of cars) had disappeared from around our gas stations. This is Ronald Reagan. Thanks for listening. |
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