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Industrial and Business Sources Challenge View That Energy Crisis Due to Arab-israel Dispute

American industrial and business sources have begun to challenge the view being propagated by some U.S. oil companies that the country faces a serious energy crisis because of the Arab-Israeli dispute. The claims by the Standard Oil Co. of California that the oil producing Arab countries will curtail production or embargo sales to the U.S. because of America’s pro-Israel policies in the Middle East were vigorously refuted in an editorial in the Wall Street Journal yesterday.

In recent public statements, John K. McKinley, president of Texaco Inc. attributed the oil shortage in large measure to technological lags rather than politics; and Charles F. Luce, chairman of the board of the Consolidated Edison Co., stressed that America has more than ample alternative sources of energy and need not let its fuel requirements become hostage to Middle East politics.

The linkage of possible oil shortages to Arab bitterness over U.S. support for Israel was made in a recent letter by Otto N. Miller, chairman of the board of SOCAL to its 40,000 employes and 200,000 stock holders urging the U.S. to show far greater understanding of Arab aspirations. The Mobil Oil Co. stated a similar point of view in an advertisement published in the New York Times.

FIGLEAF FOR ECONOMIC OBJECTIVES

The Wall Street Journal declared yesterday, however, that there was little substance to those arguments. “Rhetoric about Israel in fact often seems to be a ‘figleaf,’ as one Middle Eastern bureaucrat puts it, for more pressing economic objectives,” the Journal said. The editorial noted that Saudi Arabia’s reluctance to increase oil production stems from the problem of absorbing oil revenues in its near feudal economy. It pointed out that Libya “recently put production limits on Standard Oil of California despite California Standard’s pro-Arab lobbying, suggesting that the real targets of the campaign are the oil companies that have not yet agreed to Libya’s economic demands.”

The editorial continued: “As an immediate source of an oil crisis, the Arab-Israeli conflict ranks somewhere below Kurdish nationalism, the Iraq-Kuwait confrontation…the Iraq-Iranian dispute over the Shatt al Arab waterway, the Saudi tension with Abu Dhabi over the Buraimi Oasis and the ethnic rebellion in the Dhofar province of Oman.” Noting that the Arabs are “tough customers” as “almost anybody else who sits on oil,” the editorial added that “the idea that to crush Israel they would ignore their economic interests, or would turn charitable if Israel were sacrificed, strikes us as a view tinged with the romanticism which has so fogged the Western view of the Middle East.”

PROBLEM IS WITHIN THE U.S.

Luce, of Con Edison, reiterating remarks he made at the 28th annual meeting of the New York Chapter of the American Jewish Committee where he was recipient of the Stanley M. Isaacs Human Relations Award, observed that the U.S. is “as rich in coal as the Middle East is in oil.” He added: “Maybe we have to bring coal back and use it to displace a lot of the oil that we burn. We have to go after our oil and gas reserves that aren’t being tapped….Our country has to increase its own use of nuclear power….Beyond this, of course, is the overpowering need of our nation to become as independent as possible of oil imported from the Middle East and other areas.”

Texaco’s president McKinley, in a statement to the Air and Water subcommittee of the Senate Public Works Committee, said: “While the basic reasons for the 1973 shortages of petroleum products are both complex and controversial, there is little argument among those who have followed the matter closely that a very major factor is a lack of adequate refining capacity within the United States coupled with an inadequate supply of the correct kind of crude oil.”

Sen. Hubert II. Humphrey (D.Minn.) in a speech in Denver last night observed that the U.S. has a legitimate interest in a peaceful Middle.

East and needs easy access to the region a large oil reserves. “But the way to guarantee a dependable oil supply is not to relinquish our support of Israel.” he said.

The former vice-president, addressing the Denver Friends of Yeshiva University, said that “Israel has nothing to do with the current or future shortage of fuel oil and gasoline. Rather, wasteful practices, bad planning, lack of refining capacity, corporate collusion, insufficient mineral exploration, lack-luster research into energy alternatives are some of the basic ingredients of the energy crisis.”

OIL WILL NOT DETERMINE U.S. POLICY

John Scali, U.S. Ambassador to the United Nations, said on a television interview today that the oil issue will not determine U.S. policy in the Middle East. Replying to questions on the NBC “Today” show, Scali said: “While the energy crisis has to be taken into account, it is my view that oil, or the absence of oil from the Middle East specifically for the United States, will not be the determining factor in what the United States does or says in determining its policy in this part of the world.”

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