Click here for Full Issue of EIR Volume 4, Number 19, May 10, 1977

ENERGY Watergate In A New Persp-ective

Richard Nixon/s Energy Policy
To convince especially Republicans to rally behind the tion spokesmen and press conduits are claiming that Car­ ter's program is really "a more developed version" of Nixon's energy policies. The key difference now, goes the Carter Administration's anti-energy policy, Administra­ Nixon officially ended the method of market demand pro­ rating of the federal off-shore leases, which immediately opened up the offshore areas for massive exploration and production. The independents had publicly been demand­ ing this action; Atlantic Richfield and Phillips Petroleum had just testified to the Senate Interior Committee on the dependents with new oil reserves. Nixon backed up his action with an Interior Department report which estima. ted potential offshore reserves of oil at 200 billion barrels and 850 trillion cubic feet of gas. Such a large amount of oil in the hands of the indepen­ dents threatened Rockefeller control over oil supplies, as immediately after Nixon's action, well as threatening to bring down world prices. Almost environmentalist necessity of expanding offshore drilling to provide the in­

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line, is that Carter, an able strong leader, will be able to implement the program that the incompetent, crooked Nixion could not. James Schlesinger's assistants are leaking to reporters that "President Carter's energy pro­ gram is the product of intense secretive work by a tight circle of officials who drew heavily on ideas and statisti­ strations," according to the April 23 Washington Post. cal models inherited from the Ford and Nixon Admini­ That Nixon and Carter's energy programs were the

same is a boldfaced lie. Carter's program is aimed at massively curtailing energy consumption in order to shut down key parts of the U.S. economy, Nixon's policy was aimed at expanding energy production and consumption, he made compromises with the Rockefellers, Nixon re­ fused to implement the deindustrialization energy pro­ gram demanded by Rockefeller financial circles - the policy that Rockefeller spokesman Carter is now at­ tempting to ram through Congress. gram, he called for expanding offshore oil and gas pro­ duction, increasing imports from fields largely con­ trolled by independent producers, the building of super­ port facilities for these increased imports, and the ex­ panded development of nuclear technology. Nixon was a spokesman for the independent producers, precisely gram. Nixon's programs to increase independent oil pro­ those circles who would be destroyed under Carter's pro­ When Nixon finally proposed an overall energy pro­

groups were mobilized to shut down all offshore drilling. bara channel were suspended because of court actions on suits brought by the environmentalists. Most of the by court actions. leases granted off the Alaska coast were also postponed Although the offshore drilling provision was the most In 1972 alone, half the leases granted in the Santa Bar­

an energy policy geared to expanding industry. Although

emphatic part of Nixon's first public energy statement,

another key aspect of the speech was his discussion of re­ search and development of new energy technologies. metal fast breeder reactor, a technique that is crucial for the Carter program.
The. Oi/lmport Quota Controversy

Specifically, Nixon called for the building of the liquid energy growth - and one that is to be shut down under

Although Nixon made his first public move to expand energy production in 1971, for the two previous years he had been discussing with independents the possibility of removing one of the major laws protecting Rockefeller control over international oil - oil import quotas. The quota on the amount of oil that could be brought into the U.S. was established in 1959, and was aimed at sabotag­ ing the independents' expansion in the Middle East oil­ fields. The larger independents had just begun to expand · into the area, and quotas would prevent them from ex­ porting to the major market in the U.S. that Nixon lift the quotas, or at least establish quota-free demanded that a trade zone open for imports be estab­ zones. In January of that year, Shaheen Resources Beginning in 1969, the independents began demanding

duction directly challenged the Rockefellers' ability to dominate or politically blackmail countries through their control of world oil supplies. In order to prevent this, a major mobilization of Rocke­

feller-linked environmentalist groups was organized to protest expanded offshore production, superports, nu­ clear technology development and so on. It should be no surprise that no-energy czar James Schlesinger's clo­ sest associate on energy policy, former Ford Foundation country in 1973 denouncing Nixon's program.
Nixon's First Energy Statement

Energy program head S.David Freetnan, toured the

message to Congress, declaring that the further develop­ would be the cornerstone of his domestic energy policy.

On June 4, 1971 Nixon delivered his first energy

lished at Machiasport, Maine, an area where Shaheen planned a large refinery and port complex. Shaheen's request had special impact on Nixon - he had been their ENERGY 1

ment of the Outer Continental Shelf oil and gas deposits

lawyer during the mid-1960s.

© 1977 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited.

major superport at Machiasport to bring in the oil p�o­ duced in their Alaskan fields. A letter was immediately dispatched by the President

At the same time, Atlantic Richfield wanted to build a

based economy. Nixon's policy statement not acCident­ ally coincided with moves by several European govern­ ments to expand their own energy supplies and free themselves from Rockefeller-controlled oil. The major feature of Nixon's April policy speech was the elimination of the oil import quota, replacing it with licensing fees designed specifically to help the non-inte­ grated companies. Nixon declared: "Today the Manda­ tory Oil Import Program is of virtually no benefit any longer; Instead it has the real potential of aggravating our supply problems." The Oil Imports Appeals Board major oil companies, refiners and marketers who ex­ was authorized to grant fee-exempt licenses to non­

of the American Petroleum Institute (also a chief exec­ utive of Standard Oil of New Jersey) to Nixon demanding a long review process before any such ports or trade zones were allowed. The leading environment protection organization, the Sierra Club, issued a report claiming that a superport at Machiasport would drastically

damage the area. These actions, plus undoubtedly more covert pressure, succeeded in stalling any government action on the request. The following year, two other companies again demanded that Nixon change oil import quotas so that they could develop major, importing centers in Machias­ port. King Resources, which was tied to the Nixon-linked Investors Overseas Corporation, had 3.3 million acres of land near Portland, Maine and wanted to build a major refinery-superport complex to import Iranian oil. At the same time Occidental oil requested an exception to the quotas to allow them to build a Machiasport refin­ ery and port for the Libyan oil which they were then just beginning to develop. While the Nixon Administration debated what to do about the oil import quotas, the oil companies' plans for major port and refinery centers in Maine were in large part destroyed by protests from environmentalist groups and strict environmental protection legislation drawn up by then-Maine Governor Kenneth Curtis, now Chairman of the Democratic Party National Committee. Maine's Environmental Improvement Commission voted against the King Resources plan. Although the Nixon White House stalled on any major change in the oil import quota program, Nixon began to increase the amount of oil imported in 1972. That year,

perienced hardships. Integrated companies could apply to supply established independent refiners with 1972 allo­

for such licenses but they had to prove "their willingness

cations of crude." The Board was advised to listen to ap­ marketers to ensure that they received adequate sup­ plies. peals on decisions from the independent jobbers and

William Simon, one of Nixon's main energy advisors,

problems as we could to help the independent segment adjust to the new economics of the oil industry."

said at the time that "We have tried to confront as many

The entire April 18 statement aimed at expanding U.S.

energy supplies and strengthening the independent pro­ ducers. Some key proposals were: developed, beginning with an additional 10 million acres in 1975; 2. Completing the Alaska pipeline; 3. Giving a 7 percent investment tax credit for new exploratory wells; 4. Facilitating licensing and siting for deepwater ports for very large tankers - Nixon also proposed that the government assist in designing new supertankers to be produced in the U.S.; 5. 6. Importing and constructing facilities for liquified Expediting the siting and licensing for light water natural gas; reactors and providing money for establishing a com­ mercial liquid metal fast breeder reactor; 7. Expanding fusion research with "the goal of an energy policy in' nuclear fusion to achieve scientific breakthrough in fusion heating and confinement by 1980.," The statement also discussed coal gasification, geo­ thermal energy, oil shale and solar energy, but the fund­ ing for these insane programs was limited and most of the money for new technology was put into nuclear energy. Nixon paid only lip service to conservation,' conservation techniques! To implement this program noting only how a federal building was using advanced Nixon proposed a Department of Energy and Natural Re­ sources. , A few days later William Simon, then head of the Oil 1. Tripling the Outer Continental Shelf lands being

quested that the quotas be raised 250,000-300,000 barrels a day, while some smaller independents demanded, through the American Petroleum Refiners Association, increased imports of 250,000 barrels daily. On May 23 Nixon announced an increase of 230,000 demanded another 200,000 barrels a day increase; in September, Nixon allowed companies to increase their quotas 10 percent. Only Rockefeller's Exxon Oil Com­ meeting, a top Exxon official told Nixon's Oil Policy pany vocally criticized the quotl:\ increases. At a March Committee that "there is no need for additional crude oil barrels a day. Two months later the same companies

Ashland Oil, Clark Oil and Standard of Ohio had all re­

imports in 1972." In April, Exxon was saying that if there 100,000 barrels a day was sufficient. had to be a change in the quotas, then an increase of

Nixon '5 1973 Policy

All of Nixon's hesitation to clearly detail and enact a sound energy program came to an end in 1973. In April of that year, Nixon issued his second energy message to Congress and outlined a program to drastically increase domestic oil and gas production, imports of oil and to develop new energy technologies, including nuclear. Nixon's program, if it had been fully carried out, would energy needs while moving towards a fusion power2 ENERGY have provided a good basis for supplying the natI on's

Policy Committee, testified on Nixon's energy program, attacking the environmentalists for preventing needed

production and lambasting the majors for creating short­ ages of oil affecting especially industry and agriculture. "We cannot afford to let crops go unplanted or un­ harvested for lack of diesel; we cannot let our vital indus­ tries close down. We should not let the independent seg-

ment of the industry be forced to shut down," said Simon.
Oil Embargo. Watergate Launched

sources out of the European and U.S. economies. Nixon, put under tremendous pressure to act to alleviate the shortages and force Americans to cut consumption to make America "free from foreign energy blackmail," announced Project Independence, itself an attempt to make a deal with the Rockefeller circles. Nixon's Project Independence speech in late

Nixon's decisive April speech came at a major crisis period for his opponents. The international financial cris­ is was reaching its height, and the New York banks were in a very precarious position. Unless they could enforce a new round of looting, especially of European economies, the Rockefeller banks faced collapse. Leading anti­ " Atlanticist factions in Europe were coordinating a strat­ egy to make Europe independent from the Rockefeller­ run oil companies as part of a larger industrial growth policy. The Rockefeller-dominated oil interests could not afford to have an American President in any way aiding this European challenge. One of their immediate re­ into a major challenge to the Nixon presidency itself.

1973

emphasized conserva·

tion, but at the same time provided for a

$10

billion, five·

year fund for research of new technology; primarily nu­ clear investment tax credits were proposed for new oil and gas drilling. With Project Independence, Nixon made it clear that he would not openly attack the financial circles behind the oil shortage hoax and Watergate. By January, Nixon was calling in his State of the Union message for a spec­ ial energy act to restrict consumption and legislation to promote the Clean Air Act, the law which has been large­ ly used since by environmentalists to shut down industry. As is well known, at every compromise of this sort, Nixon was hit with renewed attacks.

sponses was to rapidly escalate the Watergate scandal While Watergate was engulfing Nixon, these same

Rockefeller circles launched the Arab-Israeli war and the ensuing oil embargo, gouging enormous financial re-

ENERGY

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