European Stars And Stripes (Newspaper) - November 17, 1973, Darmstadt, Hesse                                Page 10 the stars and stripes saturday november 17, 1973 Petroleum tips Scales of Power continued from Page 9 rope import 72 per cent of their Petroleum from the Region and Japan fills More than 80 per cent of its needs from the persian Gulf alone. To reach the current Levels of production billions of dollars in foreign capital have been invested in the Region with american firms the most heavily involved. As a result the Middle East has become the prime source of Petroleum products for a number of the International of companies. It fills 40 per cent of Exxon s world production 60 per cent of Gulf s most of it comes from kuwait48 per cent of Mobil a 64 per cent of Standard of califor Nia s and 52 per cent of Texaco s. The rapid accumulation of Oil wealth has produced remarkable changes in the living standards and attitudes of the Region s nations. With new found political Power it has been easier for these nations to carry out threats to nationalize foreign Oil companies. In saudi Arabia generally considered the most conservative of the Arab nations per capita income is expected to be twice that of Britain by the mid-1980s. Other aspects of Oil Power relate to Trade currency matters and balance of payments. Trade changes changes in Trade patterns have been startling. From 1970 to 1972, the combined Trade deficit of the Industrial nations with the Oil producing states increased by More than 40 per cent to $9 billion. During this period the deficit of the United states to Oil producing nations quadrupled a fact that underlines the importance of Oil in Trade and balance of  ments figures. The role of Oil imports in contributing to America s first Trade deficits of the Century in 1971 and 1972 is now an accepted fact. As for the future economists predict the Western nations will have to work harder and harder to maintain favourable Trade balances. Rising Oil prices now Are taken for granted and this Means user nations will have to do More in terms of offsetting exports. If they fail and balances remain in arrears they will face the threat of currency devaluations which will produce new Price increases for the Oil they must import. Money experts cite the role of Arab Capi Tal in the International currency crisis ear Lier this year As an Omen of things to come. Libya has already asserted its economic Independence by rejecting dollars As  ment for Oil exports and urging creditors tankers take on Oil at Mas Ira off the arabian Peninsula. To put up Gold or other hard currencies instead. With swollen Cash reserves produced by Large Trade surpluses the Oil producing states Are in the enviable position of being Able to Cut the Supply of Petroleum at Little loss to themselves. Libya for one has accumulated sufficient currency reserves to go three or four years without new Oil sales. Kuwait found itself in a similar position several years ago when it decided to limit Oil production to 3 million by. Expressing a similar philosophy saudi Arabia s Deputy minister of Petroleum Prince Saud recently suggested that Oil reserves in the ground May be More Valu Able in the Long term than reserves in a foreign Bank. The policy of open to push for higher and higher prices seems to con firm this argument. Against this Arab Oil policy the Industrial nations have yet to mount a cogent counterattack. Several Western leaders have called for discussions among consumer states and James e. Aikens the state department Energy expert who reported just last month to his new Post As ambassador to saudi Arabia would like to see a Supranational authority among the major Petroleum importers. In the ., which consumes 30 per cent of the world s Energy with Only 6 per cent. Of its population both Short term and Long term remedies Are being recommended. Aikens believes the current  Petroleum import figure of 7 million by is already too High. But How is the use of Petroleum to be reduced when All forecasts indicate in creased consumption and some depend ence on the Middle East  source of Supply Over the Short term Aikens says the Alaska pipeline should be built to accommodate the estimated 2.5 million by of alaskan Oil which otherwise would have to be imported. Further he suggests an increased use of Coal a stepped up program to find new sources of Domestic Oil and a new Federal tax to help build needed fuel storage facilities and to finance research which ultimately should Lead to Energy substitute for the Fossil fuels. If current trends continue and if new Domestic sources of Oil Coal and natural Gas Are not tapped economists say that by 1980 total Oil imports to the  Could run up to 14 million by in a 24 million by con sumption. Cost estimates for this huge import Bill Range up to $40 billion a year a figure that would be extremely difficult to offset with exports. Huge expenditures Aikens foresees huge expenditures to develop an Energy program that will make the  Less dependent on imported Oil and he says the goal should be to keep 1980 Oil imports at the current 7 million by level. Long Range solutions to the Oil squeeze Point to the use of nuclear Power and ther Mal Energy and the production of Oil from shale and tar Sands a highly expensive process that will require a capital in vestment of $5 billion to $7 billion to pro Duce 1 million by. With Arab Oil prices on the Rise this May be a feasible alternative and government experts believe the 1 million by output could be achieved by 1985. Most immediate remedies Point to the consuming Public. A number of suggestions have been directed at the automobile which accounts for some 40 per cent of All  Petroleum consumption. Lower Speed limits and More frequent engine tuneup appear to be the quickest Means to reduce Gas consumption. One conservationist says american should switch to smaller cars. And on the Home front householders Are urged to lower their thermostats in an Effort to save heating fuel. The Power politics of the Energy crisis May be too much for the Little Man to understand but before it s Over he is sure to feel the Pinch. Man has known of Oil for thousands of years although the Modem Petroleum Industry dates from 1859 when the first successful Oil Well was struck near Titusville pa., Oil has been known to Man for thou Sands of years. The Middle East where the world s larg est reserves have been found in recent years is believed to be the Region where the first practical use of Petroleum was made. Noah is credited with sealing the Ark both within and without with pitch which also is described As Bitumen. The historian Herodotus reported that hot Bitumen was used instead of mortar in the construction of the great Wall in baby Lon. In Early Egypt undertakers combined Asphalt with other ingredients to produce the ancient world s most effective embalming process. Centuries later Cicero wrote about the use of crude Oil lamps and still later that inveterate traveler Marco Polo described Oil deposits in the Caspian sea Region. In the Western hemisphere american indians valued Petroleum As Medicine. Early colonists followed the advice of indians and by the Middle of the 19th Century Petroleum was being sold in drugstores. A few decades earlier the development of machines and factories had created a Large demand for lubricants and lighting oils a demand that eventually could t be satisfied by a booming whaling Industry. The discovery of Oil in Pennsylvania saved the Day. It provided Industry with a much needed substitute for whale Oil. Financed by a group from new Haven conn., and led by one time railway con Ductor colonel Edwin Drake the Ven Ture that led to the first Well set in motion one of the phenomenal growths in the his tory of Industry. Within a decade following Drake s Dis covery Oil was being produced in Russia Romania Canada and Italy. By 1900, Petroleum had been discovered in Poland Japan Germany India Peru and the dutch East indies or present Day in Donesia. It was during these formative and speculative years that today s giants of the Industry led by such companies As Stan Dard Oil of new Jersey Exxon Standard Oil of California Gulf Texaco and others got their Start. Throughout this period the real Spur to the use of Petroleum products was the. Internal combustion engine. With popular acceptance of the Auto Mobile there was no stopping the Industry. Billions of dollars was poured into research projects and to finance search expeditions for new sources of Oil. With discovery of Petroleum in Iran in 1908, the Industry began to recognize the potential of the Middle East. Iran s first shipment of Oil came four years later from Abadan which today has developed into one of the world s great re fining facilities. During world War i the new Industry in Iran was kept Busy supplying the needs of the British Navy s newly converted Oil burning ships. Between the world wars Petroleum was discovered in Iraq Kuwait Bahrain an saudi Arabia. But the big Oil Rush came to the Middle East following world War ii As War torn industries were rebuilt and Eastern Hemi sphere nations developed new Industrial muscle. Almost overnight the rags to riches tale was repeated As Oil began to flow from such tiny persian Gulf sheikh Doms As Abu Dahabi Qatar Oman and Dubai. In Iran where the Industry had a head Start Petroleum Revenue was being used to modernize a nation and the Industry was Given technical training to  similar Story was evident in saudi Arabia where the giant arabian Ameri can Oil company Aramco dominates the Industry. By 1967, the Middle East Oil producing countries had moved ahead in their com petition for world production. In a sense the new Oil Prosperity seemed to be an Echo of the past when great empires were a Rule in the Region. Evidence of the new wealth is most obvious on the Gulf itself where the world s greatest Oil tankers ply Waters that once carried empowers and spice traders. Bob Hoyer