The Hereford Brand (Hereford, Tex.), Vol. 76, No. 220, Ed. 1 Sunday, May 7, 1978 Page: 3 of 62
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The Hereford Bnnd-Sundey, May 7,1 $7®-ft ft* 3A
Houston Growing Up
Carter has proposed instead
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______HEREFORD
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and secondary school costs as
well. And the Senate, in
debating the budget, did not go
into the disputed issue of aid to
parochial schools.
At issue is the domino-like fallout from
the 1.2 million barrels of Prudhoe Bay
crude oil that is pouring out the end of the
trsns-Alaska pipeline into West Coast-
bound tankers every day of the year.
Because of an unexpected reduction in
the rate of West Coast energy demand
and the complex vagaries of oil industry
economics and federal regulations, the
realities of Alaska oil production has been
in start contrast to expectations.
When the new production from
Prudhoe Bay combined with foreign
imports and California production, the
' amount of crude oil flowing into the West
Coast quickly exceeded the capacity of
refineries to process it.
The surplus has grown to a current
level of 650.000 barrels a day. And
assuming that all potential reserves in
California and Alaska are developed,
some economists have predicted that the
glut could grow to as much as 1.6 million
barrels a day by 1980 and 2.2 million
barrels a day by 1985 if something isn’t
done.
The economic impact of the surplus on
the treasuries of both states has been
severe.
For Alaska, the surplus is forcing the
trans-shipment of 600,000 barrels a day
of Prudhoe Bay oil through the Panama
Canal to Gulf Coast refineries,
significantly increasing the cost of
transportation and reducing the well head
value of the crude by a like amount.
Alaska's one-eighth royalty share of
Prudhoe Bay oil and severance taxes are
based on the well head price, and the
current reduction in value is costing the
state about $100 million a year.
In California, the flood of Alaska
production and the importation of about
700,000 barrels a day of high-quality
foreign crude is forcing heavy
California-produced oil out of the market
Uansportatiori?
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Alaska should negotiate a conditional oil
swap of its royalty share of Prudhoe Bay
crude to avoid the political liability of
involving the major oil comp anies.
He said Alaska could sell I ts royalty oil
to a Japanese trading ompany in
exchange for North Sea oil. a move which
would eliminate "arguments that we
were selling the coffers of the Middle
East oil sheiks."
economic and national security sense.
Alaska and California officials acknow-
ledge that an oil swap will be hard to sell
in Washington. D.C.
Arion Tussing. Alaska’s leading
economist and a member of the state s
delegation to California, said the Carter
administration and Congress are
reluctant to face the issue because of its
political sensitivity.
“Many members of Congress feel they
were lied to during debate on the pipeline
by the oil companies which all assured
the country that the pipeline would create
no surplus on the West Coast and they
had no intentions of exporting Alaska oil
to Japan,” Tussing told Alaska’s
delegation in a briefing Thursday.
Tussing said he discussed the issue last
week in visits with high-level
administration officials and congressional
leaders and came away with the
impression that the political obstacles
could be overcome ( with the right
strategy.
A former adviser to Sen. Henry
Jackson, D-Wash.. Tussing said a joint
California-Alaska strategy must include a
specific, easily understood plan which
includes benefits for consumers as well as
Calfornia and Alaska.
For the short-term. Tussing said
HOUSTON (AP) - While yet
another new building was going
up next door, inside a
112-year-old church on the edge parking facilities.
Alfred CaBoway, vice presi-
dent of the Houston Citizens
Chamber of Commerce • an
Where people go who cannot
afford to live in developments
designed to revitalize their
_____ _ ' ‘ ‘ ’ 3
dilemma the" vice chairman of
___________ Houston's second largest bank
a competitive said needs more study.
-’-J "I believe the consideration
Houston’s of the displacement problem is
than inadequate in this dty,” Dr.
Leslie C. Peacock of Texas
Commerce Bancshares said.
Hines called displacement “a
__ jmj
said countries like India and
"more
To Get Through Congress
Ho^riSg strongly on^d^^Vf.^'of have ro concentrate on the
Congress will pass a tax credit credits for elementary and controllable items. That could
■ - ---j $econd*ry students as well as result, he said, in deep cuts in
ST t\lT’c.ro »d
administration of the Social
Security system.
C.G. Mosander discovered the
element terbium in 1843. Fie
first named the oxide erbia, but
it has been known as terbia
since 1877.
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"Then we could take tlie $2 that we
saved on transportation and divide the
benefits among the refiners, consumers
in |he lower 48 and the maritime unions
in shipping a percentage of the oil to
Japan in Jones Act tankero.” Tussing
said.
For the long-term. Tussing said
California would have to make a hard
commitment to approving construction of
a long-delayed pipeline between Long
Beach and Texas.
Officials also said some form of
incentives program would have to be
developed to allow Calif ornia refiners to
make the $750 million investment
required to retro-fit their plants to handle
heavy crudes.
In Alaska. Tussing said the state
should make a commitment to increasing
oil production.
Fire Fighter
of The Week
JUNEAU Alaska (AP) - Alaska and
■ California officials have climaxed weeks
of private talks with an accord to meet
formally on forging a unified national
campaign to relieve the costly West Coast
. oil surplus.
The unique liason effort disclosed this
week by high-ranking officials from both
states will be aimed at diagnosing
potential oil glut cures for presentation to
President Carter and Congress
Representatives from the administra-
tions of California Gov. Jerry Brown and
Alaska Gov. Jay Hammond as well as
legislative leaders from both states have
scheduled a meeting in Sacramento
Monday to begin exploratory negotiations
j on developing a common strategy.
Officials said they hope the formal talks
will lead to a joint hearing by a committee
’: of Alaska and California legislators
culminating in an agreement on both
short-term and long-term solutions to the
surplus.
William Northrup, executive director of
the California Land Commission,
described the bi-state effort as “the last
best hope for resolving what can only be
described as a crisis.”
Sterling Gallagher, commissioner of
the Alaska bepartment of Revenue, said
Alaska and California are natural allies
because "the surplus has hit us both
where it hurts-in the pocketbook.”
Officials from both states said they
should have little trouble demonstrating
'the extent of adverse economic and
national security consequences arising
from the West Coast surplus.
But they agree they will face a severe
test in winning approval for the most
logical short-term cure for the
problem-the export of Alaska oil to Japan
in exchange for the trans-shipment of
Japanese-owned foreign oil to the East
Coast.
Alaska, California Achieve Oil Agreement
About 100,000 barrels 4 day of
California production has been shut in
altogether because of the glut and output
of another 100.000 barrels a day from
highcost marginal wells has been halted
because the oil costs more to pump than
its worth on the market, Northrup said.
In Alaska, Gallagher said the West
Coast surplus has caused serious
questions about the willingness of
Prudhoe Bay producers to follow up on
their schedule to increase pipeline
capacity to 15 million barrels a day next
year or drill new wells on the North Slope.
"Every barrel of oil that is shut in and
every barrel of oil that is not produced
equals another barrel of oil that we have
to import," said Alaska Natural
Resources Commissioner Robert LeRes-
che. “It's as simple as that.”
Alaska officials have estimated a $2 per
barrel transportation savings if Alaska oil
could be shipped from the pipeline
terminal at Valdex to Japan in return for a
like amount of foreign oil shipped to the
East Coast.
However, the federal Trans-Alaska
Pipeline Act requires a presidential
finding, which can be vetoed by
Congress, as a prerequisite to the export
of North Slope oil.
But even though exports makes
House Hints Credit Plan
The House, however, went
on record specifically in favor of
credits for elementary and
secondary students as well as
those in college. By a 199-173
vote it decided on credits across
the board over one confined to
college tuition.
Rep. Thomas A. Luken.
D-Ohio. sponsor of the House
plan, said it would allow for
credits up to 25 percent of
tuition, with ceilings of $150 for
college tuition and $100 for
tuition for lower schools.
The House has suspended
work on the budget resolution
until Tuesday.
A major test still pending is
on an expected move to cut the
$500.5 billion spending budget
next year by 2 percent overall.
"Nothing could be more
unrealistic.’' the budget com-
mittee chairman. Rep. Robert
N. Giaimo, D-Conn., said in a
letter to House members.
nos W uu . Giaimo said all but 28 percent
The Senate budget item does’*’ of the budget is determined by
milM Ions and 13.5 milts not tr —w
acroaa at its widest point, are to be available only for
About 700 miles of the river are college tuition or for elementary
navigable. >
Die city~7~ Binghamton,
to aiscuss uiuc ™ N.Y., is named afta the dila-
tion, Calloway said, is to make delphia patriot and multi-mil-
people aware of the federal Uonaire William Bingham.
up
______
of downtown Houston partici-
pants in a two-day conference
began to talk Friday about
revitalizing the core of the organization of black business-
nation's fastest-growing city. men ■ * >-•—»
And although there was developers and bankers pro-
aereement among the bankers, bably have one “inner city” m
— ■ ■ —. mind while minority group
members and tow-income whi-
is tes think in terms of others.
“Tearing down <
structures in the Fourth Ward
an old I _
to downtown to make room for
Go.
Cfuneral
105 GREENWOODvHEREFORD, TEXAS 7904$
“There ia still a lot of
ol,______
dty from rome rector..''J^
ond largest river system in
South America. It is
across a' its widest point.
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groups of people out of one are*
and into another.
But he added it was the
_____function of government • and
foToimmereiai Design showed not private developers - to
the 1.6 square-mile area pays its provide adequafe low-cost
own way and has a far tower housing.
crime rate than popularly The City of Houston will go
N.Y., is named after
Uonaire William Bingham.
after the federal money to which
_________________“ entitled to use in the
‘reridential’ho'usiag and revitalization process. Mayor
Jim McCann said.
Until recently Houston ap-
plied for and received few
federal funds earmarked for
community development pro-
Ts^d major investment jeda.^ # ~
ibjection to rebuilding the inner just another meeting.”
devetooers, city officials, educa- mind while minority group < . , j-
Xityb^“«‘n^ tradfttonriprtt’er^ofrestoe^
strt^in^Fo^E
w^ toTu^n an old neighborhood dore when you decide to rebuild the
The conference, headquarter- to downtown to make room for
ed at Antioch Baptist Church, is $50,000 townhouses isn't what
co-sponsored by the City of many people would call
Houston, the Texas Historical revitalizing the inner city,
Foundation and Commission CaBoway said,
and other civic groups.
Gerald Hines, whose invest-
ment development firm is —_
responsible for much of former neighborhoods ts a
Houston’s striking skyline, said
good commercial architecture
helps create l
business climate. He also
admitted later that li-
mner city needs more
impressive skyscrapers to keep
it alive.
“We've got to get people to ti
move back into the center city - tough politKa! decision^
people on the street at night is s-l-------— —
what keeps it alive,” Hines Egypt have adopted
said, “and good mass transit is humane” approaches to moving
going to be very important.”
A recent study of downtown
Houston done for the Chamber
of Commerce by the Rice Center
because refineries there are not equipped
to produce anything but residual fuel
from the tow-quality feedstock.
With a total production capacity of up
to 900.000 barrels of oil a day, California
currently ia choked with a 90-day
oversupply of residual, a fuel normally
burned in tankers and power plants.
The surplus in California also has been
seriously compounded by the federal
government’s so-called entitlements
program, which is designed to impose
financial penalties and rewards on
refiners to equalize the cost of
price-controlled U.S. oil and the
uncontrolled price of foreign oil.
J The complex formula, however, is
based on the higher quality oil produced
east of the Rockies and has forced the
market value of California oil to way
below ceiling prices.
In general, a barrel of California oil
that sold for $4 several months ago is now
going for $2.85.
California does not collect a severance
tax but the state and local governments
themselves own about 100,000 barrels t
day of production. On the state level,
most of the money goes into special funds
for moving water from the northern to the
southern part of the state and college
construction.
“If something isn’t done, we estimate
that within five years there will be no
more money in the college fund and che
water fund will go dry in six or seven
years," Northrup said.
Northrup said the state will collect J92
million in oil revenues this year but the
resource income will drop to $76 million
next year and $36 million by 1982.
In addition to the economic impact,__.________
Alaska and California officials said the p|an t0 help parents pay
surplus also is having a significant e<jucatiOn bills even though
adverse effect on America’s efforts to p^yent Carter doesn't like the
become more energy independent. jje,.
By a 227-136 vote last week
the House overruled its budget
committee and agreed to make
room in the tentative federal
budget for $635 million in
tuition tax credits. The budget
takes effect Oct. 1.
The Senate already has taken
housing and development pro- action in its version of
grams and funds and what they non-binding fiscal plan
can do to overcome the developed in Congress,
reluctance of banks to lend Legislation providing for tuition
money for projects in risk areas, ^yns has not come to a vote
"But if anything really yet in either chamber.
important is going to happen. Carter has proposed instead
we’ve got to get down to work of tuttion tax credits liberalizing
and then follow this all up,” he existing student loan and grant
programs. He thinks that would
allow more middle,-incpme
students- to qualify and. more
funds to be available.
specify whether the credits relatively controllable items
such as Social Security, interest,
veterans' entitlements, farm
payments and unemployment
compensation.
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Sims, Paul. The Hereford Brand (Hereford, Tex.), Vol. 76, No. 220, Ed. 1 Sunday, May 7, 1978, newspaper, May 7, 1978; Hereford, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1348136/m1/3/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Deaf Smith County Library.