The Frigid Nightmare

Americans have been warned since 1970 to expect serious winter fuel shortages, but in the past two years relatively mild weather enabled the nation to stretch its thin energy supplies far enough to cover nearly all heating needs. This year, as many areas shiver into the beginning of what meteorologists forecast will be a long hard winter, the nightmare of cold furnaces is becoming real. Although most homes probably will be well heated, the shortage could disrupt the economy by forcing some factories, stores and offices to close.

The iciest pinch is likely to be felt in such Midwest states as Indiana and Nebraska. Iowa, which has been struggling through temperatures as low as zero in recent weeks, is already facing an emergency. Two weeks ago, scarcities of natural gas, the region's most commonly used fuel, forced suppliers to stop servicing customers who have "interruptible" contracts. Generally, these are factories and other businesses which are capable of converting to oil or propane. Because of the dearth of refineries in the Midwest, oil is scarcer in Iowa than in other parts of the country, and what reserves are available are being drained quickly.

Last week Des Moines' biggest supplier, MacMillan Oil Co., shut off deliveries to more than 50 major customers, including businesses, colleges and apartment houses, all of which will have to find new fuel sources or go cold. Wolf's Department Store, the Polk County Jaii and St. John's Catholic Church and grade school are all running low; Father John Dorton worries that "you can't have kids in class freezing." For want of fuel, some firms like AMF Western Tool Division (which turns out lawnmowers and such winter products as snowplows) and Can Tex (which manufactures brick, tile and sewer pipe at plants in Ottumwa, Redfield and Mason City) have had to stop production altogether or cancel night shifts. Governor Robert Ray has asked the University of Iowa and all large businesses in the state to switch back to burning highly polluting No. 5 or No. 6 fuel oil in order to stretch supplies of low-polluting No. 2 oil needed to heat Iowa homes. Coal, the dirtiest heating source, is plentiful in the Midwest, but most homes and houses have shifted to cleaner fuels and are not equipped to burn it.

About 60% of Iowa's heating fuel is supplied by independent companies which have traditionally bought whatever emergency stores they needed from big national firms. This year major companies like American, Standard-Indiana and Gulf Oil say that they cannot sell fuel to smaller concerns because they need all their reserves to supply their own customers. Democratic Congressman Neal Smith of Iowa charges that the giants are trying to freeze out the small firms, and has called on the Justice Department to investigate possible breaches of antitrust laws.

Prospects for winter warmth are somewhat better in the rest of the nation. Although pipeline companies are curtailing gas deliveries to factories and utilities from New York to California, most areas outside the Midwest have enough oil to keep furnaces glowing, at least for the present. But there is every reason to believe that the U.S. power shortage will get considerably worse before it gets better.

Natural gas, which now provides a third of the nation's energy requirement, has gained enormous popularity because it is cheap (federal regulations hold the wellhead price to a low 200 per 1,000 cu. ft.) and clean. But producers claim that inflation and the fact that large remaining reserves are deep underground make exploration and production increasingly costly. Last year only 15 trillion cu. ft. of new gas was found, while U.S. consumption hit 22 trillion cu. ft. Supplies of No. 2 oil also are becoming tight in places outside Iowa. One reason: refineries last summer held down production of heating oil in favor of gasoline, which is more profitable.

The Nixon Administration is formulating a national energy policy which might result in increased imports of oil and liquid natural gas from the Middle East and Soviet Union. Even so, the cost of heating a home, factory or office seems sure to rise sharply in coming years. Last week the National Petroleum Council, an advisory group appointed by the Department of the Interior, estimated that if adequate exploration and production are to be encouraged, the wellhead price of U.S. oil will have to rise as much as 125% in the next twelve years. The price of natural gas may have to shoot up 250%.

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