Windfall for Consumer in Deregulatoin of Oil; J. Chamberlain

My colleague John Roche accu rately notes that the big oil com panies escalated prices the minute the energy tap in Iran was closed off, even though the fuel they were charging for at the gas pump had already cleared the Persian Gulf be fore the Shah had taken it on the lam. Of course! The market always anticipates the future. If something is going to become scarce, it makes no sense to get rid of old inventories as if nothing were going to happen. Conversely, if there is a reason able expectation of a more plentiful supply of fuel in the future, the inclination of buyers will be to lower their inventories, waiting for the day when prices will come down. So everything between now and 1981 will swing on what is done to lighten the burden of car drivers, manufac turers who use electricity, and home owners who have to heat and light their houses. 419 420 THE FREEMAN July What are the prospects for new oil and gas wells? What sort of deal for fuel can be worked out with Mexico?

How soon will that pipeline from Southern California, and the other one from Puget Sound to the Middle West, be finished? How quickly will gasohol, made in a thousand stills from vegetable matter, be available to motorists to mix with gasoline in their tanks? What differences will the new motors that get close to 30 miles a gallon make when Detroit begins to catch up with the Japanese in the competition for the small car market? The other day this column wrote about the experiments of a Miami company in mixing hydrogen and chlorine, two components of sea wa ter, with light in a closed-cycle en gine to form an explosive mixture. Hydrogen unlike crude oil, is all around us. I can't vouch for the chemistry and physics of a hydrogen engine, but Nation's Business, in a long and patient article in the April 1979 issue, quotes from the en dorsements of a number of disin terested authorities (Dr. Daniel Wells, a professor of physics at the University of Miami who has been an investigator for the U.S. Air Force and NASA projects, is an example).

For the life of me, I can't figure out why the testing of the Solar Reactor Corporation's hydrogen chlorine-light motor at Aberdeen, John Chamberlain has en joyed a varied and illustrious career as critic, editor, and journalist. He has been a re porter and daily book colum nist for The New York Times. In add ition to corporation and industry studies for Fortune, Barron's and The Wall Street Journal, his writings have ap peared in numerous other magazines. This article is from his newspaper column, here reprinted by courtesy of King Features Syndicate. Mr. Chamberlain has taught at the School of Journalism of Columbia University and serves as Dean of the Pro gram for the School of Jour nalism at Troy State Univer sity in Alabama. Among his several books are The Roots of Capitalism and The Enter prising Americans: A Busi ness History of The United States. John Chamberlain's book reviews have been a regular feature of The Freeman since 1950.

Maryland, didn't make a few of our front pages. But then, the Dayton, O;hio, papers missed a palpable scoop when the Wright brothers first flew their plane. Besides, all the energy experts were off to Harris1979 ((WINDFALL" FOR CONSUMERS IN DEREGULATION OF OIL 421 burg to cover the Three Mile Island disaster. The Gresham's Law of the media is that bad news always drives out good news. The other day, on the sports page I read about a racing driver who had personally altered his engine to get 67 miles from a gallon of gas. Why wasn't this front page stuff? And why was it left for the Jerusalem Post international edition to print the story of Israel's new technique for extracting oil and gas from shale by the use of laser beams which, when directed at shale through a small diameter pipe for deflection by a mirror, kindles an under ground flame that sends gas to the surface to be condensed into kero ten, a burnable fuel?

Israel has known reserves of two billion tons of shale. If this can be Serving Others economically exploited, it means just so much less pressure on oil companies that are willing to sell to pariah nations. As for South Africa, one of the pariahs, it intends to get half of its gasoline from coal by the early 1980s. I fully realize that nothing in eco nomics comes easy. But when the market promises profits, and there is no bar to freedom of entry into the market by the inventors, the explor ers and the wildcatters, no 0 PEe can sit on the lid forever. Windfalls there may be, but when the govern ment removes its cotton picking regulatory hands from the market the price cutters will take over. They will either give us more effi cient motors or cheaper fuel--or a combination of the two._ @ Copyright, King Features Syndicate. IDEAS ON UBERTY WHEN a person condemns wealth,· he is merely using different words to condemn the profit motivation that causes the production of the maximum amount of goods and services for the greatest number of people....

Personally, I can see nothing wrong or evil about self-interest and serving others because you have to have them serve you in tum. Like anything else, the profit motive and the resulting accumulation of wealth can also be used for evil purposes by evil people. But by and large, the motivation of profit is primarily responsible for the vast amount of mutual service we find among us today. It is responsible for the constantly increasing standard of living in our country and the world in general. It is a moral method of encouraging all of us to serve each other better and effectively. BENJAMINFAIRLESS Melvin D. Barger ... (E)very individual . .. endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that indus try that its produce may be of the greatest value, every individual necessarily labors to render the an nual income ofthe society as great as he can.