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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Dec. 17, 1979)
THE BATTALION Page 5 MONDAY, DECEMBER 17, 1979 us try ma^ fcrca^ ems in ] ei iiana. :rail gc, infe 1 Producen, ^ Louisian, st a ggravaij said, '% l( J't seems J o, the less j Iowa,foi t!a r o calling tlj ' d their tj gallon transji] 1 72 centsji Jed to Iowa age 80s latural gasp-, r. use to | we are eoutofnah annotconta ate, bulJii nit of gas in' oil and ileted. ms of regia ion of eneij icrgy sitafe il govenuna utilities s users toc» uel, sonatm id burned o other state power s and costs; They woia they can e in baseme: Energy Texas" immunity from crisis probably at an end United Press International On Jan. 1, 1970, Texas whipped Notre Dame in the Cotton Bowl for the Longhorns’ 20th straight football victory, Sharpstown was a Houston shopping center, not a political scan dal, and Texans waited for “double Green Stamp day” at gas stations. Regular gasoline had broken the 30-cent barrier, but a thousand cubic feet of natural gas still sold in the field for a dime less. There wasn’t a utility in the state that burned lignite and uranium was such a novelty that it hadn’t even occurred to the legisla ture to tax it. A decade later “Texas ’ and “ener gy crisis ’ no longer are mutually ex clusive. It is not surprising that in a state where energy abundance was taken so much for granted, residents who recently idled their engines in gasoline lines would be asking what happened to energy duri ng the 1970s. The answer: a little bit of every thing. In 1972 the Texas Railroad Com mission, regulatory agency over seeing oil and gas production, made an historic break with the past. For more than 40 years, the commission had controlled the rate at which oil could be removed from Texas fields and kept it below what physically was possible. Indiscriminate pumping lessened reservoir pressure, shortening the life of a field. Overproduction glut ted the market and resulted in de pressed prices ever since the original Texas gusher — Spindletop — was brought in in 1901. Cleopatra s gems might be "fakes' United Press International NEW YORK — Some of Queen Cleopatra’s dazzling jewels probably were imitations, according to some jewelry experts. The artisans of Alexandria in ancient Egypt were skillful workers in glass gems and their craft was car ried over and further developed in the days of the first two centuries of the Roman empire, according to re searchers at Trifari jewels. Thus, they say, it is probable that the dazzling trappings used by Cleopatra included many cut glass and imitation stones. But in April 1972, with the nation al thirst for oil unquenchable, the monthly oil allowable was increased to 100 percent (of the amount that the laws of physics prescribed would guarantee the maximum longevity of the field). Only four months earlier, the allowable had been 67.5 percent. Of all of the elements of energy .production and consumption in the 1970s, nothing outside of price is as dramatic as the fact that the flow of oil from Texas wells has decreased in each of the past seven years despite all-out production. “It’s very simple,’’ Railroad Com missioner Mack Wallace said in ex planation. “Texas fields are matur ing. Pressure is declining in various areas throughout the state. Texas is the most picked over state in the union. Texas declines at 3 to 4 per cent per year. There’s no way to arrest that decline. “We leave in the ground 68 per cent of all the oil. We only recover 32 percent. That’s not because of lack of desire, but because of technology. They’re using water, chemicals, ev erything conceivable to make the earth give up this oil. That’s what Texas does continuously is try to re cover this oil. But at best, we get 32 percent, which is 4 percent better than the other states average.” The state taxes the flow of oil from its wells at the rate of 4.6 percent of market value. In the 1970s, that meant revenues of $3,273 billion. But at only 5 cents a gallon — the lowest gasoline tax in the nation — Texans bought enough fuel (includ ing diesel and liquefied petroleum gas) during the same period to pro duce $4,009 billion in revenues. Add the natural gas occupation tax (7.5 percent of the market value of the gas produced) of $2,783 billion and the state's energy production taxes for the decade totaled $10,065 billion. The prospect for a similar revenue bonanza in the next decade is uncer tain. Oil production may continue to skid but could be offset by a higher market value for each barrel. If Con gress determines the nation is to be free of foreign dependence on oil, price controls could be dissolved and exploration increased. In Austin, de clining production might stimilate the legislature to include lignite or uranium among the natural re sources to be taxed. Of the 25,026 exploratory wells drilled in the state from 1970 to 1978, fully 18,159 — 72.5 percent — were dry holes. Last year, 396 wildcat wells found oil, 780 brought in gas and 2,708 struck out. Throughout the ‘70s, the incen tives designed to spur energy explor ation (and conservation) never quite seemed to match the restrictions placed on producers. Two weeks before the beginnings of the 1970s, a strategic disincentive cited by the industry (and the Rail road Commisson which traditionally has mirrored the industry) was signed into law by President Richard Nixon. Since 1926, Texas oilmen benefit- ted from a federal tax provison known as the oil depletion allo wance. To offset the exhaustion of a natural resource, 27.5 percent of the gross income derived from oil was not taxed. In 1950 President Harry Truman said no tax loophole was “so inequitable.” But he wasn’t able to remove the allowance. The 1969 Tax Reform Act signed by Nixon Christmas week cut the allowance to 22 percent. In early 1975 Congress finished the job, re pealing the 22 percent allowance re troactive to Jan. 1, though retaining it until June 1976 for natural gas sold under federal price regulations, or until the controlled price was raised McKenzie-Baldwin BUSINESS COLLEGE Inquire About Our Terms Starting Jan. 8, 1979 Phone 822-6423 or 822-2368 a 3 caif' te. „ _TORAGE I U - LOCK - IT ■ 10 x 20 - $25 693-2339 i AGGIE RING DIAMOND 10 point, full cut . $' 00 just 85 The perfect Christmas gift! 'W diamond brokers international, inc. 693-1647 693-1658 In the George Green Bldg. Make This an Aggie Christmas . . . BOOKS • Twelfth Man Aggies • Aggie Joke Books Vol. 1 thru 5. FOR THE MEN • Ties • Cuff Links • Tie Bar • Tie Tac • Pewter Mugs FOR THE LADIES • Bikini Panties • Aggie Garters • Aggie Earrings • Charms • Necklace • Pins FOR THE WEE AGGIE • Aggie Diaper • Aggie Bib • Aggie Plastic Diapers • Aggie Booties • Aggie Mittens g!mmiimimiiiimiimiiiimiimiiiiiimmimiiiiiimiiiiiiiiiiiimiiimiiiiiiiimimiiiiiiiiiiimi!iiiiiiiiiiiiiiiiiiiiiiiiiiMiiiiiiiiiiiMiiiiiiiiiiiiiiiii^ University Book Stores NORTHGATE 409 UNIVERSITY DR. CULPEPPER PLAZA NEXT TO 3C-BBQ SIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIHIIIIIIIHIHIIIIIIIIIIIIIIIIIIIIIIIIIIIIIHIIIIIIIMIIIIIIIIIIIII | ll | llllllllllll | llllllllllllllllllllllllll | llllfi i ? Open ’til 8 through Finals to take into account the repeal of the allowance. The change raised oil industry taxes an estimated $2 billion per year immediately. “The removal of the oil depletion allowance probably was the most dis incentive action taken by Congress,” said Railroad Commissioner John Poerner. “From 1902 to 1974 the United States led the world in oil production (and Texas led the U.S.) but that year (and every year since) we took second seat to the USSR. The decline in exploration had far- reaching results. “The number of rigs running de creased each year because those in volved in gambling on finding addi tional oil and gas did not see any way to make a profit on their gamble,” said Jim Nugent, the third commis sioner. “They simply put their exploration money into the bank or some other investment and only now, and I’m speaking of the last three months, do we find an upsurge in the number of rigs that are running and the number of people who are willing to gamble their money on exploration. The be nefit from this renewed activity can’t be judged for at least another year. The end of the decades-long era of plentiful natural gas sent Texas pow er generating companies scrambling for short-and long-term solutions to the supply dilemma. Some, notably in North Texas, fared better than others, notably in Central Texas. “Texas had a strong natural gas fuel base as far as utilities were con cerned that enabled them to post pone the need to develop alternate fuels longer than other parts of the country,” said Dick Ramsey of Texas Utilities, a holding company for Dal las Power & Light, Texas Power & Light and Texas Electric Service that serves 4 million persons. Every electric company in the state fueled its boilers with natural gas in 1970. The largest companies saw nuclear energy as an integral part of the mix of the future, but one that could not be added overnight. The interim solution demanded uti lization of something other than natural gas. That something was and is coal and it is difficult to imagine the degree to which Texas Utilities cornered the market. Within 200 feet of the surface of a broad belt of Texas terrain lies an estimated 12.2 billion tons of lignite, a low grade coal that was popular until natural gas became the state’s fuel of record after World War II. “If you took the total energy pro duced in Texas in those (post-war) years, it would be 99 percent natural gas and oil (generated) and lignite was just no factor,” said Ramsey. But Texas Utilities never forgot its earlier experiences with lignite. “You’ve got to have a substantial amount in one area to support a pow er plant for 30-40 years,” Ramsey said. “Those are the kinds of deposits we pursued 30-40 years ago. There’s no question we got some of the bet ter deposits in the state because no body was interested at the time.” SEASON’S GREETINGS! from SXHXS CXXXCXXSN SALOON 307 University Drive College Station A BRAZOS VALLEY INSTITUTION For an enjoyable meal with family and friends AN AGGIE FAVORITE 1803 Texas Ave. Bryan SUPER GUITARS, | SUPER LOW PRICES $ ALVAREZ MAHOGANY SUPER JUMBO NO. 5052 $ Sun Theatres 333 University 84C The only movie in town Double-Feature Every Week 10 a.m.-2 a.m. Sun.-Thurs. lO a.m.-3 a.m. F^i.-Sat. No one under 18 Ladies Discount With This Coupon BOOK STORE & 25c PEEP SHOWS 846-980? Reg. 310.00 Sale 229 00 I , The Locker Roo Special group of warmups 20% OFF M Special rack mens and ladies tennis apparel 60% off 800 Villa Maria across from Manor East MODEL 5014 ALVAREZ A good all purpose guitar with well balanced tone. One piece back and side or rare Oboncol mahogany. Top is white spruce with herringbone inlay around sound hole. Celluloid bound top and back. Nato mahogany neck has adjust able rod with "U" channel; speed satin finish for greater playing ease. Fingerboard is rosewood. Jacaranda-faced head-piece, individual, chrome, covered machine heads. This jumbo-bodied guitar delivers the extra vol ume needed to penetrate when playing with a group! The select spruce top has a hand blended golden brown sunburst finish, with celluloid in laid rings around the sound hole, and ivory bound edges. The back and sides are Nato ma hogany with wood inlaid center strip. Fancy inlaid rosewood, ox yoke, adjustable iT bridge; decorative pearl inlaid pick guard. Slim, u fast-action mahogany neck has adjustable rod set tj in "U" channel reinforcement. Rosewood finger- board has pearloid sunrise position markers. Machine heads are individually covered, with hefty chrome buttons for easier tuning. “ ' Reg. 199.00 Sale 139 00 Layaway Monthly Terms KEyboARcl Center MANOR EAST MALL BRYAN, TEXAS AFTER Brenda Latnum I lost 52 lbs. with H.M.C. program. 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