In connection with its action on this report the Council noted the statement
by the Deputy Secretary of Defense that he did not wish his approval of
NSC 97/1 to mean the establishment of a
specific priority for the petroleum program in relation to all other defense
programs, pending more detailed examination of the program.
The report as amended was subsequently submitted to the President for
consideration. The President has this date approved the Interim
Recommendations contained herein and directs their implementation by all
appropriate executive departments and agencies of the U.S. Government under
the coordination of the Director of Defense Mobilization.
[Enclosure]
Interim Report by the National Security Council on
a National Petroleum Program
the problem
1. To indicate the current status of the project for development of a
national petroleum program and to recommend interim policies for early
implementation pending further study.
analysis
Section 1: Background
2. At the direction of the President, the proposal by the Acting
Secretary of Defense on December 27, 1950, relating to a national
petroleum program was referred to the Director of Defense Mobilization
for the development of a program which would lead to the complete supply
of allied requirements (NSC 97).11 At the request
of the Director of Defense Mobilization a report on “World-Wide Demand
and Supply of Petroleum in Event of a Major War,” dated July 20, 1951,
together with a “Tanker Transportation Supplement” dated September 25,
1951,12 was
prepared by the Petroleum Administrator for Defense (PAD) for use in the development of a
national petroleum program under NSC
97.
3. The general conclusions reached in the PAD Report as to the petroleum situation in a major war
commencing in mid–1952 (based on the assumptions set forth in the PAD Report and described in paragraph 5
below) may be summarized as follows:13
[Page 980]
-
a.
- Substantial shortages of crude oil or refining capacity or
both, and of transportation, will occur in all of the three war
cases studied,* during the first six months of a war as the result
of:14
- (1)
- Loss of areas whose crude oil and refineries are now
available to the United States and its Allies.
- (2)
- Severe losses of producing, refining and distribution
facilities as a result of sabotage and enemy action in
the areas retained.
- (3)
- Large increases in military requirements.
- (4)
- The time required to establish and make effective a
drastic civilian rationing and conversion
program.
- (5)
- Loss of tankers and tanker efficiency.
-
b.
- It will be impossible for the petroleum industry to fuel an
all out war during the first six months unless these shortages
can be substantially reduced by drastic rationing at the outset
of a war, stockpiling, producing crude above maximum efficient
rate of production and by reducing losses from sabotage and
enemy action. In addition to these steps a substantial refinery
construction program will have to be initiated immediately.15
-
c.
- If petroleum supply and demand can be brought into reasonable
balance during the first six months of a war, which is the
period of greatest shortages, the problems thereafter can be
solved.
4. Some further observations based on a study of the PAD Report by the Office of Defense
Mobilization are pertinent in this connection. Petroleum supply and
requirements for an all-out war vary by time factors: i.e., until
hostilities commence civilian demand is estimated to increase at around
its normal rate of five per cent per year. (After
[Page 981]
hostilities commence, civilian demand is
estimated to be held down to rationed amounts.) Therefore, until
hostilities begin, production, refining capacity and so forth, must
expand five per cent each year merely to keep even with ordinary
requirements. To achieve some excess capacity as a cushion for meeting
military demands on a full mobilization basis, expansion must outrun the
increase in civilian demand. Industry obviously cannot afford to build
very much capacity that will be surplus for long. Neither can Government
on a limited mobilization basis afford to build and “mothball” extensive
refining capacity and its attendant facilities. Even if it could, there
would be a time lag of weeks or months to cover assembling a crew,
putting equipment into operating condition and so on, before production
would be available. Storage of petroleum products in advance of sudden
need is feasible only to a limited extent. Most products deteriorate,
and the cost of building storage facilities and carrying large
inventories is high. Of necessity, then, petroleum products for war use
must largely come from civilian rationing.
5. The PAD Report had to be based on
certain assumptions. The Department of Defense supplied a list of its
requirements for various petroleum products as of different dates,
assuming hostilities would begin July 1, 1952. The Department of Defense
also supplied factors for loss of facilities through sabotage, enemy
action, tanker sinkings, etc., which varied with the progress of the
war. PAD made a series of estimates of
what would have to be done in production, refining and transportation to
attempt to meet the requirements as set by the military services and
essential civilian needs. The PAD Report
assumed that adequate steel and manpower would be available and highest
priorities would be given. It is apparent from a study of this report
that even if unlimited steel were available now and the PAD program initiated immediately, the rate
of production called for after the first six months period under the
military assumptions could not possibly be met by January 1, 1953, or
for a year or more thereafter, as there are limiting factors of
feasibilities in the making of equipment, engineering, construction
crews, possible component shortages, etc. The severest draft on Supplies
is made in the first six months after July 1, 1952 and could not be met
by a far wider margin (the figures would run as high as 1,300,000
barrels of crude a day short and a deficiency of 1,750,000 barrels of
refining capacity, assuming the loss of the Middle East and the Far
East—the worst assumptions of the PAD
Report). It is the magnitude of this sudden first six month’s hump in
requirements that it would be almost impossible to meet in full. The
hump is caused by very heavy loss assumptions by the military services
to cover sabotage enemy action, tanker sinkings, etc. In addition to
this, military estimates call for enough material to fill the supply
lines as well as for current consumption. Even granted that
[Page 982]
the material could be supplied
in the quantities requested, there is grave doubt that it could be
transported and landed in storage facilities near the scene of action as
promptly and at the rate the first six months’ figures indicate.
However, a number of steps can be taken to reduce this first six month’s
deficit.
6. The Senior NSC Staff and the
departments and agencies concerned have considered the steps recommended
in the PAD Report to improve the
petroleum situation. As a result:
-
a.
- Action has already been taken or is under way by the
responsible departments or agencies on a number of
problems.
-
b.
- Other problems are being subjected to further study before
additional action is taken or recommended.
-
c.
- With respect to still other problems, it appears desirable at
this time to recommend certain interim measures for early
implementation pending further study from which more definitive
recommendations could be expected to develop.
Section 2: Action Under Way or Under Study
7. Actions already taken or under way include the following:
-
a.
- The Office of Defense Mobilization has prepared a civilian oil
rationing program and has initiated some of the preparatory
steps that would enable the program to be placed in effect at
the earliest practicable moment in the event of an
emergency.
-
b.
- The Department of State is taking steps to establish an oil
planning group in NATO which will study the essential civilian
requirements of NATO countries as a basis for allocations and
Rationing in case the need arises. The Department of State is
also planning on a selective basis, direct approaches to certain
Latin American countries for the same purpose.16
-
c.
- In the design of military equipment and in military plans for
expanding petroleum-consuming equipment, the Department of
Defense on a continuing basis is giving consideration to the
availability of specific petroleum products.
-
d.
- In order to meet wartime requirements, changes in the
proportions of products refined from a barrel of crude oil would
have to be made promptly. The yield of residual fuel (the
lowest-priced major product) would increase substantially at the
expense of gasoline (the highest-priced major product) and
middle distillates. Unless the prices of petroleum products are
promptly adjusted to reflect this change in yields the refiners
would not be able without financial loss to alter their yields
to produce the desired wartime requirements. To assure that
petroleum products are available in the quantities desired the
Office of Price Stabilization will make a preliminary study
covering price adjustments that might have to be made for
petroleum products. The Petroleum Administration for Defense
will supply the Office of
[Page 983]
Price Stabilization with basic data now
being prepared on the probable changes in refinery yields during
wartime.
8. Problems being subjected to further study before additional action is
taken or recommended include:
-
a.
- The Senior NSC Staff is
preparing a report on the Eastern Mediterranean and Middle East
in connection with which it is weighing the possibilities of
holding the Middle East area in the light of all relevant
factors, including the importance of Middle East oil.17 The
PAD report indicates that a
major factor in determining the allied petroleum position in the
event of war is whether it is feasible to assure the continued
availability of oil from Saudi Arabia, Bahrein, Qatar, and
Indonesia.18 In this
connection, the Department of Defense is studying the cost of
the military effort in terms of feasibility, time and material,
and the forces required, to ensure the continued availability of
oil from the Saudi Arabia–Bahrein–Qatar area, and the Office of
Defense Mobilization is studying the economic cost in terms of
feasibility, time and material required to offset the loss of
oil from that area.
-
b.
- The Department of State and the Central Intelligence Agency
are studying measures that could be taken to counter and reduce
the sabotage of oil installations abroad. As part of a wider
study concerned with the establishment of effective security
programs in critical U.S. industries, the Industry Evaluation
Board and the Facilities Protection Board are studying measures
that could be taken to counter and reduce sabotage in the
petroleum industry in the United States.
-
c.
- The Department of the Army has been charged with preparing
plans for the rehabilitation and operation of certain Middle
East petroleum facilities during military occupation. These
plans are being worked out in close cooperation with interested
U.S. oil companies and provide for Army logistical support for
teams of oil company technicians engaged in such projects. Such
plans do not apply to Iran and Iraq where the UK has primary
interest. The Department of State is studying the possibilities
of organizing and placing in a state of readiness in other
important refining and producing centers abroad reconstruction
teams designed to place oil facilities abroad which may sustain
damage back in operation in the shortest possible time.
-
d.
- The Office of Defense Mobilization is studying the
possibilities of diverting new refining construction from unsafe
to safer areas. A preliminary report made to the Senior NSC Staff on this subject as it
relates to Western Europe emphasizes the difficulties involved
in such diversion. In the light of this preliminary report,
further study of this problem appears desirable, including an
analysis by the Department of State of the foreign political
implications involved.
[Page 984]
Section 3: Possible Additional Interim Measures
9. Problems on which interim recommendations may be made now for early
implementation pending further study include:
-
a.
- The possibilities of reducing initial wartime lifting of oil
and stockpiling oil (studied by the Department of Defense and
the Office of Defense Mobilization).
-
b.
- Further expansion of crude oil production, refining capacity,
storage space, oil transportation facilities, etc., including
material and other assistance, especially an increase in the
availability of steel and other critical materials for such
expansion (studied by the Office of Defense
Mobilization).
-
c.
- Placing the Elk Hills Naval Reserve in a state of readiness
(studied by the Department of Defense).
-
d.
- Arranging for resumption of full-scale production and
development in the tidelands oil fields.
Possible interim actions with respect to these matters
are discussed in the following paragraphs.
10. It should first be noted, however, that the construction and drilling
program that would be required to meet or come fairly close to
satisfying the given military and essential civilian requirements would
have to be a full mobilization program, and even with pressure and with
all priority assistance possible, it could not meet the requirements on
the dates used in the PAD Report. At
present, governmental policy is one of limited mobilization. However, as
petroleum is such an important item, both to military operations and to
sustaining the civilian economy and productive ability during a war,
there is justification for pushing the petroleum program further and
faster than the partial mobilization basis on which it has been
functioning. (This has been done in the case of aluminum, for instance.)
The ODM, therefore, is working on a
program that would not unduly upset the balance of the rest of the
mobilization effort now underway, both civilian and military, and which
would be based on the principle of as large a program as is compatible
with the materials which could be allocated to it for a period of one
and a half to two years, beginning July 1, 1952, and the principle that
the petroleum industry would be willing to finance itself (except for a
tanker problem to be mentioned later) with no aid from the Government
except some accelerated tax amortization. All these actions would be
steps toward what would have to be done in the event of full
mobilization, and once the question of steel and material have been
settled, could be put into operation as regards the earlier phases of
financing, engineering, construction work, etc., between now and the
time when the material would become available during the second half of
1952.
Stockpiling and Storage
11. Previously established military policy on Mobilization Reserve Stocks
of petroleum products, requires that the three services establish
[Page 985]
and maintain on hand
quantities of reserve stocks of petroleum products located in accordance
with emergency war plans and adequate for 75 days consumption at wartime
rates. These are in addition to peacetime operating and safety level
stocks. The establishment of 75 days requirements as the quantity of
petroleum stocks to be stored was the result of evaluation by the
Munitions Board Joint Petroleum Committee, assisted by industry, of the
degree of industry’s inability to deliver greatly increased quantities
of military specification products during the early period of an
emergency.
12. Mobilization Reserve Stocks are not considered adequate for the
support of all active forces, however, until they are actually at such
locations that their timely delivery to the military forces is within
delivery capabilities. While emergency war plans permit a certain amount
of overseas storage, it is a practical impossibility to establish stocks
adequate to match all of the probable intentions of a probable enemy.
This introduces the factor of delivery capability considered in the
light of probable enemy action. The Munitions Board Joint Petroleum
Committee and the Petroleum Administration for Defense have the joint
responsibility for the development of the probable phased production and
deliveries of petroleum products during the early days of a war
emergency. Up to the present time adequate intelligence on which to base
assessments of probable enemy damage to our industrial plants and to our
transportation system has not been available, and delivery schedules
based on realistic war conditions have not been developed.
13. Current military policy with respect to Mobilization Reserve Stock
and the steps being taken to implement it, despite some deficits, are
considered to be realistic and practical. However, in connection with
this problem it has been proposed that additional storage capacity be
constructed beyond presently available and programmed tankage
requirements, as one means of attempting to mitigate the difficulty of
meeting the extremely high first six months requirements of total
mobilization. The PAD Report suggested
25 million barrels additional storage for industry and 20 million
barrels for the military.
14. Two problems are involved: getting the storage built and getting it
filled under the present rather tight balance between supply and demand.
As regards the oil industry, part of the storage should not be filled.
When D-Day comes, and early civilian rationing starts, it should take
effect first along the Atlantic Coast on the assumption that the
military requirements would be shipped from Atlantic or Gulf ports.
Nothing would be gained by starting rationing in District 2 (Middle
West) on the same date unless the products saved by the rationing could
be immediately moved to the East Coast to fill in the gap left by
military liftings. This shift cannot be made overnight. It involves
trading changes in imports going into District 2 from other
[Page 986]
Districts, converting crude
lines or gas lines to product lines, changing barge movements, changing
refinery runs, etc. To do this, without having to cut back refinery
production requires tankage. The oil industry, if steel were available,
might with some tax amortization assistance, build 80,000,000 barrels of
tankage, to take care of new refinery construction and ordinary run of
business. The present rate of tank building is about half of this. This
need should be filled before building the additional 45,000,000 barrels
recommended for cushioning the first six months’ needs.
15. The military services have never had sufficient storage of their own
to meet their requirements, and have therefore leased tank space in oil
company terminals. If it were necessary in the future for the military
services to lease additional tankage, a serious situation would be
created, since available industry tankage has been insufficient to meet
industry requirements recently. Not all products could be stored
successfully for a long time because of deterioration. Navy Special Fuel
and Avgas (Avgas may be stored with reasonable safety for up to two
years) however, could be stored with very little deterioration, and are
the two products for which the demand immediately increases on D-Day.
The transportation problem would be simpler if the refineries along the
Coast could supply all the Navy Special and Avgas requirements. They
have not the capacity, however, and inland and Caribbean refineries will
have to make up the deficit. This poses a difficult transportation
problem. In World War II, Navy Special and Avgas were moved from the
interior in tank cars, an expensive method, requiring time to organize
and bringing up questions as to how the supply of tank cars should be
proportioned between Navy Special, aviation gas and other urgent
requirements. The Congress has just authorized another $750 million for
stockpile purposes.19 Whether building tankage and
stocking Navy Special and Avgas could be considered a stockpile item
over and beyond present approved military stock levels should be
investigated. In any event, it would seem that building additional
tankage and stocking it with Navy Special and Avgas would be a proper
expenditure to be made by the Defense Department or the stockpile, when
steel for this could be made available without holding back more
important phases of the petroleum program.
Production
16. As the crude availability figures forecast by PAD are based on historical experience of drilling results
over reasonably long periods, if the earlier years of the drilling
program were below average, then the shortage of crude might be quite
serious. Refineries, pipelines and tankers can be built within fairly
definite time limits. This is not the case in expanding crude production
where it may take from 3 to 5
[Page 987]
years to drill up a new field. Enough steel, therefore, should be
allowed for an expanded drilling program to be prosecuted now, so as to
provide for lead time of production and possible variations from the
averages as forecast. This would mean that eventually a reasonable
amount of “shut in” potential production would be accumulated as a
cushion.
Refining
17. The present approved refinery construction program calls for building
domestic refineries at the rate of one million barrels in three years.
This amount of construction would barely keep up with the increase
expected in civilian requirements, let alone providing some extra
capacity for expansion to meet full mobilization requirements. To the
extent steel can be made available without seriously dislocating more
essential defense and approved civilian programs, a schedule of refinery
construction, up to the capacity which the industry is willing to build
of its own accord, should be approved, to be phased in as the
construction now under way in the present program nears completion. It
is hoped that reasonable amounts of steel could be made available for
such a program beginning early in the third quarter of next year. The
time between the certification of such a program and the time when steel
in quantities could be obtained would be required for financing,
engineering, placing of orders, foundation work, etc. The refineries
built by the industry under this program would undoubtedly be regular,
all-purpose refining units, capable of producing the usual peacetime
line of products but not especially designed for turning out increased
quantities of Navy Special Fuel and Avgas, for instance, as contemplated
in part of the refinery construction program envisaged in the PAD Report. To this extent, they might not
all be ideally suited to meeting military full-mobilization
requirements. However, they would be able to fill a great many of them
and contribute likewise to keeping the civilian economy on wheels. The
industry would build the refineries with its own funds, with nothing
more than some tax amortization assistance and the assurance of the
necessary steel, etc. The capacity so built would probably be somewhat
in excess of the actual capacity needed to meet the foreseen increase in
peacetime requirements. Apparently, the industry is willing to build
ahead somewhat on their own financing. Over a period of a few years, the
refineries so built would almost certainly find a place in the economy,
even if all threat of war were removed, for the civilian demand in the
U.S. alone has been increasing at over 5 per cent per annum. It,
therefore, requires increasing the industry’s capacity in production,
refining transportation and marketing by 10 per cent or more every two
years just to stay even with civilian demand. Any other program
providing more than a reasonable cushion above rising demands would
probably require
[Page 988]
Government
financial aid, particularly for special refining units adapted
principally to making Navy Special Fuel and Avgas.
Transportation
18. The Petroleum Administration for Defense has also studied the
petroleum transportation situation. Under the assumptions given for
sinkings, convoy delays, etc., it appears that the world tanker fleet
would have to be increased 50 per cent in carrying capacity to meet the
requirements set forth. It is true that not all of this would have to be
in tankers, because some vessels in the coastal trade could be replaced
by product pipelines. Further study of this problem is under way by
PAD transportation experts. However,
it is certain that a large number of tankers would be required even if
the number was diminished in part by the building of pipelines, in part
by changes in convoy practices, and in part by changed estimates of
sinkings. It is understood that the tanker type best suited to meet war
conditions would be a 20,000 ton vessel capable of 20 knots and carrying
in the neighborhood of 170,000 barrels (cubic measure) of products. Such
a ship could run with little or no convoy assistance. While industry
might be encouraged to build a few of these fast ships, if a portion of
the cost was borne in some way by the Government, the type of tanker
industry apparently favor for long hauls now is 30,000 ton vessel
cruising at 16½ to I7½ knots. If enough of these were built, they could
perhaps be handled in a fast convoy group of their own. A study of the
tanker situation including convoy routes and practices should be
undertaken by the Maritime Administration, with the assistance of PAD, the Navy, and the oil industry. This
study should include an investigation of large ship construction
facilities in the U.S. and abroad.
19. In the oil industry today the tanker is in port either for loading or
discharging considerably less than 24 hours. The figures for port time
under convoy conditions assumed in the PAD Report run from a week to 9 days for port time loading
and discharging. Presumably, this delay occurs because of vessels
arriving in convoy having to take their turns at loading or discharging,
waiting for the convoy to assemble and so forth. However, some time
could be saved if all loading and receiving terminals, both here and
abroad, were equipped with large enough dock lines, manifolds and tank
vents to permit loading or unloading tankers at modern industrial rates.
The military services should see that this is done, insofar as possible,
at all their installations and those which they may have under their
jurisdiction here and abroad. PAD could
use its best offices to see that industry is urged to do the same.
20. From the above, it is quite evident that the transportation division
of a balanced petroleum plan has many complications. In fact, it
probably cannot and should not be kept in balance with production and
refining. To do this might call for the building of some
[Page 989]
very costly pipelines in such locations
that they would have little economic value in peace time, and building a
fleet of several hundred tankers which again would not be needed under
conditions of peace. The demand for petroleum, on the other hand, would
catch up with any reasonable amount of increase in production and
refinery capacity presently under consideration.
Elk Hills
21. Present plans for putting the Elk Hills Naval Reserve into full
production are predicated on having at least six months in which to make
necessary preparations, including obtaining personnel and facilities. In
order to place Elk Hills in a state of instant readiness so that it can
be producing at capacity at the start of a war, it will be necessary to
take the following steps:
-
a.
- Double the rate of drilling new wells.
-
b.
- Expand pipeline, storage and other commercial facilities in
the area.
-
c.
- Construct housing facilities for the naval personnel
required.
-
d.
- Maintain identification of qualified personnel who are subject
to military orders on D-day for assignment to Elk Hills.
-
e.
- Effect legislation modifying present law (1) to allow
production from the Elk Hills field by immediate administrative
action without a joint resolution of Congress and (2) allow
disposal of the products of the field by allocation and
negotiation upon the start of a war in lieu of the complex
process now required.
22. Doubling the present drilling rate will require earlier availability
of, but no additional steel. However, to continue the drilling program
toward the maximum requires consideration of the impact in dollar and
steel cost. In considering the construction of housing and messing
facilities, and changing present mobilization plans regarding personnel
for Elk Hills, it would be pointless to add to an already complex
over-all mobilization plan without carrying out the construction to
justify it. While present plans are based on a six month period of
preparation for production, it is believed that a lesser time in the
order of four months can be realized in the face of an urgent situation,
by present mobilization plans and the provision of temporary housing or
shelter, and the elimination of delaying legal processes. Hence the most
practicable course at the present time appears to be to double the
drilling rate, expand oil facilities in the area and modify existing
law.
The Tidelands Oil Fields
23. A program of full-scale production and development in the tide-lands
oil fields of California, Louisiana and Texas would make a substantial
contribution toward relieving the petroleum shortage. At present,
however, full-scale operations are prevented by the uncertainties
stemming from the legal position of the tidelands areas. As a result of
Supreme Court decisions in 1947 (California) and 1950,
[Page 990]
(Louisiana and Texas) action by the
Congress is required for definitive settlement of the question of
ownership of the oil resources in the tide-lands fields.20
Pending such settlement, the drilling operations under way at the time
of the Court decisions are being continued on a temporary basis, a
situation which does not encourage full production from existing wells
and which effectively prevents exploration, development or new
operations. In the light of the over-all petroleum situation it is in
the interests of national security to establish some type of arrangement
which would permit the resumption of full-scale production and
development in the tidelands oil areas pending final disposition of the
tidelands problem by the Congress.
Other Preparatory Steps
24. The effectiveness of the Petroleum Administration for Defense as now
set up should be augmented by more aid and advice from the grass roots
of the industry through organizations needed by PAD to solve problems arising currently in local areas. It
is urged that a workable agreement between the Justice and Interior
Departments be reached in the near future in order to accomplish this
objective. While additional assistance of this character would be
helpful to the Petroleum Administration for Defense under limited
mobilization, under full mobilization it would be absolutely
essential.21
25. The above highlights the steps which could be taken in the immediate
future. The full extent of the program will not be known until there has
been time to review steel requirements and balance the need of petroleum
expansion against other present needs, both military and civilian and to
ascertain how far industry will go unaided by Government. After this has
been done, PAD should be in a position
to make a revised estimate for the military of the petroleum products
which would be available at given dates in the next two and one-half
years on the basis of this program being followed. A continuing study
[Page 991]
of the petroleum situation
should be made by PAD in conjunction
with the military, and changes made as and when conditions warrant.
26. In summary, the petroleum program as now established barely meets
expected increases in peacetime demand and cannot support the war
demands contemplated in the PAD report.
Certain recommendations and proposed actions noted above will alleviate
the situation to some extent. However, if conditions alter to the extent
of changing from a policy of limited mobilization to a more advanced
state, by disregarding the disruptive effect upon the civilian economy,
further measures could be taken to increase the petroleum supply.
interim recommendations
27. In view of the importance of petroleum to national security the
current petroleum program should be expanded and accelerated beyond the
limits presently imposed on the mobilization program as a whole by the
principle of partial mobilization. The program should not unduly upset
the balance of the rest of the current mobilization effort, but should
be as large as is compatible with the materials that could be allocated
to it for a two-year period beginning in mid-1952. Preparatory action
should begin immediately.
28. The national security interest requires the resumption of full-scale
production and development in the tidelands oil fields, if necessary
under temporary arrangements pending final action by the Congress.
29. Sufficient steel should be allocated for an expanded program of
petroleum drilling to be prosecuted as rapidly as availabilities
permit.
30. To the extent steel can be made available without seriously
dislocating more essential defense and civilian programs, a schedule of
refinery construction, up to the capacity which the industry is willing
to build of its own accord, should be approved, to be phased in as the
construction now under way in the present program nears completion.
31. When steel can be made available, the oil industry should be
encouraged to double the present rate of construction of industrial tank
storage capacity. When steel can be available without retarding more
important phases of the petroleum program, additional military tank
storage capacity should be constructed and stocked by the use of
stockpile or military funds.
32. Petroleum port facilities under military control here and abroad
should in so far as possible be provided with equipment which would
permit loading and unloading of tankers at modern industrial rates.
Industry should be encouraged to provide similar equipment for
industrial port facilities. Immediate consideration should be given to
providing government assistance to industry in the construction of a
limited number of fast tankers and to encouraging industry to build a
larger number of intermediate-speed tankers.
[Page 992]
33. In order to increase the readiness of the Elk Hills Naval Reserve:
-
a.
- The presently planned drilling program should be continued at
double rate.
-
b.
- Gathering lines and tanks for the new wells should be
provided.
-
c.
- The development of commercial facilities in the area to assure
use of the products of the field should be encouraged and
supported.
-
d.
- Recommendations to Congress should be initiated to simplify
the legal action required for putting the field into
production.
34. In order to receive assistance and advice from the industry, a
workable agreement between the Departments of Justice and Interior
should be attained in the near future concerning any problems which are
involved.22
