Evening star., 1944-04-23
Near East Oil Pot B0iLs
Fabulous SaudAraba Field Center of Bitter Controversy

No controversy of World War II has
swung to such frenzied extremes as the
battle OF petroleum. Alarmists cry out
that once upon a day, some Ia years
hence, American industry will run down
and the Nations trucks and automo-
biles will stall on the highways, because
there will be no more domestic fuel Oil
and gasoline.
To which is opposed stormy counter
claim that if drilling machinery and
manpower were released, and the price
of crude were advanced from $118 to
$1.68 or even $153 q barrel, the land
would presently flow with new gushers
as opulent as those Of the bonanza
1924-1934 decade.
The need for a dispassionate and fac
tual survey of the world petroleum scene
has been driven home by the incident
of the Saudi-Arabian pipeline, over
which debate mounted to berserk fury.
On February 6 the terms of an agree
ment in principle were announced be-
tween the Arabian American Oil Co.
and the Petroleum Reserves Corp, the
president of which is Harold L. Ickes,
Secretary of the Interior and adminis-
traitor of the Petroleum Administration
for War.
About year ago PRO came into being
as a hush-hush subsidiary of the Re-
construction Finance Corp. The new
agency rejoices in charter empowering
it to acquire" foreign oil properties.
Far from seeking ownership In King
Ibn Saud's desert petroleum, Ickes had
renounced an earlier plan under which
the Government would have become
Junior partner in proposed refinery on
the Persian Gulf
1,200-Mile Pipeline.
AS amended, the program was limited
to Federal construction, financing and
ownership Of pipeline 1000 miles long,
for the purpose of carrying American
controlled oil from Bahrein Island,
Saudi Arabia and Kuwait to the East
ern Mediterranean seaboard. Thus the
product would escape the cost, time and
shipping space required for circumnavi-
eating the Arabian Peninsula, voyage
equivalent to crossing the Atlantic, and
would also evade the round-trip tanker
toll of 18 cents barrel which is exacted
by the British for use of the Suez Canal.
This charge is defended on the ground
that it defrays the canals upkeep and
operation and provides certain revenues
for the Egyptian government.
The undertaking had a triple goal.
Should the European war continue two
years longer, the pipeline would furnish
energy in that region for American
forces, land, sea and air. It the war in
Europe came to an end by 1916, oil from
the Middle East would be available for
relieving the drain on American domes-
tic resources. Finally, against q third
world war. which no statesman can
reject as impossible, the United States
would be able to amass from Persian
Cult sources reserve stocks of petroleum
such as carried Germany and italy
through the first years of the present
conflict.
Clauses were inserted providing for
the amortization of the cost, estimated
at between Sl10, 900 900 and $165, 900 900,
over period of as years.. Operation of
the pipeline was intrusted to private
enterprise. The directors Of PRO, which
sponsored the project, are the Secre-
taries Of State, War and the Navy; the
petroleum war administrator and the
administrator of the Foreign Economic
Administration. In addition, it bore the
approval Of the White House, the joint
Chiefs of Staff and the Navy
Petroleum Board
Ickes Under Attack.
Rather ungratefully, since Ickes for
two years had zealously carried the ball
in behalf Of the oil companies, he had
no sooner disclosed the agreement than
he was attacked by industry spokesmen
as both Fascist" and Socialist" if
not a Communist" He was threatened
with impeachment. Senator Edward A.
Moore (Republican, Oklahoma, himself
a former oil operator, was the prime
mover in a joint resolution to liquidate
PRO, and in Senate resolution to
formulate foreign oil policy, with a
full dress investigation of the Saudi
Arabian pipeline. On the other hand,
liberals such as Representative jerry
Voorhis of California professed to catch
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