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Domestic Oil Industry Group Softens Stiff Opposition to a Fee on Imports

November 11, 1986|DONALD WOUTAT | Times Staff Writer

HOUSTON — Oil industry leaders, voicing rising alarm over imported petroleum, lifted their longstanding opposition to an oil import fee on Monday and said instead that "no option . . . should be ruled out" in shoring up the nation's domestic oil supplies.

But industry executives said the American Petroleum Institute, influential lobbying arm for 200 big oil companies, remained sharply split on the controversial import fee issue and conceded that there remains little support for it in Washington.

They were reminded of that by White House budget director James C. Miller III, who told the trade group at its annual meeting here that President Reagan remains opposed to a special tax on oil imports.

"Without a strong and clear position by the White House, we're beating our heads against the wall," said George Keller, chairman and chief executive of San Francisco-based Chevron and president of the trade group.

Reagan himself will be the main target of a stepped-up campaign for some form of immediate relief that would raise and then stabilize oil prices, Keller said. He added that the industry won't lean on Vice President George Bush, a former oilman, for help because his ties to the industry are "seen as a negative."

The question of an oil import fee came to the fore this year as oil prices collapsed, resulting in lower U.S. production and exploration. Imported oil, generally cheaper to produce, has filled the gap, raising the specter of renewed dependence on oil from the unstable Middle East.

A tariff on imported oil, proponents argue, would enable all producers to raise their prices. That would create an incentive to increase production and exploration for new reserves, strengthening the nation's energy security.

The new policy statement by the oil leaders makes no mention of an import fee or any other specific remedy, saying only that all avenues should be explored. Until now, despite protests by many members, the trade group has opposed an import fee out of distaste for bureaucratic headaches and increased government involvement in industry affairs.

The shift in thinking represents a victory for such industry leaders as Fred L. Hartley, the outspoken chairman of Los Angeles-based Unocal and a longtime advocate of an import fee as the only way to combat the policies of the Organization of Petroleum Exporting Countries, which triggered the price collapse.

The industry's deep internal divisions on what to do about the oil price collapse has undermined its effort to win help in Washington. The shift in position Monday is an attempt to represent a united front.

However, industry executives said there remains strong opposition--notably by Exxon, Mobil and Shell--and some scoffed at the latest shift in posture as an innocuous one that seems to make everyone happy.

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