The Plan to Nationalize the Oil Companies
It was 1976. I well remember that day when I walked into the office of Mr. X, and I remarked, "Sir, I sure have been having a good time lately rubbing shoulders with rich people. There's no need for me to travel around the world ... I can meet them all right here in Prudhoe Bay. I'm the only Chaplain around," and I chuckled, "I'm the only Chaplain that can tell people that are Moslems that Jesus Christ loved them and died for them. It's been a real privilege to tell these people that Christ died for sinners whether they come from Moslem countries, from the lower 48, or anywhere else. It's been interesting to tell them the Christian Gospel They would not come to my church service, but they still heard the fact that salvation is available to each of them individually, if they will accept the Savior whom I love and serve."
Mr. X looked at me, interested, and perhaps a little surprised that I was able to present the Gospel in that way. However, he knew me, and had come to respect me. He knew it would be quite impossible for me to meet people and not give them the "Good News" if there was half an opportunity to do so.
Mr. X himself was involved in a wonderful work—the provision of oil to a needy world. I was involved in an even more important mission—to tell of the Light of the World Who had come, to tell how the Old Testament Scriptures had foretold His death, to relate the wonderful news that despite the wickedness of man, God's plan of salvation had been wonderfully foretold. And, of course, it was my joy to tell them that I personally knew forgiveness of sins, peace with God, enjoyment of the best life, because I knew the reality of walking with the risen Christ.
I told Mr. X that it had been my privilege to tell those bankers from various parts of the world that for me to live was Christ, "to die was gain," as the apostle Paul put it. I suppose those businessmen simply tolerated my point of view, but it was a real privilege to notice that they accepted me and respected my point of view. Sometimes they even listened very seriously to the wonderful news I had for them. After all, the gospel of Jesus Christ is the greatest news ever given to man.
I remember that Mr. X kind of laughed as he listened to me, and then he commented, "Well, Chaplain, where else could you get an audience like that—where else could you go in all the world to get people to listen to the gospel message in the way you presented it to these men?"
I said to him, "Sir, thank you for making it all possible. I really appreciate you letting me rub shoulders with these guys." Then I said to him, "By the way, Mr. X, why is it that all these men are up here at Prudhoe Bay all of a sudden? I used to see men like them now and then—they came through periodically, but lately we've had a flood of the biggest men in the world as far as financing is concerned."
Mr. X got up from his desk and at first was somewhat cautious. The smile disappeared from his face, and it was replaced by a frown. He closed his office door, then with a very sad look on his face, he said, "Chaplain, Atlantic Richfield has just completed the transaction of borrowing the worth of the company."
I exclaimed, "That's bankruptcy!"
He did not like the word "bankruptcy" but he remarked in his own way that was just about the size of what was happening. I had commented that it was financial suicide, and he acknowledged that was what was taking place.
At that point Mr. X and I talked again about the conversation he had with Senator Chance back in 1975, when Mr. X had remarked that the government wanted to nationalize the oil companies.
As we carried on
our conversation that day in 1976, I said to Mr. X, "You have just
completed the borrowing of the worth of the company?""Yes,
Chaplain," he answered. I looked at him and said, "But why?"
I answered, "But, sir, that is not what they tell us. They say that the oil companies are huge monsters that are robbing the people of America. As American people, we have been told that the oil companies have no need of money—that they are great wealthy barons that have more than they could ever dare dream of. Why this big struggle for survival?"
Mr. X remarked, "Chaplain, the only reason we borrowed the worth of the company was that we might complete the Trans-Alaska Oil Pipeline—and in so doing, remain solvent by the sale of the oil."
Then so many things came together in my mind. Cost overruns had caused the costs to be increased from an estimated $600,000,000 in 1971 to the actual cost of the Pipeline being $12,000,000,000. No company could stand such cost increases in just a few short years—and that applies to even the wealthy oil barons. So now Atlantic Richfield was in debt for the amount of their total corporate worth.
At this point even more things began to add up. Not only were there extreme cost overruns, but there were the false claims of faulty welding, withdrawals of permits, orders to dig up pipes. There were Union "wobblings" or "slow down" factors. "Stop the flow of oil" seemed to be the constant intent. There was the building of those $10,000 outhouses, a flotilla was frozen and allowed to be crushed by the ice, and then there were those falcons—at a million dollars each! There were also the absurd rules concerning the "precious tundra," and ridiculous Federal laws and regulations, and excessive and unwarranted fines, and more ....
Yes, it all added up now. Stop the oil! And now, one of the major oil companies of America had borrowed the worth of the company—just to survive. But the American people—surely they would be told all this? Why not ease up the restrictions, for after all there is an energy crisis, even if it was artificially induced, causing gas prices to go higher and higher all the time. Then there is the matter of interest on $12 billion dollars. Can you imagine what the interest would be on $12 billion dollars? . . . at today's interest rates that are going up all the time? This is a struggle for survival by free enterprise.
I kind of laughed within myself as I remembered that picture on the wall of one of the dorms one day. It was a picture of a little child sitting on a potty. Beside the child was a roll of toilet paper. As the child reached for a piece of toilet paper, the caption under the picture read, "The job isn't finished until the paper work is done."
Yes, there were literally rooms filled with paperwork. Companies had been hired to do nothing but manage the paperwork of records. Daily, airplanes were traveling back and forth from camps to Fairbanks and Anchorage, doing nothing but carrying men who were traveling to take care of paperwork. Almost daily some official on the Pipeline would come to me and say, "Chaplain, I'm so frustrated I hardly know where to turn, because we've been applying for that permit for weeks. They know the job has to be stopped until that permit is given. All this time my men are sitting there, doing nothing while we're waiting on the State to make surveys, and to decide a simple question of a minor permit that prior to this we had no problem whatsoever getting. In these last six months of the Pipeline these permits are taking longer and longer, going through the maze of bureaucracy. The paperwork has gotten to the point that it's momentous." It was indeed a struggle for survival. Yes, no doubt, the job isn't finished until the paperwork is done. But let me return to my conversation with Mr. X. I asked myself a question, which I then put to Mr. X: "Sir, does the United States government own the oil companies?"
I do not remember his exact words, but paraphrased it was something like this, "No. The United States government does not own the oil companies literally, but they might as well. After all, it's their land that we produce the oil from, on the North Slope of Alaska, and they might just as well have built the Trans-Alaska Pipeline—after all, we can do nothing at all without their permits. Not even to the building of a section of a haul road, or laying of a gravel pad, or the drilling of a well, or the production of so many barrels of oil a day from that well. In fact, we are told almost everything we are to do. We don't really run this job."
Does the Federal government own the oil companies of America? They tell them how many dollars they have to spend to put a smog protection device on their refineries. They tell them exactly how the ships have to be built to haul the oil to California, and to Washington, and to Oregon, after it has been taken out of the North Slope of Alaska. If all that's not enough, they even tell them the kind of paperwork they have to turn in to prove everything they are doing.
After I put my question to him about the Federal government's owning the oil companies, Mr. X said to me very sincerely, "Chaplain, they will soon. The fact is that if we don't flow that oil in time, we will go into bankruptcy."
For the first time, I had heard it with my own ears. That was it—that was really what they were after. I finally had the last piece to the puzzle, and at last the whole picture fitted together.
I heard one of the men say one day, "I work for the purpose of paying taxes." That was it. The Federal government was aiming at total control. They knew that if they could stop the flow of oil, they would bankrupt the oil companies, and there would automatically be nationalization of the oil industry. From this time on I looked even more carefully. I would talk to the men after I preached, and I realized that the whole idea, for that period of six months, was to stop the flow of oil.
At that point I
had to go back and see Mr. X again, and I did. I remembered the day
that I asked him the question, "Mr. X, is the Federal government
attempting to delay the flow of oil on the Alaska pipeline?"
I went back to my room and, if I remember the day correctly, I prayed about it all that day. This is what I came up with in the conclusion of my own mind: "There is an energy crisis in America, artificially induced, and if not, why did they close down that cross-country pipeline in Wheatland, Wyoming? (We have mentioned that in an earlier chapter.) They are trying to produce an oil crisis, and if this oil was allowed to flow on time, it would produce two million barrels of oil a day, at its maximum output. That is a great amount of the precious oil that America needs."
We have said that
bankruptcy would lead to nationalization. If the government managed
to nationalize the oil companies, that would virtually have broken the
back of private enterprise in this country.
As I rode with one oil company official today, and another tomorrow, and another the next day, I would keep asking questions. I was after the truth, and one oil company official would not know what the other had told me.
One day I rode with one of the men who was responsible for certain parts of the procedures associated with the final flow of the oil—I will not identify him any more than that (or the places we rode in his pickup truck) for I want to protect his anonymity. But I watched, and I saw something that I could hardly believe, because I had never seen this before. I will not elaborate the particular incident, for it might identify the man involved. The point is, that incident impressed on me that there was suddenly a dramatic change in the attitude of oil company officials. They had "come out fighting."
By now there were two to three months until oil flow. I had watched as the project became of immense size, and the number of men on the Slope grew day by day, with the camps all full and the job running full speed ahead. I had seen both the Federal and the State governments withdraw different permits, and literally back the oil companies into a corner where they had to fight I remember as a boy back on the farm in Georgia, if you ever backed an animal into a corner, even if he was an animal that knew he could not win—if you got him pinned up, he would fight. In those circumstances even a small animal would attack you in an effort to get away. That was exactly what was happening now with the oil companies. The government had backed them into a corner. Time was of the essence, for cost overruns had gone to such a state that interest alone would eat them up. So there was no choice—that oil had to flow, and it had to flow on time! The only way that the oil companies could survive was to flow that oil on the given date.
How did they do it? I'll tell you how they did it—the oil companies themselves can never tell you the story, so I will. By now the job had grown to such an enormous size that there weren't enough State and Federal inspectors to keep up with every aspect of the job. I watched, in that last six months of the Pipeline project, as the oil companies literally bulldogged—if I might coin that expression they literally went forward, disregarding the stringent restrictions that had been placed on them by the Federal and State governments. When they were caught, they would pay the fines, and the fines for petty offenses ran into many thousands of dollars—but most of the time they were not caught.
I could name incident
after incident, but if I did, it would be possible to identify the oil
company officials involved, and I do not want that to be one result
of this book being presented to the American people. Indeed, some of
those officials might in turn be prosecuted. For that reason I will
not record for publication specific dates. There were specific incidents
on specific dates, on many occasions when the oil companies moved forward,
disregarding the outlandish rules that had been imposed on them by the
Federal government. Those impositions were contrary to the rules that
had been agreed to when they first contracted for this project for the
Trans-Alaska Pipeline. They literally rushed madly forward in an attempt
to survive and to flow that oil on time, regardless of what it took
to do it.
They knew the welds on the big pipeline were not faulty, they knew that the tremendous increases in cost overruns had been caused by exorbitant inflation and unnecessary regimentation. They knew that the practice of withdrawing permits and the issuing of new permits was not correct, either morally or legally. They literally overran the restrictions imposed by the government, and there was nothing the government officials could do about it, because they simply could not keep up with the fast pace.
That oil was going to flow on time. I had never seen this attitude before. Such an attitude had not been there during the first two years and three months of the construction of the oil pipeline, because during that time all regulations were very stringently followed. All permits were carefully obeyed, but now it was quite to the contrary.
This great animal of private enterprise had been backed into a corner, and it was fighting for survival. That was after Atlantic Richfield had borrowed the worth of the company. I do not know what the other companies on the pipeline did, but I do know what this one did, and it was the major producer on the east side of the oil field on that one 100-square mile area from which they had been allowed to produce. So now I watched them as they literally fought for survival. They defied the government officials, because they knew it was only a matter of months and then there would be nothing more they could do about it.
I personally say at this point, "Congratulations to the oil companies." They flowed the oil on time despite a direct attempt by the Federal and State governments to stop that flow from going. It was an intentional plan to bankrupt the oil companies of America so that the oil industry could be nationalized—but they did not succeed.
I think you will agree that the incidents we have recorded make it clear that there was a very serious, concerted attempt to frustrate the oil companies and to make their costs so exorbitant that they would be forced into bankruptcy. It also seems that ultimately one of the ideas was to so discredit the oil companies in the minds of the public that they would be all too ready to allow the whole of the oil industry to be nationalized. The oil companies were to be blamed for the price of gas going up—they were to be the scapegoats, made to appear to be raking in exorbitant profits, while in fact they were being brought to the point where they were enduring a tremendous fight for survival.