Oil Imports

Report Outline
Agitation for Restriction of Oil Imports
Oil Imports and Oil and Coal Industries
Oil Imports and Interests of United States
Special Focus

Agitation for Restriction of Oil Imports

Pressure Congress to Curb Inflow of Foreign Oil

Shipment into the United States of a rapidly rising volume of petroleum from Latin America and the Middle East has brought vigorous demands for import restrictions from domestic independent oil producers and the bituminous coal industry. Imports of foreign oil, which in the prewar years 1935–39 averaged only 153,000 barrels a day, increased from 311,000 barrels daily in 1945 to 641,000 barrels daily in 1949 and climbed to 800,000 barrels daily in the first quarter of 1950. At the latter rate, the imported petroleum was supplying about 13 per cent of the oil market in the United States as against less than 4.5 per cent before the war.

Pressure for action to curb such imports became insistent last year when the inflow of foreign oil continued to mount despite a decline in domestic production, and when oil imports exceeded oil exports for the second straight year following more than a quarter-century of net oil exports. On Sept. 15, 1949, when the Senate was considering a bill to renew the Trade Agreements Act, it rejected by a margin of only one vote an amendment by Sen. Thomas (D., Okla.) to limit petroleum imports in each quarterly period to 5 per cent of the domestic demand in the corresponding period of the preceding year. In the months since the Thomas amendment failed of adoption, a dozen bills have been introduced in Congress to establish oil import quotas or to curb imports by substantially raising the rate of the excise tax collected on oil imports since 1932. Meanwhile, the question of oil imports in its various aspects has been under investigation by a number of House and Senate committees.

Complaints about the situation originated with domestic oil producers, who contended that the rising tide of imports not only was seriously affecting their business but, if continued unchecked, would discourage the new exploration and development of oil resources needed to maintain reserves adequate for the nation's expanding economy and the requirements of a war emergency. The oil producers were soon joined by both management and labor spokesmen for the bituminous coal industry, who protested that the inflow of residual fuel oil was displacing coal consumption to a substantial extent and thereby injuring the coal industry and coal-carrying railroads and causing unemployment among miners and railroad workers.