Zurich Citizens News, 1976-10-06, Page 9Jack Riddell
For many years, the people of
Ontario have been fortunate
enough to have plentiful supplies
of hydro power, fuel oil . and
gasoline, and natural gas, at
fairly reasonable prices.
Recently, however, we have
come to realize that this situation
is changing. I would like to
remind you of a few of the
developments over the past three
years.
In September 1973 the price of
oil in Canada was about $3.80 a
barrel, and the OPEC countries
quadrupled the world price. At
the Federal -Provincial Energy
Conference in March 1974 the
price of crude oil was increased
71 percent from $3.80 to $6.50 a
barrel.
On July 1, 1975, the domestic
Canadian price for crude oil
increased a further 23 percent to
$8.00, and Ottawa imposed a 45
day price freeze to give oil
refiners time to work their in-
ventories of lower-cost crude
through the marketing systems,
preventing inventory profits. The
Ontario Government, during an
election period, extended the
freeze 88 day and then 134 days.
.A Royal Commission on
Petroleum Products Pricing was
established and Commissioner
Claude Isbister was appointed to
study the relationship between
price increases and the interests
of the Ontario public.
On April 7 this year, Provincial
Energy Minister Dennis Timbrell
called for a so-called blended
price for oil, which would
average out the cost of new oil
(which would rise to world
prices), the cost of "old" oil (held
at $8 a barrel) and the cost of
imported oil.
Setting the stage for the annual
Federal -Provincial debate on
energy (oil and gas) prices, the
federal government on April 27
released a long-awaited energy
policy paper. The major items of,
this paper were as follows. Oil
and gas prices must rise to reach
world prices in order to stimulate
exploration; Canada must work
toward self-reliance defined as
reducing dependence on foreign
sources. This is a change from
the 1973 policy of working toward
self-sufficiency. A new geological
survey has drastically cut
estimates of oil and gas reserves.
On May 3 there was a special
debate in the Ontario Legislature
to consider Ontario's proposal for
an alternate method of pricing
domestic crude oil. The debate
did not lead to a vote.
The Liberal Party's position
was that the pricing proposal of
Energy Minister Dennis Timbrell
7
I
7
< illA ril ffiA4),Q)ectik3 idinliviG1P'crg og
Developrnents in fuel supplies
and the Ontario Government was
irresponsible and misleading, It
would not ensure adequate
energy supply; failed to
recognize that Canadian oil
supplies will probably be
depleted within a decade, at
which time consumers and in-
dustries will have no alternative
but to pay world prices for oil;
and ignored the urgent need to
encourage energy conservation,
develop renewable energy
sources and prepare our industry
and consumers for the advent of
world oil prices.
We felt that producing
provinces' oil revenues should
not be further increased, and that
despite Mr. Timbrell's claim that
"the needs of the oil producing
provinces must be recognized",
we are unwilling to pay these
provinces higher prices.
The oil industry's claim for a
larger return in order to finance
exploration is weak, in our
opinion. We agree with Mr.
Timbrell that the oil industry
should be guaranteed a higher
price for new oil discoveries in
order to motivate exploration.
However, the cash flow
requirements to finance ex-
ploration should be . met in the
traditional manner. If private
investors are unwilling to assume
the risks of further oil ex-
ploration, then surely govern-
ment should not force consumers
to do so.
On May 6 the provinces took
their customary positions, with
the producing provinces
demanding a $2 per barrel in-
crease and Ontario leading the
opposition to price hikes and
pushing their "blended" oil price
proposal. The Federal -
provincial meeting, however,
came to no agreement on oil and
gas prices.
Federal Energy, Mines and
Resources Minister Alastair
Gillespie announced on May 18th
that new Canadian oil prices with
the agreement of the producing
provinces would be: for gasoline
$1.75 per barrel more by March
1977.- $9.05 a barrel on July 1 and
$9.75 a barrel on January 1,
although these price increases
were not to come into effect for 60
days; for natural gas, the price
rose by 15.5 cents per 1,000 cu. ft.
July 1 and will increase by 10
cents to $1.50 per cubic ft.
January 1. Of the oil price in-
crease of $1.75 per barrel, the
producing provinces will receive
$1.00, Ottawa 50 cents and the oil
wimagEBEMBEENCEEMISSEEM
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Among the greatest things
parents can give their chil-
dren, most psychologists
agree, are themselves. They
recommend parents be avail-
able to their children when-
ever they're needed.
REG ST ATIO
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FOR
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ZURICH REr°"< .
5 ,, r Ey
(FROM 12:00-2:00 P.M.)
New This Year
Power Skating Taught By A Professional
REGISTER NOW
*'/ 0Vti.O. 40.0 0\.% SNNk.i. -; `0'V%.0:9K.•vai;
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companies 25 cents,
The final report of the Royal
Commisssion on Petroleum
Products Pricing was released on
August 19., Its major conclusions
were: (a) Ontario, as a major
user of energy should use its
influence to achieve a national oil
policy; (b) the national
framework for production of
crude oil is unsatisfactory -
"some problems are traceable to
the familiar inconsistencies of
objectives among the Canadian
governments (provinces) and the
consequent lack of measures they
adopt"; (c) the report suggests
Ontario should make plans to
import foreign crude oil in case it
becomes necessary or more
economic and the province
should work out how much it is
prepared to spend on storage of
domestic oil to ensure supply; (d)
the report calls for a national
research committee on energy to
concentrate on developing new
sources of energy supplies. This
was suggested by Liberal Leader
Stuart Smith in May.
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CLUB HOUSE RED MARASCHINO
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CLUB HOUSE PURE 106 G.
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