Business: Big Oil's Pinch at the Pump

Supplies short, prices up and companies have trouble getting the lead out

Bad winter weather usually brings bleak news about the nation's energy supplies, and now it is beginning to seem as if mild temperatures and sunny skies do the same. That, at least, is one way to look at the hooded pumps and OUT OF GAS signs sporadically popping up at service stations around the country.

For the first time since the autumn of 1973, gasoline is once again in short supply—not in the dead of winter, but a week before winter officially begins.

The most acute shortages are of unleaded high-octane gas, but regular unleaded is also scarce. In the past two years, consumption of the unleaded grades has grown dramatically, as federal antipollution laws have forced U.S. automakers to shift to production of cars unsuited for leaded fuels. Lead hampers the functioning of so-called catalytic converters, which remove pollutants like nitrous oxide from auto exhausts. Surging demand for unleaded fuel has driven Shell Oil Co., the nation's largest gasoline retailer, and Amoco Oil Co., the leading producer of unleaded gas, to begin limiting deliveries to dealers. Mobil and other companies are also hard pressed to meet demand.

Shell insists that its shortages are temporary and have been unexpectedly aggravated by the breakdown of a refinery at Norco, La., for 13 days in November. The plant shut just as another Shell complex, at Wood River, Ill., was temporarily closed for routine maintenance. The double trouble cut Shell's output by 10% to 15%.

The Department of Energy, which has to approve all company rationing and allocation plans, maintains that motorists will not have to worry about severe or long-term shortages—unless they panic and start trying to keep their gas tanks full at all times. Warns a top DOE official: "If people get a crisis mentality, we could get a problem that really isn't there." Adds Frank Ikard, president of the American Petroleum Institute: "The thing that I fear most is that the public will think the Shell announcement is the prelude to general rationing. If they do, we could talk ourselves into a panic and wind up with long lines of cars in front of gas stations."

So far, no such trend is developing, and after six days of providing retailers with only 75% of what they had received during the same period of 1977, Shell was able to ease off a bit last week and increase deliveries to 85% of last year's level. At the same time, however, the company announced that it was seeking permission from the DOE to continue curtailing deliveries until the month's end.