Detroit Free Press from Detroit, Michigan • Page 70

ir Sundav, Jan. IS, 76 1 1 Rni I rV, c- 0 TJ ,4 ii i "7 Energy Utilities TTTlk TTT I as iigntene which, on the whole, has been the worst-performing nuclear plant in the United States. Until the PSC bailed Consumers out by passing some of Palisades' costs to the company's customers last year, tho expenses associated with the plant were threatening Consumers with financial ruin. Because of technical problems, there is a chance (hat Consumers will have to put a new set of sleam generator tubes in the plant a process that would cost millions of dollars and keep the plant out of action for monlhs. The company is now inspecting the plant and scrutinizing Please lurn (o Tage fip, Col.

1 liquids going to Marysville, So far, however, the 1 KA has not cut Marysville's feedstock, though it. has reduced from 211,000 barrels a day to barrels the Canadian oil available to fuel Consumers electric generating plants near Bay City. The Marysville question will probably be resolved this year, and it's almost impossible to believe that the federal government will allow the I-'EA to endanger gas supplies in Michigan, which is vital economically and has many electoral votes. Consumers may also settle this year the question over its Palisades nuclear plant, fill. Dill) barrels of natural gas liquids a day.

Underpressure from petrochemical companies, the I'EA has been trying to limit production at synthetic gas plants to make more natural gas liquids feedstocks available to other users. Consumers has another Marysville problem because Canadian government, which has sharply reduced the amount of oil it exports to the U.S., counts about 35,000 barrels of Marysville's feedstock as oil exports. The TEA Is responsible for allocating Canadian oil among individual U.S. users, and may try to reduce the natural gas ably continue their rapid rise, there should be more than enough to go around, unless the Federal Energy Administration succeeds in its attempts to limit the output of Consumers' synthetic gas plant at Marysville. THE MARYSVILLE plant, using natural gas liquids imported from Canada, provides about a quarter of Consumers' gas, and has enabled the company to continue serving all its gas customers.

The cost of the plant's gas, though, is four to five times the cost of regular natural gas. The FEA doesn't care much about the price, but it's upset because the plant uses about Grasp on Oil Economy ii Pari of the difficult to pronicm is inai is convince anyone of that the urgency of the situation when of shortage there is no energy -I anywhere in the world. BY ALLAN SLOAN Free Press Business Writer A ago, ho big question about; Michigan utilities was whether Consumers Power Co. and Detroit Edison Co. would make it through 1975 without collapsing.

Both companies had been swamped by the shock waves set off when Consolidated Edison Co. of New York skipped a dividend payment in April, 1974, and found it almost impossible to raise the large sums of money that they needed in order to survive. However, helped by the big New York banks and favorable decisions by the Michigan Puhlic Service Commission (PSC), Edison and Consumers made it through 1975 comfortably, after some rocky times early in the year. The PSC in early '975 granted the companies virtually all the money they had sought in their 1974 rate cases. Going into 1976, the companies' major financial problem is whether the PSC will take away part of the fuel adjust-ment clause revenues it granted during the companies' hour of need.

The clause allows Consumers and Edison to increase rates to their customers automatically when the cost of generating fuel rises. However, there are indications that the PSC has been keeping a rather slack watch over fuel clause calculations. The PSC is coming under increasing pressure to do something about the situation. Unlike the other states in the Midwest, Michigan at least in the areas served by Consumers and the Michigan Consolidated Cias Co. of Detroit is not facing a natural gas shortage.

Though gas prices will prob- dustry on the first of this year. Saudi Arabia is expected to take over the Arabian-American Oil Co. later this year. At the same time, the oil companies have received a buffeting from the governments of some consuming companies, particularly the United States. The question of whether the companies should be broken up has received considerable support, and the battle over forced divestiture is expected to be a major political issue this year.

Most informed sources, nevertheless, believe the companies will be around for a long while, even if in somewhat altered roles. Levy, the oil consultant, contends "The major oil companies will continue (o be the most important techno- 250 Mew Saer Came To Peoples Federal Savings In 1975 Them Musi BMmsm! BY WILLIAM IX SMITH Ntw York Times Service NEW YORK The world Jias entered a post-revolutionary era after the bloodless but not painless coup in which the Organization of Petroleum Exporting Countries overthrew the old order in energy end turned political and economic relationships topsyturvy. "What the future holds de-pends on how everyone adjusts to the new realities," according to John Lichtblau, head of the Petroleum Industry Research Foundation. "All sides are slowly coming to grips with the new facts of Jife. This is the process we are going through now." Most experts do not expect fcnother quantum increase in foreign oil prices.

"I just can't Joresee anything like another fivefold increase in oil prices happening again," Lichtblau said. Few informed sources would argue that the pace and quality of the reconstruction of an energy order has been slow and inept thus far. "Things are just not going as well as they should," is the terse and somber assessment of Walter Levy, an oil consultant. Part of the problem is that it Is difficult to convince anyone of the urgency of the situation Jvhen there is no shortage of energy anywhere in the world, fxcept a relatively modest shortfall of natural gas in the JJnited States. Indeed, OPEC has put capacity at about 13 million barrels a day or some 30 percent of its total capacity.

I In addition, the threatened collapse of Western economies, the acquisition of major industries and Middle Eastern domination of commerce through the accumulation of vast petrodollar surpluses have all failed to materialize. BENEATH the surface calm, however, there appear be far more threatening Undercurrents. The world has become Increasingly dependent on OPEC oil despite a downturn Jn consumption and the experience of the embargo. In the I'nited States, dependence on OPEC sources has increased from 49 percent before the Arab embargo to above 60 percent now. Both Canada and Venezuela, traditionally the two largest Jiuppliers of oil to the United i Please turn to Page 7F, Col I 1 1MIJW dividual consumers in making the adjustment to the new order is that it involves finding definitive answers to some hard and complicated questions.

Some of these questions are: Mow long will OPEC be able to dominate the world energy situation? What role do the oil companies have? What is the future of oil? The central question is the future of OPEC. Contrary to early notions and some wishful thinking, there is a growing consensus among informed opinion that the group will remain intact for the foreseeable future. They note that OPEC has survived the current vast overcapacity and demand drop. The United Stales, which toyed with the idea of making the breakup of OPEC the heart of its energy policy, no longer seems to be entertaining the idea. Exxon the world's largest oil company, in its study of the world energy outlook to the year 1990 envisions little or no diminution of the cartel's cohesion.

Alan McDougall, manager of energy planning for Exxon, commented, "We see the basic elements keeping OPEC around through 1990. It is an unbalanced organization, Saudi Arabia and all others. It is simply a question of what are the policies of the Saudis, and that will set OPEC policy." Some experts however, see OPEC unity facing a major test in 1978-79 when both the North Slope oil from Alaska and the North Sea oil will be fully in production. THE OPEC coup displaced the oil companies and has put them in a subservient role to the producing companies. Total nationalization took place last year in Kuwait and Iraq, Venezuela took over its oil in 1 i 'LB (., HOIHE OF THE 1 EHPnnonois Business ionn Maybe it's because we're big enough to handle all their needs with complete efficiency and safety like Keough Plans, IRA accounts, Transmatic transfers, direct deposit social security, travelers checks and utility payments.

Or maybe its because we're small enough to assure personalized service, where you're a name instead of a number. Or maybe its our seven convenient offices. Or the fact that we pay the highest interest rates allowed by law. Actually, we feel it's because at Peoples, we like people and we treat them accordinglycourteously, individually, and efficiently. Maybe that's why we've just experienced the biggest growth year in our history.

At least, we like to think so. Through long term and continuous cash advances, we develop loan packages capable of generating all of the outside funds that Nil 4 i i you are ever likely to need 1 for expansion, equipment or ft i mg capital. You or your banker ought to contact us it you can utilize more 1 1 outside cash than now avail able. We welcome bank par ticipation when feasible. Phone collect from outside our local call area.

I J. R. Hoedl, Vice President NATIONAL ACCEPTANCE COMPANY of America 23777 Southlield Road 8v A rSouthfield, Michigan 48075 313353-4010 Statement of Condition December 31, 1975 ASSETS Cash on Hand and in Banks 1,620,499 U.S. Government Securities 4,004,000 Federal Home Loan Bank Stock 928,700 First Mortgage Loans 110,600,704 Loans on Savings Accounts 65,623 Prepayment to Federal Savings and Loan Insurance Corporation Reserve 379,395 Real Estate Owned and in Judgment 349,912 Office Buildings and Equipment (Less Depreciation) 1,472,383 Deferred Charges and other Assets 1,790,471 TOTAL ASSETS $121,211,687 NEED A FIKG1AL CHECK-UP? LIABILITIES Savings Accounts $105,752,487 Advances from Federal Home Loan Bank 7,000,000 Loans in Process 553,325 Other Liabilities (Largely for Taxes Prepaid by Borrowers) 2,360,516 Specific Reserves 310,140 General Reserves 4,305,813 Surplus 929,406 TOTAL LIABILITIES $121,211,687 This is an excellent time to review your financial health Why not? You will never have a better opportunity to give your financial health the check-up it deserves. Just indicate your specific areas of interest below and return to us.

Information will be forwarded without obligation. States, have cut back shipments. Canada has reduced exports to the I'nited States by about 25 percent and has warned that the flow may have to be phased out entirely hy 1082. Venezuela has reduced its production from a high of 3 million barrels a day to about 2.3 million in an effort to stretch out diminishing reserves, Saudi Arabia has become the chief supplier of foreign oil to the United States, a role that is unlikely to change. Crude oil production in the United States has continued to decline despite a big increase Jn drilling over the last two years and is now at a level of j.2 million barrels a day compared with fl.2 million in 1973.

In short, the United States, the chief consuming nation and cornerstone of the Western economic and political alliance, is more vulnerable to embargo or pressures than it was before the Arab actions of 1973. 1 The vast transfer of wealth to the oil-producing nations has been handled adroitly and jvith no casualties so far, but again, appearances are deceiving. A study by the Twentieth Century Fund warns that "the full cost of imported oil has jtot yet come home to the importing countries because, to date, less than half of the money and other claims transferred to the oil producers has been redeemed for actual goods and services." At the December meeting in Paris of the 27-member Conference on International Economic Cooperation, Secretary of State Henry A. Kissinger said it was essential for everybody to understand the relations between oil prices and the stability and performance pf the world economy. Not even the OPEC nations Would argue this premise, although they could and did debate Kissinger's subsequent assertion that a lower oil price Would make possible more rapid economic recovery around the globe.

"Any further increase in prices would seriously hamper economic recovery, retard international trade and cause serious trouble to all," he said. MUNICIPAL BONDS MUTUAL FUNDS OPTIONS TAX SHELTERS UNDERWRITES OTHER CORPORATE BONDS DEFERRED ANNUITIES GROWTH EQUITIES INCOME SECURITIES I.R.A. KEOGH PLAN NAME PEOPLES FEDERAL SAVINGS 751 GRISWOLD AT LAFAYETTE DETROIT 48226 961-0170 Other Convenient Detroit Area Locations Woodward at 13 Mils 549-6600 Harper at Outer Drive 527-7210 Gratiot at Tocpfer 772-5500 Jefferson at Martcr 774-0180 Joy Road At Beech Daly 937-2700 11757 15 Mile Road 979-7100 STREET- CITY- -ZIP- PHONE- I currently have an account with Manley, Bennett, McDonald Co. j1" Manley, Bennett, McDonald Co. MEMBERS NEW YORK STOCK EXCHANGE, INC.

1100 Buhl Building Detroit, Michigan 2r-5r(0 PI.OOMFIKI.il HILLS PFTKOIT FLINT KAPIDS LANSING OKOSSO rLY.MOlTH MUTIII ILLIl UtAVLKsF, CI IV uAKKLN THE rKUBLf.M facing all parties the producing countries, the consuming countries, the oil companies, and the in-.