GAS CHAOS IN BRITAIN IS A WARNING FOR U.S. Sunday,September 17,2000 By NILES LATHEM

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Grim images of Britain's energy crisis - closed gas stations, police escorting gasoline tankers, hospitals and sanitation cutting back services - provided a sobering lesson to the United States last week. As the smoke began to clear from the debacle and life slowly began to return to normal, industry experts and policymakers say the United States is not likely to experience the chaos that resulted from the angry blockades that shut down Britain and other parts of Europe in protests organized by truck drivers to protest sky-high oil and gas prices.

But they warned that Europe's oil meltdown demonstrates that the United States, the largest consumer of oil in the world, has been too complacent for too long and faces its own acute short-term problems in the coming year.

"Can what happened in England happen here? Probably not, but you can never say never," said Sen. Charles Schumer (D-N.Y.), who for the last year has been sounding alarm bells on energy.

"We have been ill-prepared on energy. The demand for oil is increasing while the supply remains flat. And if we don't do something within the next year it is possible we see the same situation here that we saw in Europe in the next two or three years," Schumer told The Post.

Oil-industry experts say many of the conditions that led to the European protests do not exist in this country.

Britain and other countries for example have national sales taxes that helped cause the price of gas to skyrocket to $4.50 a gallon, while the 24-cent-a-gallon U.S. federal tax on oil and gas is a fraction of what British consumers are paying.

"Also you would never see the kind of support for these protests and the blockades in this country. With the love affair for the automobile, the American public and the political leadership would not stand for it," said Larry Goldstein, president of Petroleum Industry Research Associates.

But the roots of Britain's oil crisis are shared by the United States and date back to 1997 when the OPEC cartel, reacting to the collapse of Asian economies that created an oil glut and prices at $10 a barrel, cut production by 400 million a day.

It's taken three years to feel the impact. But last week the price for a barrel of oil hit a 10-year high at $35.28.

In this country, stockpiles of home heating oil are at 20-year lows while demand increases.

Despite OPEC's recent agreement to start increasing production, the cost for home heating oil is expected to rise from 88 cents a gallon to $1.50 a gallon this winter, creating hardships for hundreds of thousands of low- and middle-income consumers.

Experts predict that the cost of a gallon of gasoline will hover around $2 well into next summer and airlines this month added a second $20-a-ticket price increase for domestic flights to help defray the increased fuel costs.

The real worry in all this, says Schumer, is not that America will run out of oil or see the return of the gas lines of 1973, but that prices will spiral out of control.

http://www.nypostonline.com/news/10847.htm

-- Martin Thompson (mthom1927@aol.com), September 17, 2000