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Independent Oil Producers Urge Government Action Against OPEC

October 27, 1986

DALLAS (AP) _ An emergency task force representing independent oil producers urged President Reagan today to threaten OPEC with an oil import fee if foreign producers continue holding down crude oil prices.

The task force of the Independent Petroleum Association of America said manipulation of oil prices by the Organization of Petroleum Exporting Countries threatens national security as it makes the price of oil too low to pay for domestic oil exploration and drilling.

″A goal of the government of the United States of America must be to insulate domestic energy resource development from economic control and manipulation by the governments of Persian Gulf producing countries,″ said Raymond H. Hefner, the association’s board chairman.

An estimated 85 percent of the wells in the United States are drilled by independents who are credited with most major discoveries of oil and gas.

The association’s executive committee adopted the task force recommendations, and the suggestions will be submitted to the board of directors Tuesday.

Hefner said at a news conference that Reagan should ″declare to OPEC that the U.S. will take all actions necessary to prevent the destruction of domestic energy industries.″

He said an import fee could be avoided if the administration and Congress support legislation to help domestic producers. Such steps would include repeal of the windfall profits tax, tax credits for exploration and deregulation of natural gas.

The IPPA, whose membership has lost 1,000 producers to the oil price collapse this year, is meeting here this week to seek ways to restore the nation’s domestic energy industry, crippled by the collapse in oil prices and a three-year recession that preceded it.

Membership is now about about 5,700, down from a peak of 7,200 in 1981, said Ernest White, IPAA membership chairman.

″Some have sold out and retired, some have filed bankruptcies, some are flat broke,″ White said.

The number of working oil drilling rigs in the United States rose this week to 829, up from the 813 posted last week, Hughes Tool Co. officials said today. Last year at this time, the count was 1,838, officials said.

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