Or are you denying the first premise and are trying to argue that it wasn't an immoral act?
Yes. I am highlighting the fact that morals are vague subjective principles. The more a collective of people is benefited by a moral principle, the more moral agreement there, and thus more moral clarity. It is perceived that murder is 'bad' based on the collective's need for their own security.
By examining the roots/origins of morality we can try to establish limits. Regrettably, extremely few people feel insecure or effected when they hear that children are starving in Africa. If they did feel the same level of care for them as their immediate peers, nobody could function. Every person on Earth would be dragged into hell. Convention tells us the morals apply universally like math, but how can that be completely accurate when virtually everyone doesn't feel the as morally offended as soon as the problem is distant and non-intrusive?
This argument is simply that morals are too vague and subjective to impose an absolute structure, which was implied in the premise.
You misunderstand the argument when you say, "Everyone would be dragged to hell". The argument only applies when you buy what you believe to be a luxury, while you could have prevented easily preventable deaths. When you are not doing, or are capable of one of these, it doesn't apply.
So it isn't an immoral act because of the proximity? That because the starving children are thousands of miles away, we become disconnected with them morally?
Alright, so lets say in the thought experiment, the pipe lines are traveling hundreds, even thousands of miles away to the suffocating children in the submarines. Knowing this, Jim thinks to himself, “Even though those of us here on the Cayman Islands filling our air tanks at O2 Inc. are in an especially good position to help the suffocating children, the children are so very far away. I can’t even see them. So, I’m not obligated to try to prevent their easily preventable deaths. So, I’ll fill up my spare air tanks and enjoy having them around on my yacht’s deck.
Verdict: Jim’s choosing to fill his extra tanks instead of directing the compressed air toward the suffocating children is still immoral, and since there is now no proximity difference between our scenarios, proximity cannot be a factor.