Kennedy said the big oil and gas companies have rapidly increased their coal and uranium holdings in the past decade to the point where they now own nearly half the privately held coal reserves and more than half of the uranium industry's capacity.
An attempt to halt the purchase of coal and uranium reserves by big oil and gas companies will be made by Sen. Edward M. Kennedy (D-Mass.) when the Senate taked up the first part of President Cater's energy bill today.
The measure approved in July by the Senate Energy Committee would give the government broad powers to order electric utilities and industry to convert their bodies from scarce oil and natural gas to abundant coal.
Kennedy argues that since government will be ordering a considerable increase in the use of coal, government should see to it that price competition is retained between these competing fuels. One way to do that is to stop purchase of coal companies by big oil and gas companies, said Kennedy.
His proposal would not require oil and gas companies to sell the coal properties they now own, though Kennedy does favor divestiture and probably will push that later.
In a letter sent to all members of the Senate, Kennedy said the big oil and gas companies have rapidly increased their coal and uranium holdings in the past decade to the point where they now own nearly half the privately held coal reserves and more than half of the uranium industry's capacity.
Kennedy's proposal would apply to the 16 biggest oil companies and 6 largest natural gas producers. The Secretaries of Interior and Energy could permit them to buy coal or uranium resources on federal lands if they determined this was necessary to increase energy production and would not substantially lessen competition.
Sen. Howard M. Metzenbaum (D-Ohio) plans to offer an amendment to the coal conversion bill that would impose price controls on coal if the price exceeds the rate of inflation by more than 10 per cent. The price of coal has climbed far faster than the last four years as coal prices chased the price of coal which quadrupled.
Unlike the House, which handled Carter's energy package as a single bill and passed a version reasonably close to what he wanted a month ago, the Senate will take it up piecemeal. There will be one tax bill and several measures dealing with non-tax provisions such as pricing of natural gas, electricity utility rate structure reform, efficiency standards for home appliances and help for homeowners in insulating homes.
Carter estimated that his program would save 4.5 million barrels of oil a day by 1985. Several independent surveys concluded that he had overestimated by about one million barrels. The House bill would save less than 3 million barrels a day. Daily consumption now is about 17 million barrels.
The most explosive issues facing the Senate, as in the House, are expected to be the fight over removing price controls from natural gas and whether to give part of the wellhead tax on oil back to the industry as a plowback to explore for more oil or give it back to consumers.
The gas industry is fighting hard to get rid of price controls, arguing that this is the only way to increase production. The House approved Carter's plan to continue controls but at a higher price, which he contends is ample to encourage exploration for new sources of supply.
The Senate Energy Committee will vote on the gas price issue Thursday or Friday and appears to be almost evenly divided on the issue. But the Senate, unlike the House, approved deregulation of new natural gas in the last Congress. All other non-tax parts of Carter's bill have been reported by the Energy Committee to the full Senate for action.
The Senate Finance Committee has held one week of hearings and plans seven more days begining Thursday. Its schedule calls for the committee to vote on the bill during the week of Sept. 19. and have it ready for Senate action the last week in September.
Finance Committee chairman Russell B. Long (D-La.) favors toughening Carter's conservation proposals such as the tax on big gas-guzzling cars. He also favors giving part of the oil tax back to the industry to use to find more oil.