The Senate yesterday slapped down, 73 to 21, Sen. Edward M. Kennedy attempt to freeze, and in same casses, roll back natural gas prices at present levels as it took a first vote on the hotly contested issue of gas pricing.
The Senate also scheduled a vote tonight on the main proposla to end price controls which is immediate deregulation of new onshore gas. The sential to stimulat production of more gas. The administration which wants to continue controls but at a higher level, says deregulation would coat consumers about $10 bilion a year more than its proposal.
The administration would extend controls to intrastate gas as well as gas that crosses state lines and raise the price ceiling from $1,45 per thousand cubic feet to $1,75 Kennedy (D-Mass) proposed holding the ceiling at $1,45. He argued that producers have already received a 500 per cent price increase in five years - from 22 cents per thousand cubic feet in 1972 - and that should be incentive enough to produce more gas. Opponents protested that Kennedy's amendment would roll back the price of presently uncontrolled intrastate gas that sells for close to $2.
Meanwhile, without taking any votes, the Senate Finance Committee made it clear yesterday that it will not approve the oil tax which is a key part of President's Carter's energy program unless the money is used to produce more energy.
For two hours yesterday morning committee members denounced the proposed tax, which is designed to cut oil use by taxing its price up to world levels, and Carter's proposal to rebate it to consumers to avoid adverse impact on the economy. Not one of the 18 senators spoke up for the rebate. Sen Abraham Ribicoff (D-Conn) called it "damn foolishness" to tax money away and then give it back.
At length, Assistant Secretary of Treasury Laurence Woodworth the committee's former chief tax adviser, said that while the administration "much prefers the rebate, we are pragmatic people as well."
He offered to work with the committee to draft into legislation a concept Ribicoff proposed for using the tax money to produce more energy and improve the nation's mass transit systems. When fully effective in 1980, it would take in $14 billion a year.
Ribicoff would give the administration the tax it wants to cut down the use of oil by pushing up the price of gasolie by about seven cents a gallon and similarly increasing prices of other petroleum products. He proposed rebating most of the money the first year to low-income persons and then putting tax receipts into energy and transit funds.
Woodworth called the Ribicoff proposal a "compromise which the White House was not unaware of" when the committee met yesterday. Ribicoff said his plan was "the only way to salvage" the oil tax which the administration considers the centerpiece of its energy conservation program . The committee's staff estimates the tax would save up to 650,000 barrels of oil a day by 1985.
Ribicoff's proposed energy finance corporation would make loans over 10 years to help develop new energy sources especially high risk, expensive projects such as extracting oil from shale rock. The transit funds could be used for capital investment, but not for operating costs to build up bus, subway, bicycle alternatives to the gas-burning auto carrying one passenger to work.
COmmittee chairman Russell B. Long (D-La) has been trying to nudge the committee in thisdirection for weeks.