There is no turning back once you start down the road to hell. Either you arrive or you get stranded in purgatory.
President Carter and Energy Secretary Jame's R. Schlesinger might reflect on this during the final scenes of the natural gas debate - for it captures perfectly their predicament.
If the bill passes, Congress will have enacted a law that promotes neither maximum gas production nor energy conservation and, simultaneously, is so complicated that it defies easy obedience or enforcement. Like all bad laws, it will ultimately breed contempt for the law.
But the bill also has acquired a symbolic importance far removed from its merits. If it falls, the United States will be seen - once again - as having rejected a "national energy program." Abroad, this rejection will confirm the view that the United States cannot manage its own economy.
Carter and Schlesinger have only themselves to blame for this denouement. Flawed in concept, their original natural gas proposal activated all the confusion and conflict inherent, in this issue. The result was preordained.
The best way to understand their error is to take a detached look at natural gas - the way a Martian might.
Natural gas now supplies about 25 percent of the nation's energy and is used by more than half of all homes. Although nearly 60 percent of gas sales go to industry, this use is declining. Fearing future shortages, businesses have conserved more than consumers and have switched to other fuels.
Consequently, homes and apartments will constitute an ever-larger part of the gas market. For most residential users, gas prices today are cheaper than oil or electricity prices. Last year, for example, the average cost of gas for home-owners - $2.23 per thousand cubic feet - was about one-third less than the equivalent oil cost.
Federal price regulation accounts for much of this difference. About 55percent of all gas moves between states (interstate) under prices set now by the Federal Energy Regulatory Commission and previously by the Federal Power Commission. The FERC has set wellhead prices ranging from 54 cents per thousand cubic feet (for gas discovered before 1973) to $1.50 (for gas discovered after 1975). Pipeline and distribution costs account for the rest of the retail price.
By contrast, gas produced and consumed in the same state (intrastate) isn't regulated and now sells for a wellhead price between $1.30 and $2.10 per thousand cubic feet.
The conclusions are relatively simple. The distinction between the interstate gas and intrastate gas means some consumers (in the interstate market) who want gas most can't get it because producers sell where the price is highest. So the government needs to end the distinction.
Likewise, the government needs to end price controls. If this would push prices up, it also would promote maximum production and conservation. The impart would extend over about a decade because most prices are now set by long-term contracts.
That Cater and Schlesinger did not accept this conclusion inevitably led to all their subsequent political and public relations problems. They simply fixed another artificial price for newly discovered gas, $1.75 per thousand cubic feet, and proposed applying this price to intrastate gas.
The justification for this new price does not stand scrutiny. Any higher price (they argued) wouldn't result in much more gas simply because there isn't much more. In facts, no one knows how much natural gas remain and, therefore, what the price should be. After two years of study, Resources for the Future Inc, a Washington research group, came to precisely that bland conclusion.
But if Schlesinger seriously belived in the scarcity of gas, the proper reponse would have been to let prices rise and to tax "excess" profits from producers. Holding down prices simply stimulates unnecessary consumption, depleting a scarce resource faster. It protects gas consumers, but creates more price pressures on oil - the most easily available substitute - and, consequently, hurts oil consumers. Because "conservation" was such a prominent part of the Carter rhetoric, this glaring inconsistency undermined the President's credibility.
Having embraced this ill-conceived plan. Carter and Schlesinger have been its chief victims. Not the least of its liabilities is a potentially stifling effect on the development of Mexico's vast gas reserves. Negotiations between the United States and Mexico over the export of two billion cubic feet daily to the United States (3 percent to 4 percent of total consumption) broke down early this year, in part because the Mexicans insisted on a price above the administration's regulated price.
Allowing a free market price would simplify talks with the Mexicans enormously. Mexico needs to sell its gas here. If it can't (or won't), it may slow its energy development. Much of the Mexican gas is found with new oil. The upshot is that there could be not only less gas production, but also less oil production - and more pressure on prices.
Nor did the Carter plan, inconsistent and incapable of being explained to the public, command much support in Congress. The resulting conference bill is a logrolling monstrosity. At last count, the bill contained at least 17 price classifications. Wells drilled to 15,001 feet get one price and those to 14,999 feet getanother. Wells drilled within 2.45 miles of an existing well get one price and wells 2.55 miles away get another. Some gas would be freed from controls (theoretically) in 1985, and other gas wouldn't.
Consequently, almost no one is satisfied with the outcome. Staff members of the FERC fear that the bill may require detailed information on each new gas well - 11,000 last year - and could not possibly be administered conscientiously. Sen. Edward M. Kennedy (D-Mass) believes the bill will "result in endleslitigation; delay and misunderstanding," The producers are appalled.
So Congress can choose between the disaster of passing an atrocious bill and the calamity of rejecti ng an "energy plan." It is a chapter straight from Dante.