The Justice Department and the Federal Trade Commission locked horns yesterday over proposed legislation to restrict oil company ownership of coal and uranium reserves.

Testifying before a House Interior subcommittee on energy and the environment, FTC Bureau of Competition director Alfred Dougherty Jr. warned that " . . . the growth of a competitive energy market may be threatened by the leading oil companies' growing interest in non-petroleum energy industries."

But John Shenefield, chief of the Justice Department's antitrust division, argued that existing anti-trust law was adequate to handle the problem of competition.

Three of the four largest coal producers and two of the top three uranium producers are owned by oil companies, Dougherty said.

"The dangers (of that situation) stem from the fact that oil, natural gas, coal and uranium compete with each other in many uses, and will probably continue to do so over the next five to 30 years," he said, thus putting oil companies in the position of having to compete against themselves.

"With extensive fixed investments in petroleum and natual gas markets, a large oil firm considering the development of coal or uranium resources must consider the effect of this development on the firm's existing oil and gas investments," he added.

Because of this intra-company competition, Dougherty said, it is likely that new technologies would likely lose out and be off as long as possible because they have huge development costs.

"Oil companies presently controlling extensive reserves would be permitted to retain these reserves," he said. "While the amount of as-yet-undiscovered coal, and uranium reserves in the U.S. is subject to considerable debate, the actual amount of these reserves may be quite small.

"If so," Dougherty warned, "the bill affords companies like Exxon and Continental, in the coal industry, and Gulf and Kerr-McGee, in the uranium industry, permanent control over substantial shares of the relevant reserve markets."

Instead, Daugherty suggested, the legislation should put a "cap" on the percentage of the total amount of coal or uranium reserves that can be owned by one company. As reserve estimates or economies of scale change, he said, "the cap could be adjusted accordingly."

"At the present time, I believe a five percent cap on coal reserves seems roughly reasonable," he said. He also proposed a 5 percent cap for uranium, but said that "this question is far more open."

Shenefield said there is no competition problem, and existing antitrust laws would safeguard against the problem raised by the proposed legislation.

"By denying coal leases and uranium claims to major oil companies, we could be severely restricting the ability of these companies to compete in coal and uranium markets," he said. "Such a restriction would increase somewhat the likelihood of anti-competitive behavior by the existing firms in those markets."

Shenefield said "the potential for (this legislation - H.R. 8) to lessen competition in coal enough to caution benefits of the bill clearly outweight its anticompetitive potential."

Since oil companies "are experience in extractive industries and have the capital to devote to the development of energy supplies," Shenefield added, "restricting their ability to apply their expertise to the development of coal and uranium supplies could lessen competition and result in the development of some of these resources in a less efficient manner."