The chairman of the Federal Energy Regulatory Commission has written President Reagan proposing that he appoint a bipartisan, blue-ribbon panel to handle the politically tricky question of natural gas controls.
Noting the success of the president's special commission on Social Security financing, C. M. (Mike) Butler III argued that a similar commission "might be able to find an acceptable legislative answer to the gas pricing problem where so many others have failed."
The letter, sent to the White House yesterday, comes at a time when the administration is struggling with the question of what to do with the controversy over rising natural gas prices in a time of reduced demand. In some areas, natural gas prices are expected to rise by more than 25 percent this heating season. Even so, because of quirks in the law or in contracts, some gas pipeline companies have bought high priced gas when lower cost supplies were available.
Reagan has promised throughout his administration to try to remove price controls from natural gas, but high prices and a massive lack of consensus in the natural gas industry about what to do have sharply reduced the prospect of such legislation succeeding.
Nonetheless, Department of Energy Secretary Donald Paul Hodel has been meeting with various segments of the industry and other affected groups trying to fashion a bill tolerable enough for the administration to support. The president is expected to receive a list of options, including proposing legislation, by the middle of next month.
Initial response to the Butler proposal from the industry and on Capitol Hill ranged from viewing it as premature to completely negative reaction. Butler had not tested the waters on the proposal but simply presented it as a logical solution to political problems, an aide said.
"I really do not think this is a problem of the magnitude of Social Security that would require a special commission, nor is it a problem that coudn't be solved more expeditiously by timely legislative action," said George Lawrence, president of the American Gas Association, a group that represents various segments of the industry but principally gas utility companies.
Lawrence complimented Butler for pointing out to the president the seriousness of the problem but also said that a panel would produce only a recommendation, with the Congress still left with the ultimate task of resolving the issue.
"I am curious as to why the chairman of the Federal Energy Regulatory commission is writing the president, asking him to do something that he, Butler, is paid to do," said House Energy and Commerce Committee Chairman John Dingell (D-Mich.). Dingell believes Butler has the tools to resolve the pricing problem, an aide said.
"If every other current effort were to fail, maybe the only other alternative would be some kind of blue-ribbon panel like the Social Security panel, but I think we ought to at least give the current effort an opportunity to complete itself and to see if the administration can come up with a bill and submit it to the Congress," said Rep. Tom Corcoran (R-Ill.), a member of the House fossil fuels subcommittee.
"I suspect that Social Security, for all its difficulties, would be much easier to solve via a blue-ribbon commission than the natural gas problem," he added.
"I do not suggest that the magnitude of the natural gas problem is the same as that of Social Security in terms of its impact on the national economy," Butler wrote Reagan. But he said that he saw many analogies, including the fact that "the politics of gas pricing are deeply divided and promise to remain so, perpetuating regional economic dislocation and political division."