Sen. Henry M. Jackson (D-Wash.) said yesterday that both the Senate Energy Committee, which he heads, and the full Senate are so closely divided on natural gas price controls that their pending decisions on the issue could go their way.
Jackson's committee is to meet today to begin voting on this, the most explosive issue in President Carter's energy plan. The House has approved Carter's proposal to contiune controls, but at a higher level than is now in effect. The gas industry has fought for 23 years to end controls, contending that regulation and higher prices are the only way to assure exploration for needed new supplies of gas.
Jackson released a study prepared at his request by the Congressional Budget Office that substantially agrees with Carter that deregulation would cost consumers abour $10 billion a year more than administration plan and would result in the production of only 5 per cent more gas. Earlier the budget office made an overall study of Carter's plan and criticized it for overstimating the energy savings it would produce.
Jackson said he believes his committee is divided 9 to 9 on deregulation.If that proves to be the case, a deregulation amendment would fail in committee on a tie vote and the administration proposal would be sent to the Senate floor.
Two years ago the Senate voted 50 to 41 to deregulate new onshore natural gas. But the situation has changed now, said Jackson, "with a new price arrangement that should turn some votes around. It's too close to call."
Under present law, natural gas that flows across state lines is regulated at the wellhead with a ceilings of $1.46 per thousand cubic feet (MCF). Intrastate gas that consumed in the producing state, is not regulated. This has created a distorted dual market which produced criticial shortages in consuming northern states last winter, while producing states such as Texas had gas for low-priority uses such as boiler fuel.
Carter's proposal would extend controls to cover intrastate as well as interstate gas, but would raise the price ceiling to the heating equivalent of domestic oil. This would start at $1.75 per MCF and increase gradually as the price of oil rises.
Jackson called the Carter proposal a "more-than-ample incentive" for the gas industry to look for more gas.
The budget office report predicted that deregulation would result in the wellhead price of gas shooting up to between $3.50 and $5 per MCF for about two years and then decreasing somewhat because of competition.
The average monthly residential winter gas bill would be $42.80 next year under the administration bill and $55.60 under deregulation, the report said. By 1985 the monthly cost under the Carter plan would be $47.20, but it would be $70 if gas were deregulated, the report said.