A House subcommittee yesterday accused Gulf Oil Corp. of violating federal energy law by failing to deliver up to 625 million cubic feet of natural gas a day to the Texas Eastern Transmission Corp., which serves 16 southern and northern states.
The report also alleged that Gulf and Texas Eastern, starting in 1971, "may have engaged in a conspiracy in violation of federal law to withhold gas from interstate market until the orice increased."
Gulf chairman Jerry McAfee said, "The claim we have been withholding gas is absurd. We have every intention ot fulfill the terms of this contract."
Rep. John E. Moss (D-Calif.), who chairs the House Commerce subcommittee issuing the report, also blamed the Federal Power Commission, which regulates interstate gas sales, for not enforcing Gulf's Texas Eastern contract.
"This case pinpoints that the one agency - the FPC - which has the responsibility to watch out for the public interest, failed to do so," Moss said.
FPC Commissioner Richard L. Dunham denied Moss's charges. "We have acted as expeditiously as the due process laws permitted. The FPC does not have immediate enforcement authority," Dunham said.
Last December, the FPC ordered Gulf to deliver the gas to Texas Eastern immediately or pay damages, an order that Gulf appealed. The case will be heard before an appellate court this spring.
The House report charged that "made other natural gas sales at higher prices during the time it has been underdelivering to Texas Eastern," and further accused Gulf of failing to "make an adequate effort to produce from its leases."
Gulf, the report alleged, "violated the Natural Gas Act by failing to meet its commitment to deliver 625,000 million cubic feet per day to Texas Eastern" when it began defaulting on its 1963 contract in 1971.
The House report charged that Gulf's curtailments have forced Texas Eastern's customers to find alternative higher priced supplies. The action, it said, increased the cost to consumers served by Philadephia Gas Works and the Public Service Electric and Gas Company of New Jersey by $22.5 million.
The report said that "the FPC in recent years has demonstrated a conscious disregard for its statutory duties. The Gulf case graphically illustrates the commission's neglect of its congressional mandate to protect consumers from price and supply exploitation by the utilities it regulates," the report said.
The subcommittee report recommended that Congress "require that the commission enforce the committments of natural gas producers to deliver." It urged legislation to enable consumers to sue natural gas producers when the FPC fails to get them to deliver gas covered by a contract.
The subcommittee has been investigating charges that natural gas producers have been holding back gas supplies from the market in anticipation of congressional action to deregulate natural gas prices.
Richard B. Palmer, a Texaco vice president, testified yesterday that his company had not illegally held back production from two Gulf Coast offshore fields that Moss' subcommittee said contained 500 billion cubic feet of natural gas that was being withheld from the market.