The Carter administration is considering a plan to ask Congress for power to force electric utilities and industries using natural gas to convert to coal, government officials said yesterday.
The President's top energy advisers have ruled out the idea of simply asking industry "to shift on a patriotic basis," an alternative Carter raised at his press conference this week, these officials said.
The administration is also weighing a package of tax incentives and penalties to prod utilities and industries into converting to coal.
President Carter and James R. Schlesinger, his top energy adviser, have repeatedly said that a stronger reliance on coal and on increased conservation measures would provide a major thrust in the President's April 20 energy message.
Natural gas provides 30 per cent of the fuel that utilities use for electrical generation.
If utilities now burning natural gas switched to coal, the United States could save 3.1 trillion cubic feet of gas a year - the equivalent of 1.5 million barrels of oil a day - according to Federal Energy Administration officials. Last week the United States imported 10 million barrels a day.
The major parts of the coal conversion program under consideration include:
Broad executive authority to force utilities and industrial users to switch from gas to coal, including a provision not in existing law that would shift from the FEA to the companies that would seek exemptions the burden of proving they should be excluded from the program.
Tax credits for utilities to offset the cost of pollution equipment such as "scrubbers."
Accelerated depreciation on equipment acquired to facilitate conversion from gas to coal.
Possible tax rebates for companies that switch to coal in advance of federally mandated deadlines.
Tax penalties assessed on a per-thousand-cubic-feet basis on plants that burn gas past the federally imposed deadlines.
While some key members of Congress and coal and utility industry officials applaud Carter's commitment to burn coal in boilers instead of oil and gas, the administration could face stiff opposition to its coal-switching program.
At a board of directors meeting in Palm Beach, Fla., yesterday, the National Coal Association, a coal industry trade association, passed a resolution opposing mandatory coal conversion.
NCA President Carl E. Bagge said his industry fears that broad mandatory conversion authority could lead to a federal coal allocation program and price controls on coal, which his industry opposes.
"We would prefer tax incentives and loan guarantees or outright loans for the utilities," Bagge said.
Although industry analysts now say the coal market is "soft," coal prices have more than doubled since 1973.
The strongest opposition to the coal conversion plan, however, could come from electric utilities and environmentalists.
The Edison Electric Institute estimates that the cost of converting existing oil and gas-burning plants to coal by 1985 would exceed $50 billion.
W. Donham Crawford, president of EEI, says the utilities need "a long term commitment to coal" to convert - a commitment he says just is not there.
Crawford says the industry is also concerned that "Carter's program could mean higher utility rates for those areas burning coal now."
FEA officials say the utility industry has opposed attempts under existing authority to require power plants to convert to coal.
The FEA program, congressional and administration officials agree, is beleagured by legal and bureaucratic constraints inherent in the 1974 Energy Supply and Environmental Coordination Act's coal conversion authority, which expires in June.
Only one plant, the Atlantic City Electric Co.'s England State Plant in New Jersey, has been converted as a result of an FEA order.
Perhaps the most difficult obstacle, administration officials say, is the conflict between clean air standards and Carter's commitment to increased coal burning.
Carter plans to send an environmental message to Congress March 31. Administration officials expect that this message will contain a strong indication of what the President intends to do about the Clean Air Act of 1970.
Yesterday Sen. Henry M. Jackson (D-Wash.) introduced a coal conversion bill that would give the administration broad bowers to mandate coal conversion.
Jackson's bill includes a provision saying that "whatever the applicable environmental requirements, they are to be met."