House members trying to remove price controls from new natural gas came up with a plan yesterday aimed at picking up the one extra vote they need by conditioning deregulation upon enactment of an excess profits tax.
Two weeks ago the House Commerce Committee voted 22 to 21 to approve President Carter's proposal to continue price controls but at a higher level. But that vote only placed several alternatives before the comittee, which will make a final decision today when it is expected to complete action on the major non-tax portion of Carter's energy package.
The Ways and Means Committee formally reported the tax portions of the bill to the House by a vote of 24 to 13 yesterday.
Lobbyists from the gas industry and the administration packed the Commerce Committee room and swarmed through the corridors outside seeking votes in this multibillion-dollar struggle over the pirce of natural gas.
Supporters of ending controls apparently tied deregulation to an excess profits tax because one member of the committee, Rep. Thomas A. Luken (D-Ohio), who voted for the administration plan before, indicated he would vote for deregulation if it were tied to a tax to avoid giving windfall profits to gas producers.
If Luken switched and all other members voted as they did before, deregulation would win in committee by one-vote margin. It would then go to the House, which is also closely divided on the issue.
But the deregulation-excess profits tax proposal may never come to a vote.It may be ruled out of order because taxes are under the judisdiction of the Ways and Means Committee.
Supporters of deregulation would then come up with another plan, and at least one other member of the committee, Rep. Marty Russon (D-Ill.), who voted with the administration two weeks ago, would like to find some compromise position to move to.
On the other side, the administration was working to win back Rep. Ralph H. Metcalfe (D-Ill.), who voted against the President's plan two weeks ago. And Rep. Tim Lee Carter (R-Ky.), who voted for deregulation two weeks ago, said yesterday that if the price of deregulated gas went to $3 per thousands cubic feet, as opponents contend it will, that would be a "rip off" of the public.
The new deregulation plan to be offered by Rep. Timothy E. Wirth (D-Colo.), narrowly refines the new gas to be deregulated and contains other provisions aimed at picking up middleground support.
The Wirth proposal, worked out in conjuction with Rep. Bob Krueger (D-Tex.), and Rep. Clarence J. Brown (R-Ohio), states that deregulation of new onshore gas would take effect only after enactment of an excess profits tax that would hold producers to a "reasonable rate of return." The language provides that the tax be rebated to consumers - in much the same way that the Ways and Means Committee provided that the wellhead tax on oil be rebated to users. This is intended to deprive opponents of the argument that deregulation would be a "rip-off" of consuers.
Wirth would deregulate immediately only new onshore gas. Offshore gas discovered under water would be regulated for another five years. Old Gas now flowing under contact would remain under controls.
Wirth added provisions that would keep under controls gas from capped wells - where the producer sits on a drilled well hoping for a higher price-and-extension wells drilled in existing reservoirs.
The Wirth plan also seeks to make industry pay all the price increase for newly discovered gas. But this would spill over to residential consumers if the price of gas rose to 12 per cent of the cost of imported oil. He also seeks to increase the flow of gas to the consuming north by removing a protective price wall around intrastate gas which had been written into the bill by a subcommittee.
Gas that is piped across state lines is now regulated with a ceiling of $1.45 per thousand feet at the wellhead. But gas consumed in the state where produced is not regulated and sells at about $2.
This distorted dual market created shortages in the nort last winter, while producing states such as Texas used gas for low priority uses usch as boiler fuel. Carter wants to eliminate the dual market by extending controls to gas at a price of $1.75. Opponents say the only way to produce enough gas is to let it seek a free market price.
Meanwhile, Sen. Russell B. Long (D-La.), whose Finance Committee will handle the energy-tax package in the Senate, wrote his colleagues that Carter'r program "is an unmitigated disaster" as far as increased energy production is concerned.
Long is expected to try to add to the bill some tax incentives for the oil and gas industry.
Long, in his letter criticizing Carter's program, included a reprint of a newspaper ad in which Mobil Oil Co. blamed the federal government for impeding the ability to deliver energy.