Senate Finance Committee members told Secretary of Energy James R. Schlesinger, Jr. yesterday to stop dreaming about a standby gasoline tax and instead get behind a crash program to subsidize development of alternative fuel.
Schlesinger went to the Senate committee to ask that it put back some pieces of President Carter's energy program cut by the House. Schlesinger wanted the tax on purchase of gass-guzzler cars strengthened to require more miles per gallon, and exemptions from the industrial use tax on oil and natural gas reduced. He asked again for the standby gasoline tax, killed in the house that could go to 50 cents a gallon in 5-cent annual steps if motorists went beyond specified consumption goals.
In an efford to prevent energy taxes from having an adverse impact on the economy, Carter proposed to rebate all of them. Revenues from the standby gas tax, if it ever took effect, would be rebated to the entire population on a per-capita basis.
"Even to infant babes?" asked Sen. Herman E. Talmadge (D-Ga). To anyone claimed as an exemption, said Schlesinger, Sen. Spark M. Matsunaga (D-Hawaii) said the proposed gasoline tax rebate to drivers and nondrivers alike was a "welfare program . . . a nightmare."
Chairman Russell B. Long (D.-La.) said it made no sense to tax the use of energy and then hand the money back. There would be no inducement to save, he said. He said he expects that the standby gas will not survive in the Senate.
Long indicated he would support efforts to tighter the gas-guzzler tax, but kept saying, as did other members, that more stress should be put on production of alternative fuels such as shale oil and geothermal and solar energy.
Long said there is enough energy in shale oil locked in rocks and geothermal heat deep in the earth to to provide U.S. energy needs for hundreds of years if the country will just to get it. Schlesinger said those would be bountiful sources for the future but "the new technologies are not here yet." There will not be substantial commercial yields from those sources by the President's 1985 target date for saving 4.5 million barrels of oil a day, he said.
Long said the government should be subsidizing rapid development of shale oil.
"It's just a step away," he said. "It's my impression you'll make more progress by putting a subsidy into it than normal research and development. We should pass a new law saying we'll provide whatever is needed - say a 50 per cent subsidy. I think the price would come down very rapidly."
The oil industry is fighting for a plowback payment to producers of part of the proposed wellhead tax on oil. The industry says such payments would encourage exploration for new oil. The administration strongly opposed that as a giveway to producers.
"I'd like to see us increase tax advantages to get the job done," said Long. "Some people are scared to death someone's going to make a profit. We ought to hope someone does make a profit or we're going to stay in this mess forever."
The oil wellhead tax, scheduled to raise domestic prices to world levels in three annual stages as a conservation measure, also would be rebated to the public under the administration's plan.
Long said he preferred that it be used to encourage production of oil and other fuels.
He proposed that the tax take effect in two years rather than three, presumably to get the exploration aid money flowing sooner.
Schlesinger told reporters later he believed the Senate would reject decontrolling the price of natural gas, as the House did. He said he opposed a plowback to oil producers but would consider proposed subsidies for alternative fuels on a case-by-case basis.