The nation's "small" oil refiners are busily lobbying in the Senate to keep an $800 million annual subsidy that they enjoy under current law but would lose under President Carter's House-passed energy plan.
Some of them have enlisted the help of former Senate Finance Committee Democrat Vance Hartke, who stayed here rather than return to Indiana after being defeated for re-election last year. Hartke, refinery association lobbyists and teams of small refiners have descended on the Finance Committee in the last two weeks, seeking perpetuation of their present advantage.
At stake is the so-called "small refiner bias," a subsidy worth up to $2 a barrel that they receive under a government program to equalize the price refiners pay for oil.
The difference in the price of crude comes about because so-called "old" domestic oil sells for about $5.25 a 42-gallon barrel, while "new" domestic and foreign oil sells for prices ranging up to about $13.50, the current world price.
The bias, administered under the Federal Energy Administraion's complicated "entitlements" programs, was established in 1975 to ensure that small refiners would remain competitive.
Carter's plan and the House energy bill, however, would eliminate the entitlements program - and along with it the bias. Instead, the Carter and House plans would equalize what refiners pay by imposing a tax sufficient to bring all crude up to the world price. The tax would be phased in over a three-year period.
The House has voted to order FEA to study the small refiner problem and make recommendations to Congress before the entitlements program is eliminated.
Administration officials, including Energy Secretary James R. Schlesinger Jr. and FEA head John F. O'Leary, are "very much opposed to efforts by Hartke and others" to enact a version of the current bias into law now, according to a spokesman.
Currently relief is provided to refiners with capacitiers up to 175,000 barrels a day. According to industry and congressional sources, Hartke has been lobbying his former colleagues to support legislation that would provide relief to refiners with capacities of less than 15,000 barrels a day when the crude oil tax is phased in. "He has been around and talking to a lot of senators," said one congressional source.
Hartke, in a telephone interview , refused to identify his clients. "It is a confidential lawyer-client relationship," he said.
The heaviest lobbying, however, is being handled by the small refiners' trade groups: the American Petroleum Refiners Association, Independent Refiners Association of America, and the Independent Refiners Association of California.
APRA head Frank Wood Jr. says the lobbying battle is over the "mechanism that would continue the offset under the small refiner bias," adding that his group has not called for specific subsidy benefit levels.
"The small refiner is being pictured as a guy who abuses the regulations and receives unwarranted federal benefits, and that is not the case," Wood says.
Schlesinger's staff argues that the current small-refiner subsidy is too high and has resulted in a proliferation of "teapot" refiners. Most of the 38 refineriers built since 1974 are 20,000 barrels a day or less and were built, FEA's Lisle Reed says, "to get in on this small refiner bias action."
The options facing the Finance Committee range from granting a full or partial exemption from the crude oil equaliZation tax - giving the small refiners all or part of the existing subsidy - to deferring action as the House did until an analysis of the existing subsidy is completed.
A number of key members, including Chairman Russell B. Long (D-La.) and Bob Dole (R-Kan.), have expressed a concern for preserving the small refiners' viability.The panel is expected to vote on small refiner amendments later this week.
Asked about the likely outcome, one key congressional observer said the small refiners always did well politically in the past because "it was a choice between hurting the small refiner or the major oil companies. Now it's the small refiner versus the taxpayer."