As the familiar rite of a Senate battle over legislation to deregulate natural gas prices raged last week it was clear that little had changed in a generation.
Anti-industry forces led by Sen. Howard M. Metzenbaum (D-Ohio) used the same arguments Harry S. Truman did in vetoing a deregulation bill in 1950 that Speaker Sam Rayburn (D-Tex.) personally pushed to a winning vote on the House floor.
"To withdraw entirely from this field of regulation, however, impelled only by imaginery fears, and in the face of a record of accomplishment under the present law which is successful from the standpoint of the consumer, distributor, carrier, and producer alike, would not be in the public interest," Truman's veto message said.
Rooted in the 1938 Natural Gas Act, the chronicle of the fight over the Federal Power Commission's authority to regulate interstate gas prices has always been at the center of the country's political and economic debate of the energy question. It is a story laced with a dramatic Supreme Court decision, battalions of oil industry lobbyists, consumer champions, and what must be one of the most famous bribes in American history. Then, as now, it all added up to highstakes congressional politics.
Ironically, when President Roosevelt signed the Natural Gas Act into law, oilmen considered selling natural gas at any price a windfall. The fact was, natural gas, which now heats 55 per cent of America's homes and is industry's most important fuel, was considered a nuisance to be flared off by burning or simply left in the ground. This changed as gas replaced coal as the pivotal fuel after World War II.
During the 1940s most FPC commissioners held that Congress had never intended that they should set interstates rates. The industry did not consider the rate question a problem, except fears that one day the FPC would start setting prices as gas demand grew. In 1947 Rep. Ross Rizley (R-Okla.) introduced the first bill to limit the FPC's power to regulate gas prices. It passed the House but died in the Senate.
"It was a case of negative paranoia," says Edward Falck, who was then chief energy adviser on Truman's National Security Resources Board and a veteran of energy legislative wars.
The now predictable voting lines were etched into place. Producing states such as Kansas, Texas, Oklahoma, Louisiana, Mississippi, and Arkansas were for "dereg," as oilmen call it. Northern consuming states led by urban Democrats, especially from New England, were against it. Natural gas votes are a near legacy in some states, passed on with the seat.
Bill after bill was introduced, beaten or tabled until Truman vetoed the first deregulation bill to reach the White House.
More bills followed until 1954 when the Supreme Court ruled 5 to 3 in the landmark Phillips Petroleum case that the FPC had jurisdiction over gas sales to interstate pipelines. One oddity in the court's findings oil lobbyists never tire of pointing out is that liberal Justice William O. Douglas dissented. Douglas wrote "We are tampering with things about which we have very little knowledge."
Both houses passed a gas bill in 1956 that foundered on what a major oil company executive years later called "The most expensive bribe the industry offered." Sen. Francis Case (R-S.D.) made a speech on the floor saying that an oil lobbyist, Elmer Pattman, had offered him a $2,500 contribution in exchange for industry support. This was too much for President Eisenhower who - although he favored the bill - vetoed it on Sherman Adams' advice. Adams advised that election-year politics was more important than gas.
The stakes escalated in 1968 when the United States began using more natural gas each year than it produced and prices soared.
Presidents Ford and Nixon made attempts at deregulation and failed. But Congress has always been the main arena and industry knows it, rallying to promising advocates such as Rep. Robert Krueger (D-Tex.).