For all the failing he did at the oil industry yesterday, President Carter has already signed a willingness to move more than half way on the only two issues the oil companies really care about.
The price of natural gas and what to do with the money that will come from raising the refinery price of domestic crude oil.
Carter originally proposed a regulated price of $1.75 per thousand cubic feet for all natural gas discovered in the future. This compares to a present price of $1.47 for gas gold in interstate commerce, which is subject to federal price regulation, and about $2 for gas burned in the same state where produced which is not subject to federal control.
Instead of Carter's proposal the Senate voted after a filibuster to remove price controls from all gas over the next several years.
But before that vote, Carter emissaries were supporting a compromise that would raise the regulated price to $2.03 - and that is almost the same as the industry would get without regulation.
The same thing is true of oil.
Under present law, oil produced in this country - like natural gas - falls into two price categories. So-called old oil is limited by federal controls to about $5.25 a barrel, while new oil from wells drilled since 1972 sells for about $11.25.
Carter proposed a wellhead tax to lift the refinery price of all oil to $11.25 and beyond to the world of imported oil price of about $12.50.
The industry wants the proceeds from this tax returned to producers to finance increased exploration. Carter resisted this in the House, in favor of his alternative proposal to rebate the proceeds to the public.
But in the Senate Finance Committee his emissaries offered another compromise when it became clear the he was losing. They offered to redefine old and new oil so more would fall each year into the high-priced "new" category. That would have the same end result as the alternative backed by the industry - raising the price through taxes, then rebating all or part of the proceeds to producers.
Carter gave no hint in his remarks at his news conference yesterday that he had already bent part way toward the industry's positions. Instead he lashed out at the companies as if there were only two positions - his and no middle ground between.
The companies claim they need higher prices - what they like to call the free market price, or the world price - to pay for the increased risk-taking and investment they say it will take to satisfy U.. energy demand in the future.
Administration experts say that prices have risen enough already, and yesterday Carter added a powerful twist to his side of this argument. He said the oil companies are outside the free market system, that the price of oil is not set by the free interplay of supply and demand, but instead is administatively fixed by the Arab and other oil-exporting goverments and by the big oil companies themselves.
"Prices are not free," Carter said. "They are heavily influenced by decisions made outside our country, by the OPEC [Organization of Petroleum Countries] nations, and they are heavily influenced by some control over the rate of production by American companies."
Having said that, Carter also backed down when asked at the news conference whether he might now endorse divestiture legislation to bereak up the oil companies.
What of his charge that the companies are so large and dominant as to be able to set prices?
Statistics on both production and refining of crude oil indicate at least that the largest companies have substantial market shares and presumably market power. In 1974, for example, the four largest domestic oil producers - Exxon, Texeco, Mobile and Gulf - had 31 per cent of all production; the eight largest had 54 per cent; the 20 largest, 76.9 per cent. Critics say the giant companies use their market share to manipulate prices; the companies reply that many other basic industries - autos, steel and others - are a great deal more concentrated than oil.
Carter also spoke about enormous increases in oil industry prices and profits.
Even with price controls on domestic production, the average price of oil consumed in the United State has risen from over $3 to over $8 since the oil cartel quadrupled the world price 1973-74.
Natural gas prices have increased 445 per cent since the early 1970s - a jump from 26 cents per thounsand cubic feet to $1.74 today.
Oil industry profits have kept pace. During the first half of 1972, the 21 largest oil companies earned $2.8 billion. During the first half of 1977 their combined net income stood at $5.7 billion - an increased of over 100 per cent.
Yet during this period natural gas production has continued to declined and barring new production from Alaska, U.S. oil production has fallen every year.