House and Senate energy conferees formally rejected each other's proposals for natural gas pricing yesterday and then quit for the day to search for new way to resolve their wide differences.
The House group voted 15 to 8 to reaffirm support of President Carter's proposal, which the House approved, to continue price controls but at higher levels than now and extend regulation to intrastate gas. The Senate group, however, is split 9 to 9 between Carter's plan and lifting price controls from newly discovered gas, which the Senate approved.
Carter's supporters among the Senate conferees met yesterday afternoon and came out talking about the possibility that there won't be a gas bill unless the industry agrees to intrastate regulation and a uniform price ceiling not much above Carter's proposed $1.75 per thousand cubic feet (mcf).
The threat of no bill may be just part of the game of "chicken" that is part of every tough conference between the two bodies. But, although the nine Carter supporters on the Senate group can't force an agreement with the House, they can block one. Unless 10 senators get behind some proposal and then reach agreement with the House there will be no natural gas bill. Billions of dollars are involved in the various versions of this legislation.
Natural gas piped across state lines is regulated at a current ceiling of $1.46 per MCF while gas consumed in the state where produced is not controlled and sells for more. The result has been that producing states such as Texas have gas available for every possible heating purpose while there were shortages that closed schools and factories in some northern states last winter. Carter would wipe out this distorted dual market and imposed a uniform price ceiling starting at $1.75 per MCF and moving up with inflation. The industry has tried to end federal price controls for 23 years.
The House approved Carter's proposal to continue controls at higher levels for newly discovered gas but relaxes the definition of new gas eligible for this higher price to get the bill through the House. The Senate voted to continue controls for two years with a fluctuating celing that would now be $2.60 per MCF and then to lift controls from new onshore gas and to deregulate new offshore gas after five years. It approved an even looser definition of new gas than the House.
The House conferees reaffirmed their position without debate. 15 to 8, yesterday morning as soon as the conference met. The Senate tied, 9 to 9, on accepting the House bill, and then, after running over some of the old arguments, the conferees quit for the day.
Henry M. Jackson (D-Wash.), leader of the Senate conferees and a supporter of Carter's regulation plan, said his nine will have a proposal for consideration by Senate conferees today.He said it would involve the issues of price and intrastate regulation, and indicated it would not vary much from the President's plan.
Sen. Howard M. Metzenbaum (D-Ohio) said he would not support anything more than a "minuscule" increase above Carter's $1.75 per MCF. Jackson said he won't give way on getting control of the intrastate market, which is 40 per cent of national consumption and is an issue of intense interest in the industry, which wants it kept free of regulation.
Metzenbaum and Sen. John A. Durkin (D-N.H.) said it is for the gas industry to decide whether it will accept a bill along the lines proposed by Carter and would prefer no bill at all. That would leave the industry in control of the intrastate market where gas is selling at a little more than $1.90; but would keep a lower ceiling on interstate gas.