On Dec. 6, a skilled, well-informed Washington insider serving as energy-bill intermediary between industry and the administration delivered this warning to Energy Secretary James Schlesinger. Without some step toward natural-gas deregulation, you will probably end up with no energy bill at all.
Two days later, conferees on the energy bill began moving ever so gingerly toward phased deregulation that could break the long impasse and produce an acceptable bill early next year. But many liberals - who have accused Schlesinger of selling out to the oil industry - want no loosening at all of the government's regulatory reins.
The decision rests with Jimmy Carter, who as candidate pledged gas deregulation and as President promised to veto gas deregulation. In this as in other issues, he is sensitive to the demands of the left. But having declared that success or failure of his first year depends on passage of the energy bill, Carter may have to risk liberal outrage.
Actually, had President Carter come to grips with this choice earlier, he might already have an energy bill. Business lobbyists could smell a traditional compromise.
Indeed, Schlesinger was talking compromise in his now-famous news conference of Nov. 21 when he told about giving ground. His partial intent was to attract a critical backfire from the liberals, which in turn would frighten the industry toward greater compromise. But the backfire also seemed to frighten the President a little.
Carter received a delegation of angry House liberals, led by vocal young Rep. Toby Moffett (D-Conn.) on Dec. 2. From that point, the mood changed. The President appeared apprehensive about losing liberal support in Congress and the nation.
As a result, industry spokesmen lost interest in compromise. One corporate executive who had organized a business coalition in support of an energy bill quietly gave up. The word from Detroit was renewed disdain for the bill. Of major oil producers, only Exxon was still engaged in trying to get a bill; the rest (with the possible exception of Gulf) felt no bill was better than a bad bill.
On that note, the influential go-between addressed this memo to Schlesinger. The administration appears less interested in compromise than in ramming home the House version of the bill.
What's more, the memo made clear that concessions to industry on the industrial users tax would not be enough to mobilize industry support for the crude-oil equalization tax or the bill as a whole. Something more would be needed: a ray of light at the end of the deregulation tunnel.
Herein lies a political fact not fully perceived at the White House. The oil industry is far less interested in achieving a high regulated price on natural gas than in a legislative commitment to get the regulatory hand off the industry entirely. Not motivated solely by simple greed as the liberals contend, the oil and gas men would rather live with a lower natural-gas price for the present if they see real deregulation in their future.
On Dec. 7, a narrow chink was found in secret negotiations between two conferees. Democratic Sen. Bennett Johnston of Louisiana (pro-deregulation) and Democratic Rep. John Dingell of Michigan (anti-deregulation. Those talks opened the possibility of deregulation for newly discovered gas after five years with an escape hatch permitting the President to reimpose controls in case of emergency.
That is clearly intolerable for the liberals, who would prefer no energy bill at all. But whether Moffett can summon many more than 70 out of 435 House members to vote down any bill containing a whiff of deregulation is doubtful. "I've never considered the Toby Moffett threat all that real," one Schlesinger Lieutenant told us, reflecting the views of his chief.
But what does the President think? His switch from deregulation advocacy to opposition suggests lack of doctrinaire thinking. Yet, nobody in this city can be sure he will accept even a watered-down, stretched-out deregulation as the minimum price of a bill. After almost 11 months in office, Jimmy Carter remains that much of a mystery.