Sen. Henry M. Jackson (D-Wash.) said yesterday after three days of meetings that a group of Senate energy conferees of differing views has reached "agreement in principle" on a plan that would gradually deregulate the price of natural gas.
To translate this into a specific proposal would be only a first step in a long process that involves selling it to a majority of Senate conferees, House conferees and then the full House and Senate.
Nevertheless, if it represents real agreement, it would be the first break in the stalemate that has delayed President Carter's omnibus energy bill since House and Senate conferees first started discussing the natural gas issue around last Thanks-giving.
Jackson, leader of the Senate conferees, wouldn't discuss details. Some of them have not been agreed to. But the main outline provides for gradual removal of price controls from newly discovered natural gas over a period of about seven years, in an effort to encourage the industry to find and produce more gas to avoid shortages. The president or Congress could reimpose controls for two years if prices rose too high.
A House observer who was filled in on some of the provisions predicted that Jackson's package would cost consumers more than a plan put together by House Democratic conferees and Sen. Bennett Johnston (D-La.), which was rejected just before Christmas by all 18 Senate conferees except Johnston and Wendell Ford (D-Ky.).
Carter had proposed continuing price controls and extending regulation into the intrastate market, which (See ENERGY, A6, Col. 1) (ENERGY, From A1) is now free of controls. He would have raised the ceiling price of new gas from the present $1.43 per thousand cubic feet (MCF) to $1.75 and then let it rise with inflation. The House energy bill generally concurred, but the Senate went with the industry in voting to end controls on new gas after two years.
The administration said deregulation would cost consumers an extra $70 billion or so by 1985. The Johnston phased deregultion plan that failed was priced at about $13 billion more than the House bill.
The Senate conferees are deadlocked on the issue of continued price controls versus deregulation. Until a majority can agree on a compromise and the president's energy bill are stalled.
Six senators, including Jackson, favor continuing controls but are willing to compromise to settle the 24 year issue and get a bill. They have been trying for weeks to reach an agreement with senators favoring deregulation such as Johnston and Ford and Republicans Mark Hatfield (Ore), Pete Domencie (N.M.) and James McClure (Idaho). For the last three days Jackson has met with this group.
Some are less optimistic than Jackson, but all except Johnston indicated they felt agreement can be reached. If those four sign on. Jackson would have a majority of 10 and the conference could get on with its work.
A number of issues being discussed are interrelated and one can't be nailed down until others are agreed to, said Jackson.
For instance, the proposed starting price ceiling for new gas, compared to the $1.75 in Carter's year-old plan, would be $1.84 to $1.88 depending on the rate by which the price is permitted to increase each year deregulation.
Proposasls for the annual price escalator include: the rate of inflation plus 3 or 4 percent: a variable figure that would be more in early years and less later; or the reverse.
Jackson has been carefully duing the weeks of negotiations never to say the group hadreached an agreement of any kind. His optimism yesterday apparently was caused by accord on issues of importance to the industry but not much known to the public, such as the definition of new gas that would qualify for the higher price and eventual deregulation.
One report was that the definition of new gas would include any gas from wells not previously put into commercial production. That could include gas from capped wells, whose owners had found gas but sat on them waiting for the price to go up.
Carter's ambitious energy package to lessen dependence on foreign oil by 4.5 million barrels a day was launched last April as his top legislative priority. The House passed the package of taxes, rebates and regulatory tools pretty much as he requested. But the Senate rejected nearly everything, notably his natural gas plan and a tax on domestic crude oil that he called the centerpiece of his conservation program.
A separate group of conferees trying to resolve the tax issues are in recess waiting for a natural gas agreement. The administration thinks that once gas is settled it will be easy to push through an acceptable tax compromise. But a growing antitax climate created by the big Social Security increases may make the crude oil tax make more difficult to enact than natural gas deregulation.