When Jimmy Carter was campaigning for the presidency, he expressed doubts about proposals to legislate a breakup of the major oil companies to end their control of the business from the well to the gas pump. At the same, he looked favorably upon proposals to require them to divest ownership of coal and other competing fuels.
Last April however, in his "moral equivalent of war." Speech and his National Energy Plan, the president said that a thorough financial accounting system," closely monitored" would determine whether there was a need for either form of divestiture.
With an administrative order, Carter said, energy companies would be compelled to disclose oil costs and profits segmentally, that is, "for production, refining, distribution and marketing - separately for domestic and foreign operations." Similar strict accounting would be required for competing fuels.
Some assumed the disclosure would be public, although the president did not say it would be. It turned out that the companies would report confidentially to the new Department of Energy.
Others assumed that DOE, headed by James R. Schlesinger Jr., would share the energy data with other federal agencies, particularly the Internal Revenue Service, and the Justice Department and the Federal Trade Commission, which share responsibility for enforcement of the antitrust laws.
In an official notice in the Federal Register in January, however, DOE suggested that if "confidential energy data" were to be used for "investigatory and prosecutorial purposes . . . the primary purpose of the DOE information system would be seriously jeopardized."
Accepting the invitation in the notice to comment on whether DOE should share the data, chairman Edward M. Kennedy (D-Mass.) of the Senate Antitrust and Monopoly Subcommittee told Schlesinger, in a letter released Friday:
"In short, tax and competition considerations are inescapably part of any rational energy policy. That the Department of Energy would ever entertain denying the expert agencies relevant data bodes ill for the future of energy policy."
A DOE press officer, telling a reporter the issue was "important," referred him to a top aide to Schlesinger. The aide did not reply to the reporter's queries.
DES's proposition that antitrust and tax questions are at "the periphery of energy policy" is "untrue as a matter of law because Congress has declared that a primary duty of . . . DOE is to promote and strengthen competition," Kennedy said in the letter, dated Feb. 17. It is also, he said "factually untrue" and an "appalling delusion."
He cited IRS rulings that save the major oil firms billions of dollars by treating royalties paid for producing oil as foreign "income" taxes, the aborted criminal antitrust prosecution of the seven largest firms in the 1950s, and the close relationship between those firms and the cartel of oil-exporting countries.
Moreover, Kennedy said, the National Energy Plan's "key proposal" is a tax, and its proposal for dealing with competitive questions is "the establishment of a data system - supposedly for the 'primary' purpose of making competition policy."
Kennedy also protested "the proposition that a bargain must be struck with the energy companies in order to get their cooperation." He said there is "no question" about DOE's ability to compel disclosure.
And, he said, "a reliance on 'cooperation' leaves the data program at the mercy of the companies. If they can hold it hostage in order to frustrate tax or antirust policy, why not other policies?"
In a related development on Jan. 24, a reporter asked Schlesinger at a press conference about a proposal by Rep. Morris K. Udall (D-Ariz.) to prevent oil companies from obtaining coal leases on federal lands.
"The administration does not favor at this time horizontal divestiture or these kinds of activities that you have indicated in the Udall proposal," the secretary replied.
"Until such time as there is clear evidence, which no one has yet presented, of a detrimental effect on the coal market, the administration would not endorse such an approach."