A majority of Senate conferees agreed yesterday on a plan to remove price controls from new natural gas in seven years; a step that could finally free President Carter's energy bill which has been stalled in conference for 3 1/2 months.
Nine of the 17 Senate conferees announced their support of a compromise worked out last week and one or two more may join before they resume the formal conference with the House to work out their differences.
Sen. Henry M. Jackson (D-Wash.), Senate Energy Committee chairman who has conducted dozens of meetings since mid-January in an effort to break the stalemate, said he will explain the gradual deregulation proposal to House conference leaders today. The proposal is not basically different from a plan that House conferees accepted just before Christmas but which the senators rejected.
One Senator, who asked not to be identified, said the proposal would cost consumers about $15 billion more by 1985 than the House bill, which would continue regulation as the president has requested. But the Senate bill, which would have lifted price controls after two years, was estimated by the administration to mean up to $70 billion in higher prices.
"If I had my druthers, I wouldn't draft this bill," said Sen. Dale Bumpers (D-Ark.). "But compared to the alternative of doing nothing and letting the government raise the price ceiling to this same level without the power to allocate intrastate gas" in an emergency "it's not bad."
Carter's omnibus energy bill, which he sent to Congress last April as his most urgent legislative package, has been held up waiting for a solution to the natural gas pricing issue. And the has been waiting for agreement on a proposal by a majority of the Senate conferees, who had been deadlocked on the issue since Thanksgiving.
The administration hopes that once the natural gas issue is settled, the tax part of the program, especially the tax on domestic crude oil, which Carter calls the centerpiece of his program, will quickly fall into place. The House passed the crude oil tax. The Senate rejected it.
But Sen. Russell B. Long (D-La.), Senate Finance Committee chairman, said he told the president at lunch yesterday that "in my view the crude oil equalization tax could not be pased by the Senate, as of now, under any imaginable set of circumstances . . . I feel that they are beating a dead horse when they are talking about the crude oil tax. I tried to tell the administration that if we passed that Social Security increase, the public would be so tax-conscious that it would be very difficult to pass another tax increase of any sort."
The plan, which the nine senators have now approved, would raised the price ceiling in newly discovered natural gas from the present $1.48 per thousand cubic feet (MCF) to about $1.85 per MCF now. For the next four years it would rise at the rate of inflation plus 3 1/2 percent. From then to the end of 1984 it would rise at the rate of inflation plus 4 percent.
Price controls on new gas would expire at the end of 1984. But either the president or Congress could reimpose controls for one two-year period if prices rise too high.
Both House and Senate bills sought to protect residential consumers from initial price increases by providing that industry and other low priority users would absorb all price increases until the price of gas reaches the level of substitute fuels such as heating oil, which now sells at the equivalent of about $2.60 per mcf. The Senate agreement would postpone this for up to one year.
The agreement would extend price control to instrastate gas, consumed in the state where produced, but it could be allocated to other regions only during an emergency.
Six Democratic senators and three Republicans announced their support for the plan yesterday. They wear Jackson, Bumpers, Frank Church (D-Idah.) and Spark M. Matsunaga (D-Hawaii), who had voted with the president to continue price controls, and five who had voted for deregulation.Those were Democrats J. Bennett Johnston Jr. (La.) and Wendell Ford (Ky.) and Republicans Pete V. Domenici (N.M.) James A. McClure (Idah.) and Mark O. Hatfield (Ore.), Democats Floyd Haskell (Colo.) and John Durkin (N.H.) had reservations but may yet go along.
Domenici said the three Repubicans considered the proposal a "reasonable compromise." They reported it to the four other Senate Repubican conferees yesterday afternoon but couldn't get any of them to go along.
The Senate majority appears solid for their plan, but the Republicans warned that if the House conferres insist on basic changes, the long effort to get a gas pricing solution could collapse.
I have worked hard on this," said Domenici. "If the basic principles are retained I think we have a gas bill for the country that will encourage production and protect consumers. If major changes are made, we reserve the right to say it's all over with."