The Carter administration, trying to salvage the president's proposed excise tax on crude oil, has offered domestic oil producers billions of dollars in special concessions between now and 1966 in return for their support of the tax.
Energy Secretary James R. Schlesinger told independent producers that if the industry were successful in pushing through the tax legislation, the White House would take a series of administrative steps that would guarantee the companies added revenues.
At the same time, according to sources, Schlesinger warned that if the producers and Congress do not accept the crude oil tax, the White House would restrict its administrative aid so the industry would net no more than $6 billion between now and 1986.
The proposals were outlined by Schlesinger in separate meetings with independent oil producers on April 4 and April 10. Also attending were Reps. Al Ullman (D-Ore), chairman of the House Ways and Means Committee, and Thomas L. Ashley (D-Ohio), House energy coordinator.
The substance of the Schlesinger proposals was confirmed by several participants and by sources from the administration, key congressmen and the industry.
The crude oil tax is one of a number of steps Carter has proposed to drive up the price of oil, discourage its consumption and reduce costly imports. The administration has called the crude oil tax the centerpiece of its plan.
When the tax was first proposeds last year, the industry said it would support the tax only if it could keep part of the proceeds to finance increased exploration, under a so-called plowback provision.
Carter wanted to rebate all the proceeds to the consuming public, so the tax would not reduce purchasing power and retard economic growth. He also declared that oil company revenues were already ample, and denounced the companies as greedy.
Even last year, however, Carter energy advisers were letting it be known they might be willing to give the industry increased revenues in some other way. In particular, they indicated a willingness to rewrite some of the government's complicated oil pricing regulations so that more oil would fall in higher price categories, and less would be held at lower price levels.
It is a variant on these Proposals that Schlesinger is now reviving as a way of moving the crude oil tax out of the House Senate conference committee where it is now stalled. If the Schlesinger plan worked, the president would get his tax and the industry would get its money, both at the same time.
News of the Schlesinger move angered liberals on the conference committee. Rep. Toby Moffett (D-Conn.) issued a statement several days ago calling the proposals "an insult to a Congress that must vote on most of the 'goodies' he's so generously proposing to hand out."
It may not work, however,Sen. Russell B. Long (D-La), chairman of the Senate Finance Committee and the key figure in the energy conference, said yesterday the crude oil tax "is in so much trouble that we probably couldn't pass it under any sort of circumstances."
According to sources, the Schlesinger proposals include:
An indication that the administration might move toward full decontrol of oil prices by 1985 - the same year natural gas prices would be decontrolled under companion legislation - by adopting a so-called "decline curve" that would classify proportionally more oil in the controls-free category.
Suggestions that the White House might revamp definitions of so-called "new-new" oil to allow it price to rise to world levels immediately, rather than being phased in gradually as Carter proposed.
Removal of price controls on oil produced from "tertiary recovery" - using detergents to loosen the oil from rock - as well as higher prices for so-called "marginal oil."
Schlesinger reportedly also pointed out that if the energy tax bill is not enacted, producers will lose a provision added by the Senate that would give them back a tax break they lost in 1976, involving intangible drilling expenses.
Sources in and out of the administration said the meeting broke up with no commitments by the industry. A large factor in the stalling of the crude oil tax in the conference committee has been industry opposition.
Between now and 1985-86, government estimates show, the Schlesinger plan would add $28 billion to $35 billion to the industry's revenues beyond what producers would get if present prices were allowed to rise only to compensate for inflation.
Producers would get some of this added revenue anyway, however, under existing law. Exactly how much extra the Schlesinger variations would give them is not completely clear; experts in government and industry agree only that it would be in the billions.
If the crude oil tax does not pass, the government would give the companies price increases for tertiary recovery and some "marginal" wells from which oil is expensive to pump. But this would be all, and would add up to only $6 billion, according to several accounts, including a memo circulating within the industry summarizing what Schlesinger proposed.
The energy conferees have been hung up since last fall, first over whether to lift price controls from natural gas or leave them on as Carter prefers at a higher level than now, and second over the crude oil and other taxes Carter wants and the House approved but the Senate did not.