At one point in the caustic debate, Rep. Richard Ottinger (D-N.Y.) warned of the punishing, retaliatory warfare that might break out if Congress slaps down the East Coast's hopes of higher subsidies for the oil it imports.
The animosity, Ottinger suggested, is building up. Yankees, he lamented, have already been made the butt of bumper stickers reading, "Let the Bastards Freeze to Death."
Rep. W. Henson Moore (R.La.) interrupted with a gleefully voiced correction. "They say, 'Let 'Em Freeze in the Dark,"' he informed Ottinger.
The prospect of regional bloodletting on the floors of the House and Senate is only one of the potential costs of the legislative riders looking for a seat on the jumbo $10 billion civilian authorization bill for the Department of Energy.
Some of those other "policy amendments" could be far more damaging. Always acting in the name of the "little guys," the "independents," and the "small retailers," influential segments of the oil and gas industry have already succeeded in getting special provisions tacked on to the Senate or House versions of the bill.
According to Energy Department experts, one of the riders, approved by the Senate Energy Committee last Wednesday with barely any discussion, is especially alarming, "a repulsively bad piece of legislation" in the words of one government lawyer.
Known as "Findley No. 2," it would apparently shelter a still undetermined amount of oil industry overcharges and profiteering in the tumultuous period following the 1973 Arab oil embargo by prohibiting the government from making "retroactive interpretations" of federal regulations that were on the books at the time.
In other words, government auditors and lawyers still trying to sort out the confusion of the post-embargo period would be barred from levying any penalties for sins committed in the name of ambiguity.
The amendment was sponsored by Sen. J. Bennett Johnston (D-La.) but was promptly dubbed "Findley No. 2" after Rep. Paul Findley (R-Ill.), the author of a relatively bland original that Congress forgot to re-enact in creating the Department of Energy. It would, on its face, apply just to "independent" crude oil resellers and oil marketers, but that modest description stretches from gasoline stations all the way to the Permian Corp., a subsidiary of Occidental Petroleum, which had sales of more than $1.8 billion last year.
If it passes, "Finley NO. 2," according to one knowledgeable source, will effectively block some "serious civil and criminal actions" now expected within the Department of Energy.
Beyond that, Energy Department officials are worried that the major oil companies such as Exxon and Texaco, which are now undergoing long-overdue audits, might file "equal protection" lawsuits to join the "Findley No. 2" crowd.
"The Office of Enforcement has been feverishly writing memos and letters about this amendment," one informed source said. "At the least, it could cause litigation problems, and at the worst, it could be a serious impediment to enforcement."
Still another legislative proposal - defeated by a narrow 21 to 18 vote in the House Commerce Committee last week but threatening to make a come-back on the House floor - could produce a bonanza worth billions of dollars to the oil industry.
Offered by Rep. Tim Wirth (D-Colo.), this proposal would nullify a complex set of Energy Department regulations limiting the oil industry's ability to "pass through" to its customers all the increased costs for crude oil, residual fuel oil or refined petroleum products since 1973. That opportunity, however, has been restrained by market forces as well as by DOE regulations. Industry accountants have thus built up huge "banks" of unrecovered costs, waiting for a chance to pass them on.
According to Energy Department officials, the Wirth amendment, which is very much like an earlier version advocated by the Champlin Oil Co. of Fort Worth, Tex., would allow the industry to build up those "banks" still further, in ways not previously permitted under DOE regulations. The "banks" could then be used both to justify new price increases and to offset government attempts to order refunds for past overcharges, officials say.
"The proposed statutory language appears to be no more than an attempt by the industry to avoid the consequences of the enforcement program of the department," Energy Department solicitor Carl. A. Corrallo said in a May 3 memo about the Champlin Oil proposal. "The import of a statutory requirements suggested by the industry is to make available huge increased costs (unrecovered because of market constraints, not DOE price rules) as an offset to overcharges made during and after the embargo period. Billions of dollars in banks would be permitted to be exhuasted before any refund to any purchaser could be required."
Beyond that, Corrallo warned in his memo to House energy subcommittee counsel David Finnigan, "the ability to reallocate costs from the banks to justify otherwise unlawful prices would continually be available to slow and frustrate audits of the major refiners which tend to segregate the various categories of covered products for review."
According to House energy subcommittee Chairman John Dingell (D-Mich.), the Wirth amendment would also lead to "rampant . . . price gouding," at the expense of those who can least afford it.
Dingell said, for instance, that the amendment would permit a marketer to saddle homeowners with a disproportionate increase in heating oil prices to keep his industrial customers from squawking.
Despite such shortcomings, which Wirth indicated he would try to remedy before bringing the issue up again on the House floor, the House Commerce Committee actually voted 10 to 9 in favor of the rider before Dingell killed it with proxies, making the final tally 21 to 18.
Some staffers on the House committee at least are worried that the DOE authorization bill could turn into a "Christmas tree" for the oil industry before it moves off the Hill for President Carter's signature. The Senate and House committees are supposed to finish work on the legislation today. The trimmings already include a variety of opaquely worded provisions, from price-monitoring restrictions sought by the National Oil Jobbers Council to a lifting of regulatory obstacles standing in the way of Basin Inc., an independent crude oil reseller headquartered in Texas.
They regard the legislative relief as eminently justified. The Department of Energy, they say, is an incredibly ham-handed bureaucracy, bent on auditing and re-auditing the smaller companies, the easy targets, while ignoring the majors. Oil pricing and allocation rules, they contend, have indeed been turned on their head, retroactively and unfairly. Even David J. Bardin, the chief of the Energy Department's Economic Regulatory Administration, acknowledged at a recent Senate hearing that "over 50 percent of our cases deal with only two percent of our dollars."
Energy Department officials insist, however, that they are making a genuine effort to put those distortions behind them and moving ahead with an unprecedented investigation of all 35 major oil companies. Audits of Exxon and Texaco from 1973 through the end of 1976 are almost done, officials say, and reviews of nine others have been intensified.
"What we're seeing is a very slick propaganda campaign," contends one government lawyer of the efforts to put the post-embargo period beyond reach. "It was a period of terrible confusion. Ambiguous regulations were in their (the industry's) interest then because they could take advantage of them . . . The same people who complain of the complexity and gobbledy-gook of government regulations are the same ones who forced us to put in all that stuff in the name of due process. Then they complain about the staleness of our findings."
Public attention, meanwhile, remains focused on future energy supplies and such widely ballyhooed issues as President Carter's efforts to discourage consumption by raising the price of normal gas and taxing up the price of domestic oil. As for the Department of Energy's authorization bill, most of the fussing so far has been over the administration's illtimed plan to raise the subsidies for East Coast oil imports at the expense of the rest of the country, which would have to pay the higher prices through the intricate entitlements program.
By contrast, the congressional debate over such riders as "Findley No. 2" and the Wirth amendment has been short and cursory. The stakes are worth more than that. "We are talking," says one Energy Department regulator, "about an unbelievable amount of bucks."