The Department of Energy will move shortly to lift all price controls on gasoline at the pump.
Each chamber of Congress will have 15 days to veto the proposal once DOE sends it to Capitol Hill, probably this week or next. If neither the House nor the Senate disapproves, the plan goes into effect.
Gasoline is in plentiful supply at the moment and is generally selling below the current price ceiling. The department says its deregulation plan is not expected to result in any immediate increase.
But the proposal has set off spirited opposition from consumer and environmental groups, who believe it will increase the difference between prices for leaded and unleaded gasoline, which they say will mean greater use of dirtier leaded gasoline.
DOE spokesman James Bishop confirmed yesterday that the department will send the deregulation proposal to Congress shortly. The plan also would do away with allocation of gasoline, which has not been needed during the current surplus.
An internal "environmental assessment" of the proposed move done by DOE's Economic Regulatory Administration and made available to The Washington Post by a consumer group indicates that DOE 'has concluded that continued price and allocation controls on motor gasoline are no longer necessary to assure adequacy of supply."
The document also says that DOE anticipates gas prices would rise "up to 1 cent per gallon over time" under decontrol.
One advantage of deregulation, according to the DOE memo, would be to encourage refiners to invest in facilities that produce gasoline with lower lead content to meet continuing Environmental Protection Agency clean air requirements.
But the EPA is not convinced that deregulation would help its cause.
Both the EPA and the Center for Auto Safety, the consumer group that uncovered the DOE memo, have expressed reservations about the DOE plan.
Ben Jackson, EPA director of mobile source enforcement, said yesterday EPA fears that decontrol will lead to more fuel switching. This occurs when the owner of a car that is supposed to take unleaded gasoline instead buys leaded gasoline because of a large price difference. It is illegal to use leaded gas in cars designed to take unleaded gas, but many motorists do so anyway by removing a restraining device at the entrance of the gas tank.
"We think that the price difference that now exists at the pump between leaded and unleaded is a motivator for people to switch," said Jackson. He said recent EPA studies put the number of fuel switchers at "around 10 percent of all unleaded gas users."
The more people use leaded gasoline the dirtier the air become, Jackson said.
Jackson said that although unleaded gasoline costs about 1.5 to 2 cents more to produce than leaded gas, the difference in prices between the two at the pump are as much as "8 or 9 cents," causing many people to switch to leaded gas.
Jackson, and Clarence Ditlow of the Center for Auto Safety both said the price of unleaded gasoline is already at or near the maximum controlled price, while leaded gasoline is selling far below. They contend the situation could worsen under decontrol.
Ditlow wrote a letter late yesterday to Energy Secretary James Ray Schlesinger, saying that the center "is shocked" that Doe has decided to recommend decontrol without first undertaking an environmental impact statement. He charged this was a violation of the National Environmental Policy Act.
He said the use of leaded gasoline in autos equipped with catalyst [which are only supposed to take unleaded] "will poison the catalyst and cause an emissions increase of to 70 percent from the catalyst-equipped fleet." Ditlow pointed out that his opinion was shared by EPA deputy assistant administrator Norman Shutler, who made the same comment before Senate hearings two months ago.
Jackson said he, too, was concerned about Doe's failure to do an environmental impact statement. "We want to make sure we are not running risks, and we think they haven't done the kind of analytical work they need to do. The questions that have to be answered represent the whole purpose of an environmental impact statement."
DOE's Bishop said the department had determined that an environmental impact statement was not necessary under the law.
Ditlow said that decontrol also would cost consumers "$1 billion for every penny per gallon increase in price."
On his last day in office January 1977, President Ford transmitted a similer decontrol proposal to Congress, but before Congress voted on it, President Carter withdrew the plan for "further study."