The "small independent" oil well operators of the nation and their elected representatives in the House are driving to free from price controls a substantial protion of U.S. oil.
The unexpected campaign, led by House Majority Leader Jim Wright (D-Tex.), could produce a bonanza of more than $3 billion a year for the oil-price of 1 million domestically produced barrels of crude oil a day, tripling the cost of most of it.
Worried about the reprecussions it could pose for President Carter's beleaguered national energy plan, Secretary of Energy James R. Schlesinger and his aides have been lobbying anxiously this week in an effort to block the provision Wright and his colleagues have devised. It is scheduled to come up on the House floor next weeks as a nongermane rider on the Department of Energy's principal authorization bill.
A dry, technically worded proposal, the Wright amendment would broaden the definition of little, so-called "stripper" wells to include substantially larger operations. But beneath the dull language, "it's got everyone excited," says one House aide. "There's going to be a lot of soul-searching this weekend." The reason is that stripper oil is exempt from price controls.
What seems to have Schlesinger most concerned about the Wright amendment, far more than its cost to consumers, is the shattering impact it could have on the Carter energy program.
Especially vulnerable is a House-Senate compromise bill to remove federal price controls from natural gas by 1984. This natural gas bill, which for months was the stumbling block holding up progress on all other parts of the Carter energy bill, was approved by the House conferees in May by a vote of only 13 to 12, and it still awaits their signatures.
Rep. Bob Eckhardt (D-Tex.), who voted for the gas compromise, is hinting that he and perhaps some other conferees might not sign the conference report if the Wright amendment is passed. That would kill the gas bill and perhaps the whole energy plan, but Eckhardt and the others think it would be the industry out from under price controls on gas and oil at the same time.
The question on the Wright Amendment seems to be who's going to blink first. The one-vote margin on gas deregulation "was so percarious" that everyone is particularly nervous about what would happen, said an aide to one of the 42House sponsors of the measure.
For his part, Schlesinger met with Wright for 90 minutes Wednesday and again yesterday in an attempt to dissuade him, reportedly by offering to decontrol by administrative action 20 percent of the oil involved on a fixed timetable. The trouble with that, according to several congressional sources, was that he was widely understood to have made a more generous, albeit vaguer, offer last year in heading off an almost identical campaign.
Wright and his colleagues want more. And they claim to have enough votes to take their bill onto the Energy Department's authorization measure next week.
The majority leader, however, is according to his aides, also worried about the possible fallout on the natural gas compromise. "He doesn't want to do anything to rock the boat on that," said one. "That's his first priority."
As a result, one Wright amendment strategist said, "we've got to decide whether this is a real threat Eckhardt's making or whether to call his bluff."
Eckhardt will say only that he is "aghast" at the "stripper" well exemption under legislative consideration. "This is going to cost consumers $21 billion by 1985", he protests. "That's an eneromous amount of money. If the oil and gas industry want to come in and get a direct benefit like that, it's a different ballgame."
The Texas liberal also said the Energy Department's authorization bill itself might wind up a hostage somewhere between House and Senate if the Wright amendment goes through. Or President Carter might veto it and seek a new authorization measure.
"In the meantime, the Department of Energy would be thrown into chaos," Eckhardt said. But he declined to say what he'd do about the natural gas compromise.
"It isn't my choice," he said. "It's Jim [Wright's] choice."
"It'd take a lot to turn us around," and aide to another one of the House sponsors said of the dickering with Schlesinger. "Right now, we're going full bore."
Under present law, any oil well producing 10 barrels or less a day qualifies as a "stripper." Its owners can charge the world price of roughly $14 a barrel.
Some 365,000 of the half million prouducing oil wells in the United States already qualify as "strippers". Wright's amendment would cover most of the rest, slightly more than 75,000, by broadening the definition to wells producing up to 35 barrels a day.
Most of these larger, would-be "strippers" are old wells discovered years ago, currently limited to a price of $5.45 a barrel, and the rest are limited to $12.15 a barrel. The price of it all could go to $14.
Added to the 1,094,000 barrels a day already qualifying for the "stripper well exemption, this would make roughly 25 per cent of the nation's oil production free from price controls.
Rep. Bob Gammage (D-Tex.), who initiated the drive for the amendment in the House Commerce Committee last spring only to be blocked on a point of order, insisted that his proposal would increase domestic crude production, by as much as 700,000 barrels a day over an eighty-year period.
"If the operators of these [75,000] wells are producing at all, it's to keep the oil from congealing," he said. "They're not producing as much as they could because it's too damm expensive. We're not talking about a rip-off here. This would free up as much as 10 percent of our known reserves."
In Gammage's view, the "alternative is to import that oil - at OPEC prices. Look at what the $3 1/2 billion does to our balance of payments. We're talking about keeping those dollars in this country."
Opponents contend the plan will be ripe for abuses, without increasing production much. According to one sharply critical congressional briefing paper, owners of wells producing 50 or more barrels a day may find it irresistibly profitable to slow down to 35 long enough to qualify as a stripper and then move back to full production.
"You're not supposed to do that, but we can't police it very well," acknowledgeg one Energy Department official.
The stripper category, once granted, is permanent even if production mounts up again. "Once a stripper, always a stripper," said one House staffer of the rule some like to call "the Gypsy Rose Lee amendment."
Normally the Wright amendment could be blocked on a point of order since it would change another law and is not germane to the DOE authorization bill.
On Tuesday, however, Wright persuaded the House Rules Committee, by a vote of 10 to 5, to grant him a waiver from any such parliamentary nitpicking. Schlesinger began visiting him the next day.