Energy Secretary James R. Schlesinger said yesterday the 14.49 percent increase in oil prices announced Sunday by the Organization of Petroleum Exporting Countries is a serious blow to President Carter's plans to lift controls on domestic oil prices.
"It makes it more difficult," Schlesinger said when asked about Carter's intention to raise domestic oil prices to world levels by 1980.
"It makes the barriers larger because the gap [between domestic and world prices] has increased in a period when the government is concerned about inflation."
Carter told the leaders of other industrial nations at last summer's Bonn economic summit that he would raise domestic oil prices-now averaging about $9 a barrel-to the world level by 1980. By then OPEC prices will be $14.54 per 42-gallon barrel. By law, Carter can end domestic oil price controls in June or continue them through September 1981.
Schlesinger's concerns have been mirrored more stongly in private in recent days by Charles L. Schultze, head of the Council of Economic Advisers, and Alfred E. Kahn, the White House anti-inflation czar.
State and energy department analysts expected OPEC to increase prices only 5 to 10 percent.Under those terms decontrol would have been more attractive, officials say. But that is not what they got.
Another critical energy pricing decision, the administration's plan to send a gasolinproposal to Congress next month, also could be caught up in the conflicting energy and inflation goals. Schlesinger has repeatedly said that he expects gas prices to go up no matter what the administration does.
At the same time, he has vigorously argued for ending gas price controls, saying they are anticompetitive and outmoded, and in the long run would tend to help hold down prices.
Final presidential approval of oil price decontrol and the details of a gasoline decontrol measure have been held up, according to a senior energy official, because the administration wanted to see what the outcome of the OPEC meeting was, and whether the situation in Iran would stabilize.
In a related development, President Carter and Schlesinger held the first meeting of the Cabinet-level Energy Coordinating Committee, consisting of more than 20 agencies, in the White House Roosevelt Room yesterday morning. Created by a presidential executive order in September, the committee is charged will overseeing the energy policy decisions that spill over between various departments.
Committees similar to the ECC, chaired by Schlesinger, have been a fixture since the Nixon administration.
Issues discussed at yesterday's meeting were:
Efforts to expedite the regulatory permit procedure necessary before siting energy facilities such as refineries. This is in part the outcome of a Business Roundtable letter to Carter last March citing "some of the constraints of the environmental administrative process." One administration official said the ECC would press to have the federal permit review process done concurrently by various agencies.
Implementation of the Uranium Mill tailing Act, passed by Congress last year. This requires coordination of the Environmental Protection Agency, which is charged with setting health stadards; DOE, the Justice Department and the Nuclear Regulatory Commission, which are required to deal with the waste and settle outstanding claims.
Coordination of the recently enacted National Energy Act.
Asked whether the ECC would undercut the administration's environmental goals, a senior energy official said, "We have carefully avoided that kind of issue - it is not perceived that way."