The Department of Energy is poorly prepared to crack down on the price gouging that could result from the Iranian oil squeeze, according to department officials and members of Congress.
Some allegations of illegal profiteering have already been received. It took years for Energy Department regulators to track down many of the alleged overcharges stemming from the 1973-74 Arab oil embargo.
DOE officials concede that most of their current enforcement efforts are still devoted to collecting an estimated $2 billion in alleged overcharges during the 1973-74 crisis.
Another problem is the fact that the international practice of "daisy chaining" -- selling the same oil shipment over and over on paper to drive up profits -- remains beyond the reach of DOE regulations.
"This whole situation is not going to be easy," says David J. Bardin, head of the department's Energy Regulatory Administration. However, Bardin is quick to add that "we are in a much better position than our predecessors."
On Capitol Hill, Rep. John D. Dingell (D-Mich.), chairman of the House Commerce subcommittee overseeing DOE, says, "They are not moving as fast as we would like. If you get enormous market distortions, just how much can the administration do?"
Dingell, like some DOE officials, also wonders whether the Carter administration has asked for enough funding to support enforcement efforts which occupy 1,400 of DOE's 20,000 employes.
DOE has already been pressed for an investigation of gouging as a result of the high oil prices and tight market brought on by Iran's oil shutdown.
"We are looking into specific situations," Bardin said. "We have had people come to us complaining about problems in 1979," he said.
Both Bardin and the department's best known enforcement official, special counsel Paul Bloom, say that DOE will try to move aggressively if there are indications of widespread pricing abuses.
By now, Bardin says, "we've learned how to go to court."
Says another high-ranking DOE official:
"Logic tells you that the real problem is the incredibly greedy pressure overseas, where there is tremendous incentive to play games with tankers full of oil."
DOE regulators are most concerned about problems in the oil reseller markets, where crude oil is bought, sold and traded. After the 1973 embargo, the number of oil resellers in the United States increased four-fold, to more than 200. Still another area, which DOE enforcers say they will be watching closely, involves possible violations of the government's complex oil allocation system where oil can be transferred from one company to another at higher prices than those allowed by regulations.
(During his Monday news conference, when asked whether there would be a repeat of the embargo-period overcharges, President Carter said, "I don't have any evidence now that there's a violation of either the law or proprieties in pricing or distribution of energy products.")
One respected energy analyst, Larry Goldstein of the Petroleum Industry Research Foundation in New York, says there is some evidence of "daisy-chaining" oil on the high seas. "When one cargo gets traded many times -- that is what is responsible for the high prices we are seeing on the spot market," he says.
Recently, Goldstein and other market watchers say that the spot price for oil seems to be peaking at about $20 dollars a barrel, the so-called "break point" in pricing.
In the last week, shipments of Nigerian oil bound for the Caribbean were sold at $23.50 a barrel, among the highest prices yet publicly reported -- and well above the cartel's official price of nearly $14.
The spot market -- where oil not under long-term contract is sold -- generally handles only a small percentage of the more than 50 million barrels of oil that is produced, sold, refined, and used each day.
What concerns some administration officials, however, is that the amount of oil now being sold on the spot market has nearly doubled over the last month, according to government analysts.
The result is that these higher prices, which are rolled into the average price of oil products in the United States, have put greater upward pressure on prices across the market. Heating oil prices are now going up from a half-cent to a penny a gallon each week, currently retailing at about 60 cents a gallon, versus about 52 cents a year ago. And gasoline prices for regular fuel are now at about 70 cents a gallon nationally, compared to about 62 cents last year.
Another warning about possible pricing violations comes from the General Accounting Office's Dexter Peach, who says, "The [Iranian] situation as it is developing now gives rise to the kinds of things that happened in 1973."
So far Bloom and others in DOE's revitalized enforcement offices have won high marks from some quarters for pursuing civil remedies and criminal prosecutions and repayments for 1973 and 1974 abuses. Next week one of DOE's first major abuse cases from the embargo era goes to court in Florida. Now DOE officials are quietly asking whether the same kind of over-charges will happen again, and if they do, will they take as long to track them down.