Officials at the White House and the Department of Energy are drafting proposals for President Carter's consideration to decontrol domestic crude oil prices, permit export of Alaskan oil and impose mandatory thermostat settings for all Americans.
If accepted by the President, these proposals could provide the basis for a major energy speech that Carter will be urged to make soon by his chief domestic affairs adviser, Stuart E. Eizenstat, and Energy Secretary James R. Schlesesinger.
According to adminstration officials, Schlesinger is prepared to recommend that all three of these steps be taken quickly. Eizenstat and other White House officials are reliably described as less certain in their recommendations fearing that one or more of the moves could rebound to Carter's political disadvantage in 1980.
Under a 1975, law Carter has authority to end controls on domestic oil in June.
"There is some disagreement over the timing," says a top energy official, adding, "The domestic council is a little more concerned about the effect on the campaign" for reelection.
Schlesinger reaffirmed the administration's commitment to eventual oil price decontrol at a hearing before the Senate Energy Committee yesterday.
"It has been the objective of this administration to get to world oil prices... the means are less important than anything else." Schlesinger said at the opening of more than three hours of testimony in the cavernous, ornate Senate Caucus Room.
Sitting beneath banks of television lights before the green felt dais, Schlesinger conceded that voluntary approaches" to spur conservation "are not working.".
"There must be a much clearer indication of the need to cut back," Schlesinger said, with seven television cameras recording his every word.
Citing the nation's pledge to reduce oil imports by nearly one million barrels by the end of the year, Schlesinger told the committee that the administration's priorities were to save 400,000 to 500,000 barrels a day by increasing natural gas consumption, and an additional 300,000 or so barrels by "wheeling" electrical power between utility systems that had additional coal and nuclear capabilities and those that relied on oil.
Mandatory thermostat settings of 65 in winter or 80 degrees in summer, which administration officials say will almost certainly appear in Carter's speech, would save up to 200,000 barrels a day this summer.
Taken together, these options -- which can be implemented without congressional approval -- would more than satisfy the pledges of oil savings the United States made last week to the International Energy Agency in Paris.
In addition, Schlesinger said the administration hopes to increase oil production from the Alaskan North Slope by an additional 400,000 barrels a day, and to increase oil production from Elk Hills, the government's own petroleum reserve.
To provide new incentives for Alaskan oil production, Schlesinger has urged Eisenstat and Carter to send a proposal to Congress to allow exports above the current production level of 1.2 million barrels a day. Because of a West Coast oil glut and a lack of inland pipeline facilities, Schlesinger says the companies have not achieved a production level of 1.6 million barrels a day pledged earlier.
Once proposed by the President, exports or swaps could be vetoed by Congress.
By limiting exports to production in excess of the 1.2 million barrels, DOE expects the oil industry to press for building west-east pipelines.
Yesterday, however, Schlesinger said, "Sohio has just about thrown in the towel" on its proposed Long Beach to Texas line. "I begin to doubt we will ever see that line moving oil from the coast," he told the committee in somber tones.
Yesterdayhs hearing was to a great extent a replica of Schlesinger's 11 earlier congressional appearances since Jan. 17 at which he has discussed the impact of the Iranian oil squeeze.Sen. Mark Hatfield (R-Ore.), ranking minority member of the Energy Committee, proposed that "after today we declare a moratorium on asking the secretary to the Hill."
Most committee members repeated questions from earlier hearings. Schlesinger offered updated answers, with one notable exception.
Sen. John Durkin (D-N.H.) subjected Schlesinger to heated questioning, accusing DOE of "calmly presiding over confusion," citing problems with the stategic petroleum reserve, pipeline certification, and stalled programs. "Why shouldn't the Congress abolish the Energy Department and call for your resignation now?" Durkin asked, glaring over his glasses at Schlesinger.
Schlesinger sat calmly through Durkin's outburst drawing on his pipe, then answered the New Hampshire Democrat -- who faces a tough reelection race in 1980 -- in deliberate tones.
"The opportunities are splendid for demagoguery," Schlesinger said, the back of his neck reddening. "You accumulated more misapprehensions and misinformation than in any question I have ever heard in Congress."
Schlesinger went on to say that he had offered his resignation several times but that it had not been accepted.
Afterward, Sen. Henry M. Jackson (D-Wash.), the committee chairman, told Schlesinger, "You are doing an outstanding job under difficult circumstances."
Citing a Government Accounting Office report that the Iranian oil cutoff had cut U.S. supplies 3 percent or less, Jackson asked Schlesinger why some major oil companies such as Shell had cut back deliveries by as much as 30 percent.
Schlesinger said the cutbacks were out of line with the impact of the Iranian oil situation, but were the result of DOE's price controls.