THE NEXT SECRETARY of energy, James B. Edwards, got off to a good start yesterday with the right answers to two of the first questions he'll have to settle. At his confirmation hearing, the Senate Energy Committee was running him through the predictable catechism, and Sen. Henry Jackson inquired about his intentions regarding oil and gasoline price controls. Mr. Edwards replied that he was inclined to recommend total decontrol "as soon as possible."
Absolutely correct. How soon is possible? Mr. Edwards declined to say. But it ought to be sometime between lunch and bedtime on Jan. 20. The sooner it's done, the better for the country. President Carter, to his great credit, started the process of decontrol last year on a schedule that runs through next September. The question now is whether to let that process continue gradually for another nine months or to end it at once. The present moment is an ideal one because competitive pressures are currently holding gasoline prices well below the legal ceiling and decontrol would have little immediate effect.If supplies tighten this spring -- and that's a real possibility -- most drivers would rather put up with higher prices than with renewed gasoline lines.
A couple of senators grumbled that higher prices don't help conservation because people have to use their cars. That's flatly and demonstrably wrong. On the contrary, conservation laws donht work unless they are reinforced by rising prices. When the price of gasoline rose in 1974, gasoline consumption fell. Then, for four years, the price of gasoline in real terms, adjusted for inflation, steadily fell and consumption rose sharply. When the price suddenly began to rise again in 1979, fuel consumption again dropped. Mr. Edwards will find that his department has very good statistics to support him here.
Some of the senators were worried about the inflationary effects of sudden decontrol. They might more usefully worry about the inflationary efects of continuing the controls. By keeping oil and gasoline prices artificially low for the past decade, this country has encouraged the high consumption that has driven up its imports. The rapid rise in American imports strained world supplies, which in tern made it possible for the exporting countries to keep raising prices. Oil prices, and the iflation rate, are higher today than they would have been if Americans had never attempted to control prices in the first place.
On another heavily lobbied subject, Sen. Bennett Johnston asked the new secretary whether he agreed that the independent refiners were entitled to still more subsidies and protection from competition. Mr. Edwards said that he did not. "Basically," he said, "I'm a free-market man." Oil refining is one of the most profitable businesses in the world and, while the independent refiners are accustomed to heavy government aid, it is utterly unjustified. Mr. Edwards will be pressed hard by many senators to strike a deal, but he would be wiser to stand fast. If consumers have to take the cold shower of decontrol, neither the Reagan administration nor anyone else can defend the perpetual bubble bath for the independent refiners.