On the morning of May 23, two days before the Energy and Commerce panel on fossil fuels was to begin work on natural gas legislation, staff assistants for the subcommittee's 19 members gathered in a hearing room on the second floor of the Rayburn Building. They were there for a briefing on a proposal crafted by Democrat Phil Sharp, the chairman from Indiana, who had developed a reputation as a Hoosier of caution and compromise.
As Nancy Williams of Sharp's staff began explaining the proposal section by section, she was questioned by Roy Willis, legislative assistant to Democrat W.J. (Billy) Tauzin of Louisiana, the No. 1 gas-producing state in the country.
"You call this a compromise?" asked Willis, whose boss had co-sponsored the Reagan administration's bill to decontrol all natural gas prices by 1986, a concept that was not part of Sharp's committee draft. "There is nothing in it for us at all. But that's all right; we'll deal with you in the subcommittee."
"Well, Roy," responded Williams, according to the recollections of others in the room that day, "we'll handle you in the full committee."
The good-natured challenges flew back and forth, as these staff-level antagonists in the natural gas debate played out all the possibilities of where one side could get back at the other: on the House floor, in the Senate, in the conference committee, in the Oval Office.
But the truth is that today none of the assistants, and none of their bosses, have any certainty whatsoever about the legislative fate of one of the most important domestic issues facing the 98th Congress.
They have no idea whether natural gas prices will be decontrolled, or left unchanged, or rolled back, or who will come out as winners and losers in a contest that has as many competing interest groups as there are rigs in Louisiana's Tuscaloosa Trend: old gas producers, new gas producers, deep gas producers, big producers, independent producers, interstate pipelines, intrastate pipelines, private utilities, municipal utilities, commercial users and residential consumers.
One of the few things on which there is general agreement--aside from the belief that natural gas prices are too high--is that killing major legislation will be easier than passing it. To appreciate why that is so, one must look first at Sharp's fossil fuels panel, which is known these days as the Bo Derek subcommittee. From the ranks of the 13 Democrats and six Republicans on the panel, the votes can be rounded up to kill just about any natural gas bill but not to pass one.
Hence the nickname: "No one can get a majority," said Tauzin. "We're all looking for a 10."
Back in January, when the 42 members of the House Energy and Commerce Committee put in their bids for subcommittee assignments, Phil Sharp, the mild-mannered former professor from Ball State University in Muncie, took one look at the results and muttered something a little stronger than "Oh, brother" to himself. He had a party ratio that would be the envy of most subcommittee chairmen in the House--two Democrats for every Republican, plus an extra Democrat thrown in for safety's sake. But when it came to issues involving oil and gas, the domain of his subcommittee, party affiliations meant very little.
Seven of the 13 Democrats who signed up for fossil fuels came from the oil- and gas-producing states of Louisiana, Texas, Oklahoma, New Mexico, Kansas, Mississippi and Alabama. Combined with the six Republicans on the panel, they could form a strong coalition to push what the major oil and gas companies and the free-marketeers in the Reagan administration wanted--decontrol of natural gas prices.
Sharp's philosophical instincts were on the other side, against full decontrol. So were those of the full committee chairman, John Dingell of Michigan, who had already declared that such a measure would pass only "over my dead body." And scores of congressmen from the Midwest and Northeast, where gas prices were soaring ever higher, were already lending their names to a measure drafted by a coalition of consumer, labor and utility groups that would roll back the prices to winter of 1982 levels and freeze them there.
The natural gas fight was looming as the toughest test of Sharp's nine years in Congress and three years as a subcommittee chairman, and it looked as though he would not even have control of his own panel.
"Phil is caught in a situation where it is rigged against him by one or two votes," said one of his colleagues in the Energy and Commerce leadership. "If he gets terribly lucky, it will be a tie. If God reincarnates his first son again, then he may net out with one vote to the good."
There was no such divine intervention in March, after the administration introduced a measure drafted by Energy Secretary Donald P. Hodel that would decontrol the industry over a three-year period.
One of the seven producer-state Democrats, Tauzin, joined forces with Republican Tom Corcoran of Illinois as the prime sponsors of what became known as the Hodel bill. Four others--Ralph Hall of Texas, Mike Synar of Oklahoma, Bill Richardson of New Mexico and Wayne Dowdy of Mississippi--expressed interest in parts of it, especially the decontrol of natural gas discovered and drilled before 1977, known as "old gas." Tauzin, Hall and Synar were expected to move in that direction, coming as they did from the Big Three states in the industry.
Dowdy and Richardson were less certain. As labor-oriented Democrats who had pledged fidelity to the party's mainstream when they lobbied for seats on Energy and Commerce last winter, they had no desire to hook up with the Reagan administration early in their first terms on the committee. But the political and financial forces pulling at them were intense.Richardson, a freshman with raw talent, energy and ambition, came to Washington with two debts: one to New Mexico's Democratic organization headed by Gov. Toney Anaya and another to the moneylenders: his campaign ended more than $170,000 in the red. Both of those debts would have a bearing on his natural gas deliberations.
Anaya, whose state government was saddled with a $150 million deficit of its own, came out early and strong for decontrol. Some of the largest and potentially richest gas fields in the nation are located in New Mexico's San Juan Basin, and part of every dollar extracted from those fields goes into a state severance fund that helps pay for public education.
The scores of independent producers in Richardson's district were unhappy with many of the contract provisions in the Hodel bill, but the concept that the price of their "old gas" would be decontrolled at a certain date was very important to them. When Richardson held post-election fund-raisers back home and in Washington to work off his debt, the producers attended, spoke up and paid up. "Bill has made it pretty clear," said a sympathetic colleague on the subcommittee, "that he owes those guys something."
In the case of Dowdy, the soft-spoken former mayor of McComb, Miss., who came to Washington after a special election in 1981, the concern was not so much what the industry financiers could do for him as what they had already done to him. His Republican opponent last year, Liles Williams, raised more money--$60,712--from the oil and gas political action committees than any congressional candidate except Phil Gramm of Texas, the leading decontrol advocate on Capitol Hill.
Two industry lobbyists recall Dowdy telling them at a reception following his election that one of the main reasons he wanted to get on the Energy and Commerce Committee was to attract some of that PAC money himself. Dowdy does not remember making that statement.
"I don't know if the industry management will ever really be enthusiastic about me, but they might be at least neutral in the future," Dowdy said in a recent interview. "I've got a good working relationship with them now, and it's been very helpful. I know that some people might not understand, but they have been helpful in an educational way. In my part of Mississippi, natural gas decontrol is really an employment issue. The derrick hands, the field workers who have always supported me, are out of work for the first time that I can remember."
With those five Democrats supporting the key component of the Hodel bill--"old gas" decontrol--it appeared that the administration had a reasonable chance of prevailing when the subcommittee began its markup on the legislation late last month. There was even talk of attempting to "roll" chairman Sharp on the first day by refusing to take up his moderate committee draft, which neither freezes the price of "old gas" nor decontrols it.
Sharp insists that Energy Department lobbyists were attempting, right up until the meeting began on May 25, to put together a coalition that would kill his proposal on that first day. No one on the other side would confess to such a strategy.
"That was talked about but never seriously considered. It would have been counterproductive," Rob Odle of the Energy Department said the next day. "All we wanted was to get Sharp's bill and our bill considered at the same time, on parallel tracks. That is what we got, and as far as we're concerned everything is copacetic."
The dynamics of the subcommittee remained calm, if not copacetic, for another two weeks. Some advocates of price rollbacks expressed private concern about Sharp's handling of his panel. Believing that their side could prevail under "Big John" Dingell's leadership in the full committee, where the consumer state congressmen held a solid majority, they did not want Sharp to allow any early compromises that would make it more difficult for them. It would be better, they said, just to let Hodel win in the subcommittee, and then, as one put it, "blow it the hell out of the water" in the full committee.
"I would rather deal with the issue seriously right from the start than just posture," responded Sharp. "Whatever the outcome here, it is important that I let the process unfold. We will all learn a helluva lot, assessing and reassessing. I believe that there is an important intellectualizing to this process."
Dingell held several meetings with Sharp, but he did not pressure him to act quickly.
"A lot of people figure that if I do something the situation will somehow become immutable," Dingell said during an interview in his congressional office on June 1. "That is not the way it works. Legislation is like a chess game more than anything else. It is a seemingly endless series of moves, until ultimately somebody prevails through exhaustion, or brilliance, or because of the overwhelming public sentiment for their side. I don't think that on natural gas you will see a static situation with one side winning right away, or even winning it all in the end.
"There are very smart, very talented people on both sides of this issue, and there is opportunity and advantage available to both sides up to the moment the bill gets to the president's desk for his signature--and I'm by no means even certain that we'll have a bill. The whole thing may collapse into a single vote--and it may not. For a goodly while, all you will see is a game of blind man's bluff in the subcommittee. My nature is to wait and see what comes to the full committee.
"You will find some extraordinary and surprising permutations before this process is over. The coalitions will be shifting around constantly. At various times you will find the consumers and the deep gas operators working together, the pipelines and the distributors and the producers working together, then against one another. All of these forces will come to play on different members at different times.
"It is by no means assured that when this fight is over we will have crafted legislation good or bad. All of that is still before us, and anyone who tries to give you a hard statement on what will happen is giving speculation at best. The administration is kidding themselves if they think they have the votes to prevail. They may even be thoroughly surprised on that issue inside the subcommittee."
Six days later, the Republicans on the subcommittee gathered in the office of their ranking member, Tom Corcoran, to discuss their next move. Tiger Tom, as Corcoran is called by his aides, had reason to feel pretty good. Back home in Illinois, final preparations were being made for his announcement that he would challenge incumbent Sen. Charles H. Percy in the Republican primary, and here in the fossil fuels subcommittee, it was thought, the decontrol coalition was holding together.
Then, suddenly, Dingell's words looked prophetic.
Someone brought up the fact that two Democrats on the subcommittee, Thomas Luken of Ohio and Edward J. Markey of Massachusetts, were ready to present an amendment striking "old gas" decontrol from the Hodel bill. The five producer-state Democrats would oppose it, along with Corcoran and fellow Republicans Jack Fields of Texas, William Dannemeyer of California and James T. Broyhill of North Carolina. Another Republican, Dan Coats of Indiana, had long ago staked out a position against "old gas" decontrol, since his district was supplied in large measure with that cheapest form of natural gas.
That left Tom Tauke of Iowa as the key vote--the Bo Derek.
Tauke, considered one of the most articulate, straight-shooting members of the Energy and Commerce Committee, had never committed himself one way or another. The Hodel forces had assumed all along that he would be with them. They were wrong.
"They didn't listen very carefully if they didn't know where I was," said Tauke. "Like Dan Coats , I have a constituency served by pipelines with a substantial amount of 'old gas.' The state commerce commission, the pipelines, the industrial and commercial users and the consumers in my district are all opposed to its decontrol. While there is some merit to the philosophical viewpoint that decontrol is in the best interest, I also have to represent the interests of my district."
And so, 10 days later, when Luken and Markey offered their amendment to kill 'old gas' decontrol, the Hodel forces did the only thing they could. They pushed through a motion to delay consideration of all natural gas legislation until after the July 4 recess, giving them some time to scramble for a possible compromise, and making the long and winding road this issue must follow that much longer and more winding.