Groping for a Harder Line

To a man, President Ford's energy advisers are agreed on one vital point:

the President's voluntary energy conservation program will have to be scrapped within two months in favor of some far more stringent policy to reduce U.S. dependence on imported oil. But after months of squabbling among themselves both in private and in public, the advisers are still deeply divided on what that policy should be. Almost every imaginable proposal--a return to gasless Sundays, a flat quota on imports, a deliberate attempt to keep prices high to discourage consumption--can be heard in Washington.

Pressure to resolve the disputes is mounting. Right about Christmas, a fat stack of energy-option papers is due to hit the President's desk. They are supposed to form the backbone of a presidential energy message to the nation in mid-January. The advisers are booked into Camp David, the presidential retreat in Maryland's Catoctin Mountains, on the weekend of Dec. 14 so that they can give undivided attention to reconciling their differences.

Essentially, says Assistant Treasury Secretary Gerald Parsky, the President has six options, some of which could be used in combination. They are:

1) Put a high tariff on imported oil.

2) Place a limit on oil imports, either in dollar or volume terms.

3) Impose an excise tax on domestic and imported crude oil.

4) Impose a mandatory allocation program for petroleum products.

5) Ration gasoline.

6) Increase the federal gasoline tax by at least 10-c- per gal.

At the moment, the leading candidates are an import quota and a renewal of the embargo-bred allocation program that produced the gasless Sundays, alternate-day rationing and miles-long lines at gas stations last winter. All sorts of other proposals, though, have their advocates and enemies and are being debated in a confused atmosphere, made worse by the tendency of some policymakers to speak out prematurely.

Last month a new study by an interagency group of the much discussed higher gasoline tax was nipped in the bud. Interior Secretary Rogers Morton, head of the Administration's Energy Council, told reporters about the study before he told the President. Caught unaware, Ford again quashed the idea and repeated his opposition at his press conference last week--arguing with candid politician's logic that since polls show 81% of the public opposed to the tax, he is on "pretty solid ground" in opposing it himself.

Currently the State Department is trial-ballooning a far-out idea to keep oil prices high for consumers in the U.S. and other major oil-importing nations, even if the cartel of oil-producing countries is broken and world prices drop. The proposal is to guarantee domestic producers a price around the present $10 or $11 per bbl. for new oil pumped out, guarantee equivalent prices to investors in new energy projects such as coal gasification(thus increasing domestic energy production), and perhaps place a variable tariff on imported oil so that it would still cost U.S. industry and consumers $10 or $11 per bbl., even if the Persian Gulf producers sell it for less. This would cut demand and increase the supply of oil outside the OPEC (Organization of Petroleum Exporting Countries) nations and force them to make ever deeper production cutbacks to maintain high prices. Secretary of State Kissinger wants to ensure that lower world oil prices would not jeopardize his goal of making the U.S. energy-independent, and leave it subject to another devastating oil embargo.

Rip Off. Thomas Enders, an Assistant Secretary of State, launched the idea in a speech at Yale before it had been discussed with other policymakers. Treasury Secretary William Simon said the speech surprised not only him but also "many people in the State Department." Representative Henry Reuss, Democrat of Wisconsin, observed in dismay: "I just wonder what it shall profit the American consumer of oil if he is freed from the tyranny of the OPEC only to be ripped off by the U.S. oil companies."

Whatever choice of policies the advisers eventually recommend to Ford, they will have difficulty selling it. The President insisted at his press conference that his voluntary conservation program is "making headway." None of the alternatives is politically palatable, especially since the President has correctly told consumers that they need fear no physical shortage of gasoline and heating oil this winter. Consumers who are once again being wooed by gas-station owners offering free glasses and coupons may not take kindly to being told that they must sacrifice in order to keep the high price of imported oil from wrecking the U.S. trade balance. Disunited as they are about specific policies, though, the energy advisers agree with Frank Zarb, Ford's nominee to become head of the Federal Energy Administration, who told Congress last week: "The seriousness of the international and domestic energy situation will not permit further lengthy studies of alternative energy strategies."

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