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Ralph Nader > In the Public Interest > Natural Gas Hike Looms

President Ford, who be­lieves consumer energy prices are not high enough, is pushing Congress to deregulate the price of inter­state natural gas.

Although this move, backed by the giant oil companies, would cost consumers about $10 billion a year (a $64 annual increase in the average residential user’s gas bill), Ford thinks it would encourage production.

The Federal Power Commission is looking back on a similar theory it adopt­ed in 1971. Led by Chairman John Nasskas, the commis­sion started raising the price of natural gas. Be­tween 1971 and December 1974, the FTC, as the supposed regulator of inter­state gas prices, allowed a tripling of the price of new and, in effect, much old gas.

THE PRICE went from 19 cents per thousand cubic feet to 5 cents per thou­sand cubic feet. The higher the prices approved by the FTC to alleviate the so-call­ed natural gas shortage, the more the oil industry did the same thing to get still higher prices.

In such a climate that has paid off so regularly, it was predictable that the large oil companies, which con­trol the bulk of natural gas reserves, would withhold gas from the interstate markets. Why sell all they could now when they felt sure that the FPC would give them higher prices later? And since Ford may get Congress to lift the lid entirely, why not wait for natural gas to rocket to $2 per thousand cubic feet within a year after de­regulation?

The FPC, however, is beginning to worry about non-producing gas reser­voirs. It ordered an investi­gation into major interstate pipeline companies and natural gas producers after a staff study last month noted that, by the latest data, 26 percent of the na­tion’s proven off-shore gas reserves were not in production.

These federal reserves belong to the people of this country. They are leased by the Department of the In­terior to oil and gas compa­nies. But these companies are not producing what they can produce, preferring to extend a producers’ strike against consumers over producible gas reservoirs which consumers own through the government.

SO THE PANIC stories spread about possible shut­downs of factories in the South, East and Midwest because of the phony short­age of natural gas.

Even the Department of the Interior — long on ac­counts receivable for the oil industry — found itself com­pelled in January to ask oil companies why they have not been producing under their federal leases.

In letters to such companies as Chevron, Gulf, Texaco, Shell and Exxon, the department wanted the following assurances: “Please show why your gas reserves are not being pro­duced and how you are complying with the general regulatory requirement of diligent development.”

Such a belated, timid move by Interior will not budge the durable grip of the Exxons over Washing­ton’s energy agencies. Imagine one administration after another in the past 25 years calling oil a matter of national security and not finding out independently what are our domestic oil and gas reserves. The White House still relies on oil industry figures which the history shows have been deliberately underestima­ted.

Now comes the Ford White House working to raise energy prices by $30­50 billion to encourage domestic production. Ye the massive domestic of price rises since 1973 have only seen the oil giants’ domestic production drop, in spite of their hogging drilling equipment away from the smaller, independ­ent producers.

WITH THE White House so overwhelmingly anti-con­sumer, Congress must act to overturn the President’s demand to raise further the price of imported oil by $3 a barrel.

In a more fundamental way, Sen. James Abou­rezk’s (D-S.D.) bill, S. 489, to promote competition be­tween different forms of energy by prohibiting major integrated oil compa­nies from owning coal, geo­thermal energy, uranium and other energy sources, deserves high priority.

In addition, Sen. Adlai Stevenson (D-Ill.), along with two dozen other sena­tors, wants to establish a federal corporation to ex­plore and produce oil and gas on federal lands. Such a firm would be a yardstick and a safeguard against any future monopolistic price gouges or contrived oil and gas shortages stampeding our country into emergencies.