Will Oil Prices Bring About More Shifts in GOP Thinking?

If influential Republican Senators Howard Baker of Tennessee, Ted Stevens of Alaska and Paul Laxalt of Nevada followed their words with action, they could save consumers between $68 billion and $94 billion in oil prices between 1979 and 1985 and hand President Carter a stunning defeat that millions of inflation-pressed Americans would applaud.

In recent days, these senators have delivered criticisms of the big oil companies which are unprecedented for conservative Republicans. Senator Baker suggested that if the oil giants pushed the people in this country any further, they may find themselves nationalized.

With business down sharply in Nevada and thousands of hotel workers laid off, Senator Laxalt declared his suspicion that the gas shortage is not real and said it was “absolutely necessary” that “some top independent auditing agency should explore and see what’s really happening to gasoline.

“All any of us are thinking about, based on our complaints from constituents, are those gasoline lines,” he added.

Senator Stevens also has been hearing from back home. It seems an independent refinery in Fairbanks is being squeezed, mercilessly, by price gouges of Exxon, Standard of Ohio and Atlantic Richfield. Stevens caught the central issue when he remarked: “How can we be for total decontrol (of old oil prices) if we let OPEC determine price in the United States.” The senior senator from Alaska commented that he is rethinking his position on decontrol and divestiture (breaking up the large oil companies under the antitrust laws).

The three senators may just be letting off some steam. They also may be telling the oil companies not to take them for granted. Playing harder to get, they may be wooed more ardently by the oil lobby and additional campaign funds may flow to Republican congressional challengers in 1980 rather than Democratic incumbents.

But, if they were not posturing and if they decide, for once, to represent the folks back home, their leverage on the White House is impressive. Here is the possible scenario: Baker, Stevens and Laxalt come out against price decontrol of old oil (wells that began producing before 1973). They could say that the massive inflationary jolt for the economy is intolerable and inequitable. They could note that even oil industry sources scoff at the alleged benefits of such decontrol in conservation and expanded production.

After all, old oil has already been discovered; it has an average production cost of about $1.85 per barrel which is selling for an average of $5.86 per barrel at the wellhead. Why should the consumer pay three times as much by 1981 for this oil already under production?

They could remind President Carter of his repeated campaign promise in 1976 not to decontrol old oil. It is still the same old oil. They could ask Carter whether he became president of the United States in order to let the price of domestic oil be determined by OPEC cartel-pricing avidly backed by Exxon, Texaco, Shell and other giant oil corporations. For there is no free market pricing of petroleum in this country: it is either Uncle Sam or the Exxon-backed OPEC cartel that will determine the price.

The three senators could mobilize other Republicans and, joining with the Democrats, overcome any filibuster attempt to stop the extension of price controls on old oil. The House of Representatives would almost certainly support the Senate. Congress then would only have to recall Carter’s recent statement that he probably would sign, and not veto, such a bill if it came to his desk.

He certainly would sign such legislation unless he wanted to be viewed as anti-consumer by millions of very upset consumers. The Republican senators could take credit for this consumer victory and remove some of the Big Business tarnish that has plagued the Republican Party for decades.

The GOP has been a prisoner of its past rather than a harbinger for the future. The future does not mean marching behind Big Oil. It means advancing competitive enterprise by divestiture and protecting consumers from cartel pricing by extending old oil price controls.

Motorists, homeowners and tenants will remember the GOP much more favorably in the next year if the party takes on this kind of future.

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