September 26, 1975
Page 30509
SURVEY OF STATE ENERGY OFFICIALS
Mr. MUSKIE. Mr. President, in recent weeks the Congress and the President have had several confrontations over the issue of petroleum price decontrol. Unfortunately, these confrontations have produced few positive results for American consumers. Controls are off and it looks as though domestic oil prices will be allowed to rise to world prices — consumers will be forced to pay even more for the energy they need. In my own State of Maine, for example, State officials estimate that increased costs for energy could run as high as $72 million if prices are decontrolled.
And yet, the administration has told Congress repeatedly that decontrol is necessary to prompt conservation and encourage domestic production. We have heard time and time again that, in fact, the only way to cause consumers to decrease their energy usage is to allow prices to go up.
I maintain that the situation is less clear than the administration would lead us to believe. I am convinced that the only sure result of decontrol is hardship — unnecessary hardship for many people in this country who are unable to pay more for the energy they need to live.
In an effort to determine how others read the possible effects of decontrol, my Intergovernmental Relations Subcommittee surveyed the directors of State energy offices. These important State officials were asked to respond to several questions related to domestic price decontrol. I found few surprises in their answers.
First of all, nearly all the 44 State officials surveyed saw little or no value in trying to promote conservation of energy through the price mechanism. Twenty-one State officials estimated the effects of higher prices on consumption as negligible, 18 foresaw a small decline in usage if prices were to rise dramatically. Only five thought that moderate price increases might curb consumption but only if coupled with other voluntary and legislative actions.
These figures indicate that those on the front line, the officials charged with the responsibility of dealing with the day-to-day energy problems of citizens in their States see little hope for reducing consumption price mechanism. Further, of those 18 State officials who saw some reduction in usage with dramatic price increases, 11 found that inequities would follow for low-income families and individuals. Clearly, the price mechanism is regarded as a very imperfect means of promoting conservation.
The second major conclusion of the study reflects the intricate interrelationships between energy sources that so complicate the process of developing a rational energy policy for the Nation.
Thirty-two of the State officials surveyed projected the natural gas shortage as the worst energy problem they fear this winter. These officials represent both States where natural gas is an important fuel and those States where little natural gas is used. Energy officials from high natural gas consumption States are concerned about the lack of alternative sources of energy. In other States, like Maine, where little natural gas is used, State officials fear that the use of other fossil fuels to replace natural gas may cause shortages of needed fuel oil for home heating and industrial use and drive prices for those fuels even higher.
Clearly the natural gas supply situation must be dealt with quickly to insure that adequate supplies will be available this winter. Our search for a policy must not ignore, however, the delicate balance that exists between the various forms of energy and the economic consequences of major changes in availability.
For those of us who live in Washington, it is easy to view our policy decisions in terms of projected results. Unfortunately, we often forget to consult the people who must implement these policies on a day-to-day basis. For that reason, I think the opinions expressed in this survey should be considered as we continue this debate over price controls.