Eisenhower and Natural Gas

When the Eisenhower Administration rode into Washington three years ago, it came to power with a long-standing identification with business interests and some general ideas on the allocation of the nation's natural resources. In hectic succession, the President proposed measures to return the Tidelands to state control, to bypass the authority of the T.V.A., and to sell of government-owned synthetic rubber plants. Before Saturday, Mr. Eisenhower will have one more opportunity to oppose government interference with the workings of private industry, when he decides whether or not to sign the controversial Natural Gas bill.

Passed last week by the Senate amid intense lobbying, the Harris-Fulbright amendment to the 1938 Natural Gas Law would, in effect, exempt producers of natural gas from government regulation. Under existing legislation, the Federal Power Commission has regulated gas production at the wellhead, with the "primary aim of preventing exploitation of consumers." But supporters of the bill maintain that these regulations curtail the profits of the nation's more than 5000 gas producers--most of them relatively small--discouraging them from seeking vital new reserves. The real violators of the consumer's interest, according to Senator Fulbright of Arkansas, sponsor of the bill, are the pipe-line companies who collect 90 cents from every dollar spent for gas by the householder. The amendment, he claims, would stimulate new industries based on an increased supply of natural gas and enable the producer to have a bigger share of his own pie.

While proponents of the bill, both Republicans and Democrats, maintain that the national interest demands an increased incentive to foster a continuing search for new gas fields, many Senators fear that a removal of regulation would drastically harm consumers. This increase in rates would only add to the profits of the fewer than 200 large companies that supply most of the natural gas carried in interstate commerce. Primarily involved in oil drilling, they receive bonanza profits from by-products without sizeable expenditures.

Already favored by the President's 27 1/2 percent tax abatement to compensate for depletion and dry holes, these oil companies, unless regulated, can "gouge" the consumer with exhorbitant prices. An increase of as little as two to five cents per million cubic feet could cost the consumer as much as $18 billion in the next twenty years. If the consumer tires of Esso gasoline or Chesterfield cigarettes, he can change his purchases, but the 60,000,000 users of gas for refrigerators, ranges, and heating plants must pay whatever price the local gas company charges. In addition, industrial production, much of which is now geared around using gas as a cheap, adaptable fuel, would suffer from any price rise. The gas industry has become a monopoly and should, therefore, be regulated as a public utility, with its prices held to "costs plus adequate reimbursement."

If the President signs the natural gas bill, he will be furthering his by now well-defined policy of seeking a "friendly partnership with private business." His signature would be one more clear example of his Administration's willingness to support private industry, even at the expense of the consumer.