Fixing the Gas Bill

Few Washington bureaucrats turn down a chance to grab more power, but the Federal Power Commission has done so repeatedly when it comes to regulating the prices of natural gas in the field. It accepted the job only when the U.S. Supreme Court so ordered (TIME, June 14). Last week FPC Chairman Jerome Kuykendall appeared before a House Commerce Committee to tell why the Supreme Court was wrong.

He was the first witness asked to testify on a bill introduced by Arkansas Democrat Oren Harris to overturn the Supreme Court decision, restore gas prices to free competition. Kuykendall told the committee that the FPC had voted 4-1 (the holdout: Republican'Claude Draper) in favor of exempting independent gas producers from federal controls. Said Kuykendall: "We believe that a sound fuel policy is essential to a robust and expanding internal economy and to the successful development of the national defense. We believe that no sound fuel policy can be erected upon such discrimination as presently exists against natural gas and in favor of other competitive fuels."

The gas industry was there in force to back FPC's position. Federal regulation will bring on short supplies, warned Ernest Thompson, a member of the Texas Railroad Commission (which enforces conservation of Texas' underground oil and gas). Rather than accept a money-losing, Government-fixed price, gasmen may refuse to export their gas out of the state, said Thompson. Already, federal control has brought on a sharp drop in prospecting for gas, said Standard Oil (Indiana) Economist John Boatwright.

But millions of consumers stretching from Michigan to Massachusetts believe that regulation at the wellhead does tend to keep prices down. Before the hearings are over, the committee expects to listen to many a formidable argument for regulation.

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