WASHINGTON -- President Reagan sent to Congress Monday his proposal to deregulate natural gas prices by 1986, saying consumers are 'poorly and unfairly served' by laws now in effect.
Despite an administration projection that decontrol will cause prices to fall three years from now, congressional Democrats charged the legislation outlined by Reagan actually will drive prices up. They vowed to fight it.
One senator threatened to filibuster, and a congressional leader said the bill has less than a 50-50 chance in the House.
'Our goal must be to obtain an adequate supply of natural gas at a reasonable price,' Reagan said in a statement released by the White House. 'Anything less is not sufficient and will not solve the problems currently faced by many Americans who depend on natural gas.'
Energy Secretary Donald Hodel said he expects Congress to pass the measure with some changes -- and perhaps some improvements. He said the proposal would provide incentives for suppliers to seek lower-priced natural gas, and that the savings would be passed on to consumers.
Under Reagan's proposal, which permits but does not require renegotiation of contracts, gas producers would not be able to increase current prices until Jan. 1, 1986.
When the temporary cap is removed Hodel predicted prices 'will respond to the marketplace' and fall 10 cents to 30 cents per 1,000 cubic feet.
'It is clear that consumers are being poorly and unfairly served by the existing regulatory system -- a system which prevents natural gas producers and their customers from establishing contracts that respond to market forces, including downward pressure on prices that otherwise would occur as a result of plentiful gas supplies and declining oil prices,' Reagan said.
To protect consumers, the president said he insisted on a provision that reverses current law and places a moratorium until 1986 on the automatic pass-through of increased gas costs other than those attributable to inflation.
Reagan said the legislative proposal is neither partisan nor a 'quick-fix' plan. 'Instead, our approach is a comprehensive proposal that can -- and I believe will -- be supported by congressmen and senators of both parties and will be beneficial to the consumers they represent,' he said.
Sen. James McClure, R-Idaho, chairman of the Senate Energy Committee, said he will open hearings March 9 and predicted Senate approval. But Sen. Howard Metzanbaum, D-Ohio, vowed a filibuster in the Senate.
Rep. John Dingell, D-Mich., chairman of the House Energy Committee, rated the chances for passage at 'not better than even.'
Metzenbaum, who led a three-week filibuster against Jimmy Carter's decontrol of oil prices six years ago, said he will try to block this legislation as well. He predicted 10 or 20 senators will support a filibuster.
'I think this is the wrong decision at the wrong time. It will be inflationary,' said Metzenbaum, who estimated that decontrol would cost consumers $60 billion.
Hodel attributed Democratic opposition to 'people who have not had a chance to analyze the proposal.'
'The president does not have the illusion that every word and comma will pass (through Congress) without debate. I hope and expect there will be improvements,' he said.
Under current law, about 65 percent of natural gas would be decontrolled Jan. 1, 1985. The rest would be gradually deregulated, as old controlled wells run dry and are replaced by new decontrolled wells.
George Lawrence, president of the American Gas Association, which represents distribution and transmission companies, applauded Reagan's proposal to change the decontrol process, saying, 'We and the administration share one long-term goal: We both want to end up with a deregulated field market for natural gas.'
Sen. Charles Percy, R-Ill., urged Congress to take quick action to lower the price of imported natural gas.
'The American people, in my judgment, should pay no more than fair market prices for imported energy at any time,' Percy said before a Senate Governmental Affairs subcommittee.
Hodel said although Reagan's proposal does not deal directly that foreign natural gas, producers 'will soon have to compete with lower prices on the domestic market.
Sen. Thomas Eagleton, D-Mo., said he is 'greatly concerned' with part of the propoal that 'strongly favors producer interest.'
'Experience teaches us that energy producers are all too willing to look after their own economic interests,' Eagleton said. 'The last thing consumers need is for Congress to give its blessing to massive ripoffs.'