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CRUDE OIL. In order to discourage consumption, the cost of U.S.-produced oil to buyers will be raised from its present average of $8.25 per bbl. to the world level—presently $13.50—by 1980. This would be done primarily by taxation rather than by any significant relaxation of federal price controls. The oil companies would be allowed to charge world prices only on newly discovered oil, which in the future could substantially boost their earnings. The cost of oil from existing wells would be driven up by a new federal tax at the wellhead. Thus buyers would pay more for gasoline (even if the 5¢-per-gal. gasoline tax never went into effect), for heating oil and for all other products made from crude. But, as Carter noted, "the oil companies would be prohibited from deriving any revenue" from most of the increases.
People who heat their homes with oil would get back every dollar that the tax adds to their heating bills. Other revenues raised by the tax would be refunded to consumers in the same manner as the gasoline tax, through income tax credits and direct payments, but again the credits would not be geared to usage; people who used a great deal of oil would lose money, people who used little would gain.
NATURAL GAS. The nation's cheapest fuel—whose artificially low price has led to its catastrophic depletion—would become more expensive. Federally controlled wellhead prices of newly discovered natural gas would rise by 300, to $1.75 per 1,000 cu. ft. Gas produced and consumed within the same state, which now is free of federal controls and sells for as much as $2, would be placed under the $1.75 federal "cap." Carter's reasoning: nationwide equalization of natural-gas prices should stop hoarding of supplies within one state, as occurred last winter, while other sections of the nation shivered without heating fuel.
CONVERTING TO COAL. A 10% tax credit on the cost of new equipment would be granted to factories that switch from oil and natural gas to coal-fired systems. Industrial users of oil who fail to switch will be hit with a 900-per-bbl. penalty tax that will rise to $3 by 1985. Money collected from such levies would be channeled into a development fund for accelerating the conversion of plants to coal. Factories and utilities would be flatly forbidden to burn oil or gas under new boilers unless they could demonstrate that for some special reason they could not use coal.
HOME INSULATION. Since an estimated 40% of house heat escapes through faulty flues, ill-fitting windows and porous walls, tax rebates would be offered to homeowners who insulate their residences. The amount: a 25% personal income tax credit on the first $800 outlay, or a tax saving of $200, and a lesser percentage on the next $1,400. For householders unable to raise the cash, utility companies will be required to offer installment-plan insulation programs for their customers.