Coupons in the Hole

The Nixon Administration abhors the very idea of gasoline rationing, considers rationing unnecessary, and lacks the statutory authority to order it even if it wanted to. Nonetheless, Federal Energy Boss William Simon last week began gearing up the machinery to impose rationing, just in case. He ordered the Federal Bureau of Engraving and Printing to start printing a three-month supply of ration coupons, and announced a comprehensive--and imaginative--stand-by plan for their use. Key feature: a kind of Government-sanctioned black market or, in the words of policy planners, a "white market."

The seemingly paradoxical move makes good bureaucratic and political sense. The chance that rationing will prove unavoidable cannot be dismissed, to put it mildly, and getting the machinery ready takes so long that the earliest Simon's plan could go into effect would be March 1. Any further delay in preparing the program could have produced chaos next spring if the fuel shortage does not ease as much as the Administration hopes. Politically, the stand-by plan gives the Administration an ace in the hole in dealing with legislators who have often accused it of fumbling with the energy crisis. Before adjourning for the Christmas recess, Congress failed to pass the Emergency Energy Bill, which would have given the Administration power to impose rationing and take other conservation steps. It will take up the bill again when it reconvenes Jan. 21. The Administration can now argue that it has prepared itself to take any steps necessary to cope with the fuel shortage, even measures that violate its own free-market inclinations, if Congress would only give it the power to act.

Politics aside, the plan is highly detailed for one that the Administration will try hard not to invoke. Every one of the nation's 118 to 120 million licensed drivers over the age of 18 would be mailed a card entitling him or her to buy a month's supply of ration coupons, most likely at a bank or post office. Price: $1 per packet, to defray the $1.4 billion annual cost of the program. The basic ration would be a rather spartan 32 to 35 gallons a month, enough to permit only about 100 miles of driving a week in the average American car.

Rations would fluctuate, however, according to several factors: they would be lower for people who live close to good public transportation than for drivers who live in areas like Los Angeles and have to commute many miles to work. Three percent of all coupons would be held in reserve in each state to be distributed to "hardship" cases. Some 5,000 local rationing boards would make the specific decisions on who gets how much. Most important for the average motorist, there would be a legal free market in coupons: a driver could sell any coupons he did not need, and another driver could buy them, just as black marketeers did illegally during World War II. The price of extra coupons would be set by supply and demand, and that would be in addition to whatever price the buyer eventually paid for the gas itself.

The plan is complete down to some intricate details designed to avert cheating and frustrate would-be black marketeers. The ration coupons will be about a third the size of a dollar bill and, like currency, they will be printed by a difficult-to-counterfeit intaglio process. When a driver bought gas and handed over his coupons at the pump, he would have to sign his name and write his license-plate number on each one, so that they could not readily be reused. The coupons would be good for only 60 days, so that speculators would be discouraged from hoarding large quantities on the hunch that coupon values would rise.

Most economists think that the plan is about as fair and potentially effective as any that could be devised, given the inherent inequities of any rationing system. The big question, of course, is whether it will ever be put into effect.

Last Resort. Simon hopes not. Under final fuel allocation regulations announced last week, he will order refineries to cut production of gasoline in order to shift more capacity to heating oil and products for industry. Still, gasoline consumption will not have to be reduced 30%, as the Administration once feared. Supplies to gas stations instead will be cut 20% below expected demand. Simon continues to predict that voluntary conservation measures will lower consumption sufficiently. In fact, though, such measures as gasless Sundays and lower speed limits so far have reduced gasoline use only 7.2%. Simon himself warns that the appearance of "three-or four-hour lines" at gas pumps could force actual rationing, and such lines indeed formed in some areas over the Christmas holidays.

In any case, the Administration continues to view rationing as a last resort. Before ordering it, Simon is likely to try several other measures: perhaps gasless Saturdays, perhaps a complicated system of colored windshield stickers designed to keep every car off the road one day a week. Red, for example, might mean no driving Monday.

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