US Seeks Energy Strategy

Year-long effort will try to set policies to ensure supplies and protect environment. FUEL CONSERVATION

AMERICA'S energy future could be ominous - if current trends continue. Top federal officials say the United States urgently needs a national energy strategy to head off potentially serious problems in the 1990s.

Officials point to several troubling developments:

Oil production in the US fell during the first six months of 1989 to the lowest point in 25 years.

Oil output in the lower 48 states is declining at what some experts call a precipitous rate - 40,000 barrels per month.

Oil imports exceeded US crude output during the first half of 1989 for only the second time in history.

Drilling has plunged from over 89,000 new wells in 1981 to an estimated 20,000 in 1989.

American, Japanese, and European automakers have begun to emphasize cars with high fuel consumption.

Concerns about acid rain and global warming are impeding the wider use of coal, America's most abundant fossil fuel.

James D. Watkins, secretary of energy, has launched a series of nationwide hearings to explore answers to these challenges.

By late next year, Admiral Watkins wants to develop a national energy strategy that would point America toward a secure energy future, while safeguarding the environment and sustaining economic growth.

A key aspect of Watkins' plan will be a scientific model - the National Energy Modeling System. It will resemble mathematical models used by economists, but will be designed to guide policymakers on energy issues.

W. Henson Moore, deputy secretary of energy, says the model will be designed to take the guesswork out of energy planning. With its help, policymakers can make energy decisions with fewer unforeseen consequences.

For example, the model could compute the effect of a higher gasoline tax on a host of variables, including the environment, foreign trade, employment, inflation, and government revenue.

Watkins says the overall energy plan will contain short-term, medium-term, and long-term recommendations. It will be dynamic - responsive to changing technology and to political and environmental developments.

Energy experts say this effort by the Bush administration is long overdue.

William S. Lee, chairman and president of Duke Power Company, told Watkins at a recent hearing that government policy has often left industry confused:

``During my professional career, I have seen coal plants converted to oil for air quality, [then] oil plants converted to coal because of import concerns; nuclear plants first promoted by the Congress, then discouraged; ... natural gas encouraged, then banned, then encouraged again as a generation fuel...All of which has taught our industry the virtue of being nimble.''

Current policy is so muddled that it can take years to build an electric power plant. As Mr. Lee noted, power companies find the process is so slow that the building of one plant can ``span several business cycles...and as many as eight Congresses and several presidents.''

Such bureaucracy now threatens to lead to electric brownouts, Energy Department officials warn.

Michael McCloskey, an official with the Sierra Club, praised Watkins's efforts to arrive at an energy strategy, but noted that rapidly changing world conditions will make the job difficult.

No longer is energy supply the only concern, Mr. McCloskey noted. Though oil shortages drove energy policy in the 1970s, ``the global warming problem will drive energy policies in the 1990s,'' McCloskey predicts.

Watkins emphasizes that a ``safe and healthy environment'' will be a top priority of the national energy strategy - a point endorsed by many witnesses at the hearing.

Also supported by most witnesses was the need for greater energy efficiency in everything from home heating to automobiles.

Mr. Lee of Duke Power noted that conservation efforts by his company had eliminated the need to build three new power plants, and had saved the utility and its customers millions of dollars.

Irving Mintzer, of the World Resource Institute in Washington, says that a well-conceived energy policy could help the US overcome a number of problems, including the trade deficit, the federal budget deficit, and degradation of the world's climate.

Oil imports, for example, now account for one-third of this nation's trade deficit. Witness after witness argued that the US could maintain its standard of living while cutting energy use substantially. European nations, for example, already use far less energy to produce each dollar of gross national product.

While US officials urge swift action to improve the US energy picture, they praise progress made since the early 1970s.

Today's American-made cars get twice the mileage they did in 1973. The overall US economy uses just slightly more energy than 15 years ago, yet the economy is 45 percent larger. Industry produces products with 30 percent less energy than in 1973. And a huge Strategic Petroleum Reserve, containing 570 million barrels of oil, has been stockpiled to protect against a cutoff of foreign oil.

Those efforts have given America a critical window of opportunity. But without a strategic plan, the US could hit serious energy problems in the years ahead.

Energy Department hearings will resume today in Tulsa, Okla., then continue Aug. 23 in Boise, Idaho, Aug. 30 in Seattle, and Sept. 8 in Louisville.

Watkins will present a draft of the energy plan to President Bush, the Congress, and the public by April 1, 1990. It will then be subjected to six months of public debate. The final plan will then go to the President by the end of 1990.

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