With his new administration less than a month old, President Reagan has already begun to reassess national policies that can set the country on a more vigorous course of energy production and help free us from the grip of foreign oil.
The President moved quickly to lift all controls on oil ahead of schedule, an action that removed the last trace of what has been a chief obstacle to increased domestic energy production for nearly a decade.
His decision was clearly in the long-term best interest of the American people. Although somewhat higher prices will result in the near term, decontrol will help reduce United States reliance on imported oil in the long run and make it less vulnerable to OPEC pricing actions.
Full decontrol will benefit the American people by giving a further boost to US exploration and production which has already reached record levels due to partial decontrol. Some 3,600 drilling rigs are expected to be in operation in the US during 1981, surpassing the 25-year high of 3,000 rigs set last year.
The impact of immediate decontrol of crude oil prices will increase US refiners' costs about seven cents a gallon of all products. how much of this average cost increase will be passed on to the consumer is less clear. marketplace competition will continue to moderate price increases by individual companies because crude oil and petroleum products are in ample supply. Companies generally were not charging the full amount for gasoline allowed under regulations before decontrol.
With the removal of controls, other viable energy forms, such as coal, oil shale, and solar energy, will be better able to compete in the marketplace. Consumer conservation of petroleum energy also will be encouraged as US oil prices rise to world-market levels. Unquestionably, the American consumer is becoming more conservation-minded. This trend will continue in a market-oriented environment in which prices are freed from the distortions of price controls.
In addition to decontrol, the administration is also addressing other issues of importance in our national effort to increase energy supplies. One such issue involves "multiple use" policies to enchance utilization of federal lands.
Much of the energy and mineral potential of this country lies beneath land and waters controlled by the federal government. At the present time, use of these areas is limited to recreational purposes and scenic preservation.new policies are needed that would allow that resources of these areas to be mobilized in America's quest for energy security and a healthy economy. This can be accomplished in ways fully compatible with protection of the environment.
The new administration must also evaluate policies to encourage development of nonpetroleum domestic resources. The US, with its vast and largely untapped coal reserves, has been called the "Saudi Arabia of coal." We need to develop and utilize these resources in environmentally acceptable ways. One way to begin is to reassess unnecessarily rigid environmental rules which have restricted the use of coal. The Reagan administration will have an opportunity to review the Clean Air Act when the current authorization of programs under the act expire in September.
Along with increased use of coal, we need a greater commitment to safe nuclear power. The new administration has indicated a sharing of this opinion.Our domestic supplies of uranium are large, and we cannot afford to ignore them. Although no lives were lost and no off-site property damaged, the 1979 accident at Three Mile Island continues to hamper the nation's nuclear power program.
We must find the means to overcome the emotionalism surrounding nuclear power and judge this energy source on its record of performance, which has been impressive over the years.
he Reagan administration also will deal with the question of developing synthetic fuels in the years ahead. Under the Synthetic Fuels Corp., the federal government is sharing in the financial risks involved in accelerating the commercialization of production facilities with unknown economic viability. The future level of government support and the length of time such support should be available are matters which the new administration will study.
The key to meeting the challenge of US energy vulnerability lies in developing our own energy supplies here at home -- supplies that will not be subject to disruption by foreign governments or by events beyond our ability to control or predict.
It is to be hoped the President, the Congress, and America's energy industry will work hand in hand to reduce the country's dangerous dependence on OPEC oil. As an industry -- and the nation -- we are well-equipped and well-positioned to do what needs to be done. We are prepared to follow our national leaders tow ard a new day of energy security.