AMERICA'S oil supplies are rapidly declining just as the country's thirst for energy grows. Together, that could spell trouble for the United States. Secretary of Energy James Watkins - conducting an 18-month study of America's energy policy - is searching for ways the US can avoid empty gas tanks, cold homes, and shuttered factories in the years ahead.
After hearing from more than 1,000 individuals and organizations, Admiral Watkins says the ``loudest single message'' coming from the public is for greater energy efficiency and conservation.
But a report released this week by Watkins indicates the country may be headed in the other direction in several key sectors:
Average fuel economy of new cars and light trucks sold in the US has declined since 1988.
Electricity use soared during a recent three-year period when 10 million households increased their use of air conditioning.
Oil output in the US slumped in 1989 to the lowest level in 25 years as oil consumption climbed and imports rose.
In a meeting with reporters, Watkins's main answer to these problems was conservation. He says witnesses from 43 states, and 20,000 pages of testimony, show the public favors conservation.
``Energy efficiency was seen as a way to reduce pollution, reduce dependence on imports, and reduce the cost of energy,'' he says.
Watkins's wide-ranging search for energy ideas has won praise from conservationists, governors, and other officials. For example, James Wolf, executive director of the Alliance to Save Energy, a conservation group, says the admiral has brought ``energy perestroika'' to a department that has seldom listened to the public.
The 230-page interim report, a compilation of ideas from the public, contains hints that President Bush may break with some of the laissez-faire energy policies of the Reagan administration.
While it is not final, the report lists a range of suggestions for government involvement in energy development, including alternative sources such as hydro and solar. Mr. Reagan had favored a marketplace approach.
Altogether, the report contains hundreds of policy proposals, many of them conflicting. In coming months, Watkins will sift through the recommendations and assemble a list of options for Mr. Bush. The president's final plan should be ready for public release in early 1991.
A sense of urgency propels planners at the Energy Department. Congress threatens to set its own energy policy - through a new clean air act, and with bills that address global warming. If Watkins does not act swiftly, Congress may present him with a de facto energy policy.
Also adding pressure on Washington is America's suddenly growing dependence on oil from the volatile Middle East. The US remains the world's second largest oil producer, after the Soviet Union. During the early 1980s, oil imports shrank and the US energy picture was improving.
However, a sharp decline in oil prices sent US production skidding after 1985. Drilling slowed, and reserves began to fall. Today, oil imports are back up where they were during the oil crises of the 1970s. Oil imports currently cost the US $49 billion a year, nearly half of the nation's $109 billion trade deficit.
Eventually, energy experts say the US will have to wean itself from oil through greater use of natural gas, coal, renewable wind, solar, and hydropower, and perhaps nuclear energy.
The interim report suggests that natural gas may serve as the most convenient ``bridge'' fuel for the next 10 to 20 years. Supplies are plentiful and cheap. And natural gas is less destructive of the environment than coal or oil.
In later years, however, America must look elsewhere for its energy supplies. The report indicates several possibilities.
Renewable energy, such as solar, appeals to many environmentalists. Among other likely renewable sources: hydropower, where significant expansion is possible, including upgrades of current hydroelectic dams; biomass fuels, such as ethanol from corn, gasoline from wood, and diesel fuel from vegetable oils; and geothermal energy from underground.
Also important in later years will probably be coal, of which the US has one-quarter of the world's supply. It is hoped that clean-coal technology, which includes far more efficient combustion, will be available between 2005 and 2020.
Watkins also indicates nuclear power may be important, especially if the problem of nuclear waste from fission reactors can be solved. By about 2040 it is hoped nuclear fusion technology will be available - a potential source of virtually limitless energy.
While the latest report contains many warnings, there is also good news. The typical new car now gets 28 miles per gallon, up from just 13.3 in 1970. Some new gas furnaces for homes use only half the fuel of those a few years ago. All sorts of machines, from airplanes to refrigerators to dishwashers, are made more energy-efficient than in the 1970s.
There is also favorable news on some fuel supplies. Experts say US sources of natural gas, for example, are now believed to be much more extensive than previously thought.
Watkins invites the public to comment on the energy study. The interim report, along with all testimony to date, is available at Energy Department libraries across the country.