No Magic in This Marketplace
President Reagan's resilient optimism appears to have become official government policy, infecting the usually indifferent Washington bureaucracy like a tropical contagion. Take Secretary of Energy Donald Hodel. "We are better off today than we were in 1980,' Hodel told the National Press Club this summer. "Consumers are reaping the benefits of oil decontrol.' In a late August interview with the trade newsletter "Inside Energy,' he was even less guarded: "Things have, you know, improved vastly under the Reagan Administration, for which we will duly take credit. We have no alternative but to admit that we're responsible for the successes in energy.'
Actually the energy picture is not quite as rosy as Hodel depicts it, and what good news there is cannot be attributed to the Reagan team. Domestic oil production is essentially flat, and coal and gas production declined sharply from 1980 to 1983. To be sure, oil imports, the gauge of American energy disarray in the 1970s, dropped from 6.8 million barrels a day when Reagan took office to 5.5 million a day in the first half of 1984, and prices have fallen as well. But most economists say that the drop is a symptom of the 1980-83 recession and not the result of any particular action on the part of the Administration. Hodel is fond of claiming that Reagan's order to decontrol oil eight days after he took office was the momentous event that increased production and lowered prices. In fact, oil was 80 percent decontrolled by that time, so the effect of the move was minimal. What is more, prices appear to be firming up, despite enormous excess capacity in the oil-producing countries, and import levels are expected to rise 14 percent this year.
Hodel's other major claim--that the goal of U.S. energy policy is "to maintain a balanced, across-the-board approach to developing our energy resources'--is as disingenuous as the cries of victory, and probably more harmful. The Administration simply refuses to undertake crucial energy tasks that await Federal action. And old biases still drive the decision-making at the Department of Energy.
First, there is the department's stubborn allegiance to nuclear power, evidenced by the $1.4 billion requested for that purpose in the 1985 budget. This includes $623 million in the "energy supply' category, $238 million for nuclear waste disposal and $468 million for regulation. The nuclear fusion budget is an additional $483 million. The President's support for the Clinch River breeder reactor, his hope to revive spent-fuel reprocessing technology and his pledge to facilitate exports have cheered the industry without accomplishing much. Nunzio J. Palladino, chair of the Nuclear Regulatory Commission, has pushed for the licensing of more nuclear plants, although the technology is dying. During Reagan's term thirty-nine plants under construction were canceled, and no new projects have been started. The economics of nuclear power, as almost everyone but the Administration acknowledges, are simply no good.
Meanwhile, the assault on alternatives begun under Reagan's first Energy Secretary, James Edwards, a dentist from South Carolina, continues, though Hodel seems more bullish on conservation and renewable sources of energy than Edwards was. "Hodel recognizes that conservation in the United States stabilizes the world oil market,' says Debbie Bleviss, president of the Energy Conservation Coalition in Washington. "And he sees the problems of Third World countries being dependent on imported oil for economic growth. Is there a new commitment to conservation? It depends on your base line. Compared with Edwards, yes. Compared with the Carter Administration, no.' Scott Sklar, the Congressional coordinator of the Solar Energy Industry Association, adds: "Hodel is much more savvy. He knows not to articulate the very negative policy Edwards did.'
Budget requests are the best index of Hodel's priorities. …