The Boston Globe from Boston, Massachusetts • 92

A4 BOSTON SUNDAY GLOBE July 1, 1979 5 Boston fiuidaij (Slobc tion of current import levels, now about eight million barrels daily. What happened at the economic summit in Tokyo last week is too timid. This country needs more than "restraint" and "targets." With conservation lies the beginning of freedom from OPEC's monopoly, a stronger dollar and better relations with allies who with reason see us as a threatening glutton. WILLIAM O. TAYLOR, President and Publisher THOMAS WINSHIP, Editor SEARCH FOR AN ENERGY POLICY 1 A plan for action ROBERT H.

PHELPS. Executive Editor JOHN S. DRISCOLL, Ass't Executive Editor, Daily TIMOTHY LELAND, Ass't. Executive Editor, Sunday JOHN GIUGGIO. Executive P.

4 General Manager RICHARD C. OCKERBLOOM. P. Marketing Sales DAVID STANGER, P. Business Manager hat Congress should do is enact a rationing plan and what President Carter should do is put it into effect.

Wc would suggest three other ROBERT L. HEALY, Associate Editor ANNE C. WYMAN, Editor, Editorial Page Globe Newspaper Company, 135 Morrissey Boston, Mass. 02107 617-929-2000 A Wholly Owned Subsidiary of AFFILIATED PUBLICATIONS, INC. JOHN I.

TAYLOR, President DAVIS TAYLOR, Chairman of the Board 4 It is time to come to our senses. The gasoline lines, the frantic search for an open station, the confusion, the tension, the disruption: These are more than realities; they are also symptoms of a problem that transcends the present and transcends oil. As private individuals, we have been deceived by government and industry into believing the promise of infinite plenty. With no one to tell us otherwise, we have continued to guzzle every energy product we could set our hands on. In public life, there has been a failure of the elemental purposes of government communication, leadership and action.

In corporate life, the normal course of business has operated to the detriment of the national inter- est. It's not just the Ayatollah's fault; it's not just James Schlesinger's fault; it's not just Congress' fault; it's not just the oil companies' fault. In the real, multiple-choice world of energy, the answer is: All of the above. To make matters worse, we are at odds with ourselves even over the nature of the present mess. The popular verdict clearly favors the notion of contrived conspiracy over that of genuine shortage.

Unfortunately, evidence exists that feeds the suspicion. Until it is confronted, people cannot be expected to look beyond the gas lines to the larger, far more serious problem. It is a fact that for most of this year American refineries have been running at about 85 percent of capacity, including periods when crude oil supplies were above 1978 levels. In other words, there was crude oil around that wasn't getting refined. It is also a fact that there is panic in places like Boston but no worry yet in places like Albuquerque.

The fact that some areas suffer while others prosper makes absurd on its face the idea that there is a national crisis in gasoline supplies. For this we can thank the federal government's indefensible allocation system, which operates on the inequitable principle that the more gasoline you used last year, the more you deserve now. Let the oitl companies reply that they were merely responding prudently, as businesses should, to a highly volatile situation by being conservative in their crude oil refining. Let the government reply that it was only carrying out regulatory law. The fact remains that the normal course of corporate and government business transformed a prob- steps for the United States to take for the short term: Let domestic crude oil price controls gradully end by late 1981.

The more we conserve the less we will have to pay, and higher prices will make more competitive such synthetic alternative sources as shale oil and production of gas from coal that we control, not OPEC. Enact a much higher tax on the increased profits the oil industry will earn as a result of the lifting of crude oil price controls than either the President has proposed or the House is about to consider. Any windfall profits tax will not affect incentives to find new oil. That is already decontrolled, and profits the oil companies reap from new finds, unless they result solely from OPEC price increases, are not "windfall" profits. A steep windfall profits tax will, on the other hand, assure that the public gains control of the unanticipated profits resulting from decontrol or OPEC price increases and can channel that money specifically for further energy development and for subsidies to offset the impact of skyrocketing energy prices on the poor.

Use some of the revenues to put in place a much more generous rebate program for the needy than the Administration's proposed annual payment of roughly $100 per family. For the next decade or so, we would make four points: Because of the public confidence-shattering events at Three Mile Island in March, we do not believe that any new nuclear plants should be permitted to go into operation until these doubts have been removed. We must get much more energy from new sources like shale oil and the sun, much more quickly than current policies envision. Our planning must no longer assume that any increased supplies from conventional energy sources oil, natural gas, coal and nuclear power can do more than compensate for declines in production from existing oil and gas fields. Conservation must become even more extensive.

The major requirements are a rigid insistence that gasoline mileage improve, at least to the extent envisioned by current law, and a massive government investment in generous incentives to convert existing dwellings and businesses into more efficient structures. A I.igher profits tax would help finance these subsidies. For the long haul, we would suggest these steps: A large increase, also using funds from a high windfall profits tax, in subsidies, grants and loans to speed the commercial development of synthetics, in- MiFlh There is a way out of the gasoline lines. In this eight-part series, The Globe examines how a national energy policy could get lis out of them. Today we present an overview of the issue and of our recommendations, with a separate dis-' cussion of the impact on, New England.

US Oil Imports vs Production 4 I US Product on (millions of barrels a day) of us wins, but, more important, where everyone loses. What is so maddening about all this is that it is so unnecessary. Supply is just a touch below current demand, perhaps 5 or 10 percent in the case of gasoline, and much less than that for crude oil. That is scarcely a drastic imbalance. There are adjustments we can make right now that would not only be infinitely less painful than those forced by our policy of default, but would also make the country more secure.

The country need not despair. The fact is the United States has energy options, a great many of them. The task is not to remain caught in an endless squabble about which "one" energy source to pick, but rather to select the proper mix, and to differentiate clearly between short-, medium- and long-term considerations. We must begin with the facts. The people do not believe the government; they do not believe the oil industry.

Only the government can change this, by having the oil and gas industries report to it instead of their trade associations, and by skeptically auditing these reports. The facts must be used to enunciate clear and precise goals for consumption and conservation, and also to give the people a comprehensible running score on the nation's progress. We must have new leadership, not just at the discredited Energy Department, but also from our parochial, paralyzed Congress and our ineffective President. For the short term there are really only two choices: import more oil from OPEC or conserve. Along the former road is national disaster.

The Treasury Department concluded in March in a report to President Jimmy Carter that the level of imports (then at prices a third less than they are now) is a threat to our security. It is the other road, conservation, that we should choose. Conservation is our most attractive, least expensive choice, not just for this year and next year, but for at least the next 10 years. The nation requires a rigid ceiling on OPEC imports now, enforced if necessary by quotas, which the President already possesses the authority to impose. It also requires a firm timetable for the reduc- son that begins in just a few months.

Again, demand is expected to be up, not down. There is a word for such a phenomenon shortage. That is what we have, a shortage. Given present policy and consumption trends, it will continue. What is more, it will get progressively worse, with no end in sight.

At that point, some Americans, not all of them poor, will exchange their place in the gasoline line for one in the unemployment line. Unless we change our present course, we will try, with decreasing success, to put off the inevitable by sending our oil companies begging to the Organization of Petroleum Exporting Countries, which already has a stranglehold on nearly half our oil supply. The companies will try to import even more, at prices that would make the neighborhood loan shark blanch. It is impossible to believe that this is what the American people want. But is also happens to be our national energy policy.

It is not a policy by design; it is a policy by default. By default, it is national policy to increase energy consumption. By default, it is national policy to buy more imports from OPEC. By default, it is national policy that we pay higher and higher prices and receive nothing extra in return. By default, it is national policy that gasoline be rationed by having people sit in line more and more at stations that are open less and less.

By default, it is national policy to burn exorbitantly priced OPEC oil to generate electricity. By default, it is national policy to assume we can produce our way out of our energy problem by doubling production of coal, in the face of persuasive evidence that we neither can nor should. By default, it is national policy to assume we can produce our way out of our energy problem by doubling production of nuclear power, in the face of substantial doubts that we either can or should. Our energy policy by default has lasted for most of the 1970s for one main reason: The nation is stalemated where energy is concerned. Competing regions, ideologies and interests have combined to create a situation not only where none (millions of barrels a day) 1.8 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 Year (est.) lem the temporary loss of all Iran's oil exports and the permanent loss of more than one-third into a crisis.

Beyond decrying these outrages, we as a nation need to face some facts. Here is a number from the oil industry that not even its most severe critics challenge: In late June, this country had 331 million barrels of crude oil on hand, which is 5 million less than the figure a year ago. But demand is up, not down. Here is another number, similarly unchallenged: In the same period, stocks of gasoline amounted to about 227 million barrels, 3 million less than the figure for a year ago. But demand is up, not down.

And here is a final, accepted statistic: In late June, stocks of the fuel category that includes home heating oil totaled about 135 million barrels, which is barely half the nation's needs for the heating sea eluding shale oil as well as gas liquids produced from coal. A similarly large increase in government aid to speed development of renewable sources, primarily solar, but also including wood and hydro-electric power. Our collective problem with energy is excessive timidity. Weary from years of political battle, distrustful and cranky, we have lowered our sights. As long as this is so, will be left with our na-tionalenergy policy by default.

The question before us is whether we respond to our troubles by focusing on the rest of the summer or the rest of the century. Next: Gasoline lines are a symptom of the crisis I only worse In New England, it's the same The three nuclear plants on our horizon a second unit at Plymouth, the twin reactors at Seabrook, and a third Millstone unit in Connecticut are nowhere near operating capability. The Plymouth facility has not even received a construction permit yet, and other two projects are far from completion. Even if the public's fears on safety are ultimately satisfied, we should use the time to rethink the economics of these proposed facilities. We should above all be satisfied they are genuine last resorts to oiL New England's indigenous energy future could be bright The region has a vast quantity of wood, and it has water (our largest natural resource by far).

New England Energy Congress studies indicate wood and hydroeletric power could generate more than 40 percent of the three northern states' energy needs by the mid-1980s, and one-fourth those of the entire region in just 20 years. Such a bright tomorrow merits a large public and private investment, starting today. tain duration in natural gas; while it lasts, it can be a short-term substitute for some imported oil at electric utilities. Coal, however, probably won't help much, and probably shouldn't. Proper regulations to protect people from known health hazards are likely to preclude all but a negligible increase in coal burning here.

As for domestic oil and gas, there is Georges Bank. We will never know if anything is there until we drill. We should take a look, after giving the benefit of the regulatory doubt to our known economic strengths in the area, fishing and tourism. Fortunately, we have some time to think about the future of nuclear power in New England. The withholding of operating permits for new nuclear plants should be national policy unless the public's newly heightened concerns are allayed.

This would not immediately alter the regional picture. supplies. However, they have also increased dependence on oil imports and created political problems with other regions. As part of a genuinely national effort, they should be jettisoned. A transition away from the region's over-reliance on imports will not be easy.

More than one-fourth of the oil New England consumes is used to generate electricity (three times the national average); and nearly one-fourth is used to heat buildings and homes (more than twice the national average). The region has four options for the future, two excellent ones and two with mixed prospects. The easiest, the cheapest, and the longest-lasting is conservation. It should always be the top priority of regional energy policy. Its possibilities are vast, and will be the subject of the third editorial in this series on Tuesday.

The tapping of conventional sources other than imported oil rates much lower. There is currently a national surplus of uncer What goes for the nation, goes double for New England. I The United States burns oil for half of its energy needs; New England is dependent to the tune of 80 percent. The country imports nearly half its oil from abroad; New imports nearly 80 percent. In one respect, the region is unfortunately unique.

Because England is the source of almost none of its energy, 90 cents iof every dollar goes elsewhere to buy it. It is thus doubly in our interest that oil be conserved, imports reduced and conservation subsidized on a massive scale. Dollars being exported for oil are desperately needed here, to create jobs. 4 In the current chaos, parochialism dominates our national en-" ergy policy by default. Under a sound program, it should have no place.

Since 1973 a plethora of special subisidies and allocations 'signed to "help" New England has certainly assured adequate.