WATCHING WASHINGTON DOE'S ANTITUMOR CAMPAIGN

The U.S. Department of Energy is working hard these days to disprove the adage that truth is the first victim of war.

DOE is waging its own private war against rumors, as a sideshow to the war in the Middle East. The effort is not as insignificant as it might seem: By smothering rumors with facts, DOE can prevent large swings in oil markets that could cost consumers billions of dollars.

DEFEATING A PROPHESY

Last week Energy Sec. James Watkins reminded the National Petroleum Council, oil industry executives who serve as his advisory council, that analysts seemed to agree last fall a war would send spot market prices to $601 00/bbl.

"So we decided to do everything we could to defeat this self-fulfilling prophesy we thought would be totally unfounded on the real supply of oil to the world market," Watkins said.

DOE began working with Saudi Arabian and United Arab Emirates oil officials and U.S. military commanders to establish channels of communication should war develop.

Watkins said, "We have installed state of the art communications equipment and put an effective network in place. DOE is now in position to confer with officials directly on the scene, then get the correct information out quickly. We are manning an emergency operations center 24 hr a day.

"We have our own persons in Dhahran to monitor events at the most exposed Saudi oil fields. We have some retired oilmen in our offices helping us-men who have worked with Saudi Arabian Oil Co. and know the fields and know what is chaff and what is wheat in reports that come into us."

Watkins said the daily reports, dubbed the "black gold message system," enable DOE to provide accurate data on oil production and refining operations to U.S. commodities markets and government officials.

"We fax oil data daily to members of Congress, every governor in the nation, and state energy officials to help calm fears. All this is designed to provide the nation's decision-makers with accurate, real time information and to try to do everything we can to stop rumors."

Because DOE now has the facts, Watkins said, "if rumors are true, we can, face up to the situation."

Watkins, a retired Navy admiral, visited the Persian Gulf last month. He said, "Saudi and U.A.E. fields are well protected against military threat and will continue to produce, in my opinion. The Saudis have top rate operating and security personnel in place. The multinational force is well positioned to help defend them, as evidenced by the recent downing of Scud missiles as they approached Dhahran. And steps have been taken there against the threat of terrorism."

THE PRICE, SUPPLY FRONT

Watkins said the fact that crude oil prices dropped rather than increased when the bombs began to fall reflected the "significant initial military successes and a great deal of international planning before the outbreak of hostilities."

He said world oil prices should remain stable. Supplies are adequate, demand is dropping, strategic reserves are moving into the market, and Persian Gulf productive capacity is largely undamaged.

This is the message DOE and the oil industry must repeat and repeat, Watkins said, because consumer confidence is vital. "While we don't have an oil supply problem now, irrational consumer behavior could create one."