Once again, an oil crisis has aroused U.S. concern over energy policy. Well it should. But two observations from history are in order: The U.S. seldom acts on energy except during crises. And energy initiatives taken during crises usually fail.

A global oil supply interruption of 4.2 million b/d, stemming from Iraq's invasion of Kuwait Aug. 2, certainly highlights the need for a U.S. energy policy. But the Department of Energy and Congress must not repeat mistakes. Temptations are great; so is the price of error. Policy makers must look beyond momentary political pressures and market exigencies. They must remember why past measures failed.

UNFORTUNATE CLIMATE

The current political climate is especially unfortunate. Environmental obstructionists-as opposed to well-meaning environmentalists-are straining their credibility in this period of emergency. They know that an effective energy policy would promote development of domestic supply, which means oil and gas drilling and construction of processing facilities, pipelines, and power plants. Their agenda can't abide economic activity like that. So they complain that oil companies are exploiting the Middle East crisis to push environmentally unsound energy goals.

The complaint is absurd. Policy makers should check the record. Oil companies have consistently called for energy policy attentive to both environmental values and future supply. That the call went unheeded until a crisis developed does not constitute exploitation. Policy makers must not be fooled.

They also must not deal with energy at the shallow level of understanding reflected in opinion polls and service station interviews by television reporters. Most Americans, polls suggest, think they're being gouged at the gasoline pump. Most Americans, then, are wrong. Why can't someone in government say so? Gasoline prices jumped last month for excellent reasons: a market-jolting interruption in supply of the world's economic life blood and the very real threat of very real shortage very soon. There is no price conspiracy. Energy hungry Americans can't be expected to understand all of the market's complexities and pressures; they can be expected to face up to economic reality. They won't without straight talk from their leaders.

Furthermore, if policy makers will move beyond opinion polls, they'll keep conservation-always the popular prescription-in perspective. The U.S. uses energy more efficiently now than it did before the price spikes of the 1970's. It can and should improve. But conservation alone can't solve all U.S. energy problems. The country must develop secure sources of future supply as well.

ACHIEVING BOTH GOALS

It can achieve both goals-further improvements in energy use efficiency and development of future supply-if policy makers avoid the biggest temptation of all: shoving the government's clumsy hand into the market. The U.S. responded to past crises with price and consumption controls that only aggravated problems and proved more costly than the crises themselves.

Policy makers should avoid one more error: believing that the crisis compelling their action will never end. It will. Energy policy enacted in the midst of shortage-threatening crisis should be able to withstand the rigors of a market in surplus-the historic norm.

Indeed, the government must act soon on energy. It should deal with both the shortage that threatens now and the surplus certain to follow. Before it acts, however, it must recognize and reject the seductive political nostrums that always arise in crises and that, if implemented again, will create more problems than they solve.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.

AVOIDING ENERGY POLICY MISTAKES

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