DEPARTMENTAL DUET

When two departments of government form a partnership, look out. The potential for mischief is terrifying.

The U.S. Departments of Energy and Agriculture (USDA) are combining their scientific and research resources to, among other things, help farmers cut their use of fossil fuels. "DOE foresees improvements in the energy efficiency of agriculture as one result of this collaboration," says a press release announcing the agreement.

POLITICAL APPEAL

This needs to be read in context. DOE and USDA are fighting for budget money, the former possibly for its future. As a departure from the jurisdictional jealousies of government as usual, the partnership has political appeal.

It might even yield useful research. DOE administers the well-equipped, well-staffed national laboratories that once developed strategic weapons but now need work. The oil industry is benefiting from the research and computer capabilities of the national labs. There's no reason for agriculture not to benefit as well.

To suggest the effort might significantly alter fuel economics stretches things, however. The oil and gas industry should not dismiss DOE's claim about improved energy efficiency as press release fluff. Assumptions behind the claim and who made it are important.

Since the end of federal price regulation, the biggest threat to the oil and gas industry and to national energy interests has been the popular notion that consumption of oil represents a human transgression worthy of government intervention in markets. When too many people believe such folly, governments feel at liberty to try anything.

The U.S. has experienced state manipulation of markets through price controls, market restraints, supply allocation, and official fuel preferences. All such intrusions have done more harm than good to consumers, producers, and national interests. Yet the official presumption persists that reliance on fossil fuels is a bad thing from which economic sectors, in the current case agriculture, must be rescued by government, which can work only by way of intrusion. That the presumption receives explicit expression by DOE is troubling.

If what DOE intends to say is that by reducing farmers' use of fossil fuels the program will improve fuel efficiency, it is simply wrong. Farmers can cut their fossil fuel use by trading tractors for horse-drawn plows but don't become more efficient in the process.

DOE and USDA might be on to something if the joint research seeks ways to increase output from a given quantity of fuel input without raising total costs. That's what efficiency means. When governments become involved, though, total costs and who pays become tricky a problem that applies as much to government oil and gas research as it does to the DOE-USDA partnership.

In any case, the suspicion must be that DOE means simply what it says and that a chief aim of the program is to reduce fossil fuels because a lot of people think that's a good thing to do (as long as it doesn't cost - or seem to cost - them anything).

THE MESSAGE

This is not a comforting message from a government that refuses to lease its most prospective land for oil and gas exploration, refuses to improve terms of participation on high cost acreage that it is willing to lease, and over-regulates refiners. The message is that the U.S. will encourage research into the exploration and production of natural gas but discourage the activities themselves. It is that the U.S will reward refiners who survive its costly mandates on fuel content and plant operation with programs that discourage sales of their products.

The Clinton administration DOE has said all along that it wants to help the oil and gas industry - or, to use official terminology, gas and oil industry. The intent is probably sin- cere. Something just always seems to go awry in the translation of intent into policy, something probably related to popular notions.