WATCHING WASHINGTON NES STRATEGIES

Administration officials are due to present President Bush National Energy Strategy options this week, so he can choose among them and release the plan early next year.

The oil industry is hoping the NES will give the U.S. long overdue focus and consistency on energy issues.

PITFALLS AHEAD

But Melvin Conant, president of Conant and Associates Inc., Washington, sees many pitfalls in the path of the NES.

He warned a House banking subcommittee hearing last week, "An NES has eluded us and will continue to do so until an energy emergency of epic proportions confronts us.

"The general need for greater emphasis on an NES will depend largely on whether there are large American casualties in the settlement of the Iraqi problem. If not, it is difficult for me to believe we shall have a comprehensive energy strategy."

Conant said the NES draft appears to be a long list of familiar options. "There will probably be no surprises. What we shall look for are different degrees of emphasis on oil and gas issues, possibly on nuclear options."

Conant is skeptical DOE has the influence with the President and the rest of the executive branch to win the necessary battles for the NES.

He added it is not enough for the President to propose the NES-he must push for it in Congress and work closely with the chairman of the key energy committees, all from a different political party.

And a "principal hurdle" is that 10 major committees, with as many subcommittees, can claim jurisdiction over parts of the strategy.

Even if Congress passes an NES, it will alter it significantly, and, "We are probably not going to have in a single document the comprehensive approach to energy that some of us think is necessary," he said.

Conant said the continuing lack of a national consensus on energy policy and public mistrust of the government's energy data and of the oil companies are key underlying problems.

"The oil industry still holds the national longevity record for attracting widespread disbelief in its data and performance. The most recent contribution has been in the Valdez tanker accident and Exxon's reaction to it.

"But the larger suspicion rests on the question of prices, profits, and collusion-witnessed in the outcry over the increase in gasoline prices so quickly after Aug. 2.

"Mistrust of oil is a political force of great importance when considering the priorities of an NES. Since in many instances oil-its problems and prospects-is the nation's biggest energy problem, this persistent doubt about the oil industry's behavior can have a major effect on energy strategies."

NES PRIORITIES

Conant said the NES should focus on providing adequate energy supplies at a reasonable cost, lowering oil imports, increasing alternative energy R&D, improving conservation, and maintaining a strategic petroleum reserve equal to 100 days of imported crude and products consumption.

He added it should be built upon specific goals "so we can measure the success or failure of what we do."

And Conant said it should call for a new federal agency to expedite construction of critical energy projects.