New US Energy Department report runs head-on into Reagan policy

Ronald Reagan's campaign vision of an American energy landscape dotted with oil derricks, nuclear plant domes, gas pipelines, and coal-scraping cranes now faces hard economics.

A yet-unreleashed US Department of Energy (DOE) report finds that the nation's least expensive future lies in saving -- not producing -- energy.

Thus, as the new Reagan administration plans to pour on the heat for more domestic energy supplies, this new US study says, in effect, to "cool it".

Free-market investment in "energy improvements, which have picked up rapidly since 1978, can cut by one-quarter the nation's total projected use of fuel and electricity to the year 2000 -- and still sustain a 2.5 percent annual growth rate in the economy. And burning of nonrenewable fuels, such as oil and coal, can be cut in half through better efficiency.

"You tend to save about three to five times more by investing in improved efficiency than you would in producing the same amount of energy," states Arthur H. Rosenfeld, head of the energy-efficient building program at the Lawrence Berkeley Laboratory.

"Or a penny invested in conservation is worth three or four pennies invested in new gasoline supplies," he adds.

Rather than calling for sacrifice in life style, several dozen DOE-contracted scientists who studied recent energy related investments and technology found that the most economic course is using less fuel, rather than more.

The DOE researchers, however, remain worried that the report's penny saved-penny earned logic will not be taken seriously by incoming US Energy Secretary James Edwards, who repeatedly stressed incentives for production in his Senate confirmation hearings.

And during the campaign, Mr. Reagan joked that conservation meant "we'll be hot in the summer and cold in the winter."

The new administration plans to decontrol petroleum prices even before the restrictions expire Sept. 30, hoping to boost domestic oil drilling. Most energy experts believe, however, that the resulting higher prices will reduce demand more than increase production.

Ironically, John Sawhill, the DOE deputy secretary who commissioned the study under the Carter administration, was appointed head of the new, federally created Synfuels Corporation. He left office with Mr. Carter.

"In the Reagan transition team, we saw a swing to an understanding on conservation and solar," says Karen Griffen, present DOE staffer coordinating the study through the Solar Energy Research Institute. "Everybody here was excited about the report."

In the building sector alone, the report finds that that DOE projections for electricity use can be cut in half, eliminating the need for 175 new power plants, says Professor Rosenfeld.

"If we spent $2,000 for conservation on each single-family home," he said, "it would save enough energy that we would not need the $400 billion expected for new power plants."

Not only would declining energy use for the next 20 years be compatible with a healthy economy, says Mark Ross, a University of Michigan physics professor, but the study indicates "we need that kind of efficiency improvement to have a healty economy." The report expects a 64 percent growth in gross national product for the next two decades.

While the report emphasizes energy efficiency over new supply, it still assumes a need for more production -- although researchers recommend no federal subsidies, such as for nuclear breeder reactor research. Solar power is seen as playing less of a role in the US energy mix than previously thought: about 25 percent after energy dema nd is reduced.