New England shows US how to cut back on use of energy

Can America trim its energy consumption and still enjoy economic growth? For years, conventional economic wisdom has gazed into the future and said, "No."

But at least one section of the country, looking into its own recent past, now says, "Yes."

A 66-page report, issued by the 25-member New England Congressional Caucus, makes its point by setting two figures side by side:

* In 1980, New England used 6.5 percent less energy than it did in 1978 (while the nation as a whole reduced its energy consumption by only 2.3 percent).

* Over the same period, real personal income in New England increased by 4.6 percent, while the population grew less than 1 percent.

The result: a region renowned for its lack of natural energy resources is, says Rep. Edward J. Markey (D) of Massachusetts, very much in advance of the rest of the United States in the efficient use of what it has. "New England has really taken the leadership," Mr. Markey noted at a press conference here June 22, one of six held simultaneously throughout the six- state region.

The report overturns recent projections about New England's future, which have generally been made gloomy by the recognition that 80 percent of the region's energy comes from oil, and that three-quarters of that oil is imported. A 1977 study by the New England Federal Regional Council, for example, projected that the region's energy consumption would have to grow by 4.4 percent a year through 1985 if economic growth were to be sustained.

The report comes at a time of increasing concern throughout New England over energy issues. Citizens' groups -- of the sort characterized by Markey as "the granola-chomping crowd in Vermont" -- are raising their voices over nuclear generating plants under construction in New Hampshire and Massachusetts, over offshore drilling in Georges Bank, and over a clutch of other issues, including a high- voltage transmission link from Quebec, natural gas pipelines from western Canada, and the growth of water power.

It also comes on the heels of another report, issued June 11 by the General Accounting Office, supporting the view that New England can continue to reduce its oil dependence through conservation and the development of renewable resources. That report finds fault with the region's utilities, which, it says, have not been "aggressive in promoting conservation and/or alternative supply options." It notes, however, that "they have had little economic or regulatory incentive to do so."

Why the decline in energy growth? The congressional report credits two things:

* Conservation. Efforts by business, industry, and residential inroads. Since the fall of the Shah of Iran and the cutoff of Iranian oil exports in 1978 -- a year of historically high energy consumption in the region -- New Englanders have significantly changed their ways. By 1980, only 72.9 percent of the region's energy needs came from oil, with consumption of foreign oil reduced since 1978 by 48 million barrels. In the same period, gasoline demand fell by 8 percent and demand for home heating oil (the region's main source of residential heating) by 15 percent. Meanwhile, natural gas increased 6.7 percent since 1978 -- while the use of coal, once the basic fuel in the region, increased by 128 percent.

* Use of renewable resources. The report's authors note that there has been "a dramatic shift from conventional to renewable energy sources" -- including solar, hydropower, and wood sources. These sources provided 6.3 percent of the region's total energy needs in 1980 and are forecast to double to 13 percent by 1985. Already, the three northern states (Maine, New Hampshire, and Vermont) meet 25 percent of their residential space-heating needs by burning wood.

"Generating a dollar's worth of income in New England," says the report, "required 10.6 percent less fuel in 1980 than in 1978. This pattern contradicts the commonly held belief that energy use and economic growth must move, if not in proportion, at least in the same direction."

The surge in renewables stems, many feel, from the presence of substantial tax incentives. Bailey Spencer, director of the New England Congressional Institute (the research arm of the caucus that prepared the report), noted at the press conference that both residential wind-energy systems and some solar systems qualify for a 40 percent federal tax credit.

He added that recent laws require utility companies to purchase electricity from small independent hydroelectric plants at an economically favorable rate. The result: "There is really a booming futures market in hydro development across New England," he said.

While sponsored by a bipartisan effort, and supported by funds from the US department of Energy, the report also lends itself to a political purpose. Congressman Markey admitted that "one of our real goals here is to keep the present tax incentives." Like many New Englanders, he expressed concern over moves in the Reagan administration to eliminate the tax incentives and let market forces -- in other words, the high price of energy -- compel energy reduction.

He admits that higher prices are a factor in conservation, but worries that they take time to work through. "What we are saying," he noted, is that "we don't have time to wait for that evolution to occur."