Oil, water, and politics mix in Venice

Suddenly the world's great and powerful converge on this watery marvel of a city, disrupting the routines of everyone except the pigeons of St. Mark's Square.

Normally placid Venice bristles with guns -- from tanks lining the runways of Marco Polo airport to platoons of soldiers patrolling lobbies and corridors of the grand hotels.

Blue and white police boats dance through the choppy waters of the famous lagoon, circling the tiny islet of San Giorgio, scene of the Western world's sixth annual economic summit.

Each participant, including reporters, wears a special laminated badge, complete with photograph, without which he cannot enter even his own hotel.

Neither Italy's Red Brigades, nor any other terrorists -- if Italian authorities have their way -- will get through to the chiefs of state and government assembled here, representing the United States, Canada, Britain, France, West Germany, Italy, and Japan.

A key economic aide to President Carter, used to long weeks of quiet pre-summit planning, ruefully surveyed the martial scene. "Well," he said, "here we are. Let's see what we can make of it."

Quickly the conference divided into two parts: political, with emphasis on Afghanistan; and economic, stressing oil and inflation. The summit leaders, condemning the Soviet occupation of Afghanistan as "unacceptable," called on all countries to strive for a world governed by the rule of law.

US and other officials reacted with caution, tinged with skepticism, to the Soviet announcement of a limited troop withdrawal from Afghanistan.

"My belief," said President Carter, "is that it's much more associated with a desire to get Olympic participation than it is to modify the wording of the communique to be issued here in Venice."

On energy, Mr. Carter laid the case for oil conservation before his colleagues, stressing the US view that by 1985 world demand for petroleum would outstrip supply by 4 million barrels per day. This gap, according to US officials, could widen to 8 million barrels per day by 1990.

In addition to conservation, the summit leaders agreed, stepped-up development of alternative sources of energy must be pursued, including a doubling of coal use over the next ten years.

The chiefs of government concurred that inflation remains the West's No. 1 economic problem, though some warned against letting unemployment rise too high.President Carter, repeating a favorite domestic theme, said governments should not combat recession by undue public spending.

"Once the leaders see the commonality of their economic problems," said a senior US official, "we hope it will reduce the political tensions dividing the US and some of its allies."

Maybe. In any event, a muted scenario is not to the taste of hundreds of international reporters swarming over Venice. Drama is what cameras and commentators want and a bit of that is what they got, even before the formal conference began, when Mr. Carter and West German Chancellor Helmut Schmidt huddled hurriedly on their arrival in Venice. Mr. Schmidt resents a letter sent to him by President Carter, reminding Bonn of its commitment to allow the deployment of medium-range nuclear missiles on German soil, as part of an agreed-upon NATO strategy.

The chancellor, who reportedly told an interviewer that he had been dealing with the Russians a lot longer than "some other people," also has doubts about Mr. Carter's handling of the Afghan and Iranian crises.

So do several other leaders at Venice, who feel that the vital oil, trade, and security interests of their nations are affected by unrest in Central Asia and the Middle East.

Mr. Schmidt, who shortly will travel to the Soviet Union for talks with Russian leaders, reportedly wants to avoid an overt anti-Soviet toughness in the Venice communique that might hamper his work in Moscow.

In essence, two conferences are under way in Venice. There is the preplanned economic meeting, for which the communique has largely been drafted, citing economic and energy goals. These include a continued fight against inflation by the seven powers, a reduction of oil imports, and greater allied efforts to develop alternative sources of energy. Detailed negotiations on these issues have been held within the 21-nation International Energy Agency (IEA) and the 24 -member Organization for Economic Cooperation and Development (OECD), both based in Paris.

Officials of the summit powers who work together to map out the annual summit gettogethers also participate in deliberations of the IEA and OECD.

Over economic aspects of the meeting, these officials feel they have control. About the political aspects, they are less certain.

"What I fear," said an American official, "is that this will become a media event -- not because the press wants it that way, but because the leaders do."

Two men at the summit -- Messrs. Carter and schmidt -- face tough election fights this fall.

Leaders at Venice know that the beady eyes of TV cameras will project their images, for good or ill, back to voters at home.

Therein lies uncertainty, as powerful men talk on San Giorgio -- whether political disputes, with domestic implications, will overshadow the economic purposes for which the summit was convened.