POLICY: No Shortage of Skepticism

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The energy shortage is dividing Americans into two camps: those who are behaving as if the crisis is genuine, and those who are not. Last week the shortage touched the lives of additional citizens, but there were many who were still not much affected, and quite a number who continued to suspect that the crisis is overblown or phony.

The first solid evidence appeared last week that the energy shortage —whatever its causes or true dimensions —is hurting the economy. The Federal Reserve Board reported that industrial production fell .5% in December, the sharpest drop in 2½ years. Main causes: a decline in utility output as consumers cut their use of electricity and gas for the first time since World War II, and a slump in the auto industry. In the first ten days of the new year, automobile sales were off 27% from last year. General Motors' deliveries were down a staggering 42%, largely because buyers were spurning big cars; but American Motors, which specializes in smaller autos, had a 33% increase in sales.

The Commerce Department announced that real growth for the economy as a whole slowed to 1.3% in 1973's fourth quarter. It was the smallest rise since late 1970 and a sign that a recession may well begin in the current quarter. William Simon, chief of the Federal Energy Office, said that he expects that the energy crisis could wipe out upwards of 1.8 million jobs. If so, that would add about two percentage points to the present 4.9% unemployment rate.

Many businessmen do not doubt that the energy shortage is real and acute. Officials of Consolidated Edison put the New York City area on a round-the-clock 5% voltage cutback because the company had only a 9½-day stock of fuel left; that supply was dwindling steadily, and late last week FEO officials agreed to help Con Ed increase its reserves to a twelve-day supply. Airlines were also running short of fuel. Figuring that conventional sources of energy will remain scarce and costly, executives of RCA announced in Manhattan a major investment in solar energy. Next year the company will build a $6 million con-ference-and-dining-room addition to its Rockefeller Center skyscraper that will use solar energy for lighting and heating, though engineers at work on the project have not yet decided which solar processes they will employ.

Pump Appointments. Gasoline supplies remained capricious—plentiful in some places, scarce in others. On the 68-mile stretch of highway between Santa Fe and Albuquerque, well-supplied motorists continued to zip along at 70 m.p.h., in violation of the new 55-m.p.h. nationwide speed limit. Elsewhere, station owners, whose gasoline deliveries have been cut, are awash with fuel because customers have so drastically reduced their driving. At Walter Paul's Shell station in McDonough, Ga., just off Interstate 75, sales were running at half last month's rate, even though Paul has two-thirds of last month's supply. "Here I am, not able to sell the stuff," he laments.