Energy: Oil for the Lamps of Reagan

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A new breed of advisers will push for more production

Ronald Reagan has some good energy news to greet him next month when he takes office. Americans are now using less fuel. Each American this year will use up an estimated 350 million B.T.U.s of energy (the equivalent of 60.3 bbl. of oil), as compared with 358 million in 1979. In addition, the U.S. so far this year has been importing 19.4% less foreign oil than in 1979. Domestic drilling activity is also at an alltime high, as wildcatters dig wells in the prairies of Wyoming and off the coast of Alaska.

The President-elect, though, also faces a darker side of the energy situation. Total U.S. crude oil consumption this year is about 16.8 million bbl. per day, and 6.7 million bbl. of that is imported. Despite their heavy drilling, oilmen are finding fewer gushers. By 1990, U.S. oil production will have diminished by about 20% from current levels. Thus, the U.S. will continue for most of the decade to be vulnerable to Middle East petroleum cutoffs and exorbitant OPEC price demands.

The energy philosophy of the outgoing Carter Administration and that of the new Reagan team do not vary greatly. Underlying both approaches is a desire to find and tap more domestic fuel sources. But the programs of the two administrations are likely to be very different in degree and pace. Reagan has already indicated that he will pursue the goal of increasing domestic energy production, especially of oil and gas, much more aggressively than Jimmy Carter.

The President-elect has a long commitment to the concepts that the U.S. will have to produce, rather than conserve, its way to energy sufficiency and that the free market, rather than the Federal Government, should play the main role in developing future energy sources. "I would get the Government out of the energy industry and turn oilmen loose in the marketplace," Reagan told campaign rallies. The new Administration, therefore, expects to emphasize production by decontrolling natural gas prices before 1985, when controls are due to languish anyway, and to maintain the timetable set up by the Carter Administration for phasing out oil price regulations by the fall of 1981. Reagan has also indicated that he would open up federal wilderness areas of Alaska and more offshore land for exploration and drilling.

The policy advisers around Reagan are very different from those who surrounded Carter. Environmentalists and consumer advocates have been replaced by oil company executives and geologists. Reagan's main cicerone through the tangled thicket of energy policy is Michel Halbouty, 71, an unpolished and sometimes profane wildcatter who looks like the suave character actor Vincent Price. Reagan last August appointed the feisty critic of government regulation as chairman of his Energy Policy Task Force. Since then, Halbouty has been able to recruit an impressive roster of corporate chieftains from Shell Oil, Standard Oil of California and Du Pont to serve with him.