the financing of private utilities' power stations via cheap federal rural-elecrrification loans? Will he cancel pork-barrel federal water projects and charge incremental water users truly incremental c05ts-o£ten tens or hundreds of rimes what thev now pay? June 1981 RAIN Page 19 Will he reject lavish, spendthrift mt>..asures in favor of lean, costeffective investments to ensure national security? These and similar actions could infuriate some powerful constituents. Yet nibbling at the bullet would betray conservative principles and those who voted for them. It would expand unto national insolvency the federal penchant forfiscally irresponsible lemon socialism-throwing taxpayers' money at problems. If the litmus Nuclear power, subsidized by tens ofbillions ofdollars, now delivers about halfas much energy as wood. paper turns a muddy gray, a major national opportunity for efficient management will have been squandered. Whether the Reagan administration decisively pursues an energy policy of free-market competition, individual choice and local selfdetermination or instead caves in expediently_to corporate interests, can go far to determine America's energy future-and to reveal whether our President is truly conservative or merely reactionary. Amory Lovins, a physicist, is the British representative of Friends of the Earth, Inc. L. Hunter Lovins is an attorney. Hits Hard Times Sorry, Amory and Hunter, but the DOE is still not listening. In fact they seem less aware these days than usual. Here, for example, are the "New Views of Energy Policy" taken from the DOE staff working paper on the Third National Energy Plan (NEP III). A 1977 law reqllires the Prl'sident to submit a biennial National Energy Pla n to the Congress. The process involves pllblic hearings around the country to provide input and criticism . YOII'II be heartened to learn that all of the " invited state and local govemment officials" on the regional panel at ollr San Francisco III!aring panned th e plan in its " draft for di scllssion ." It will be hlteresting to see if the final "plan" reflects the input sought, and wllether the " Plan" w;{/ then be implemented in Ollr Energy Policy, or jll51 :;it on a dllsty slulf next to NEP I and II. -CC New approaches will have to be taken to achieve fundamental improvements in the nation's energy picture. The Administration believes that it is important to establish a set of guiding principles: •rh~ nation's energy problems will be solved primarily by the American people themselves- by consumers, workers, managers, inventors and inve.stars in the private sector-not be the government. • The government's role is to establish sound public policies, based on economic principles, national security concerns, and a due regord for environmental values, so that individuals and firms in the private sector have the incentives to produce and conserve energy efficiently, consistent with the national interest. • The government's role is 'lOt to select and promote favored sources of energy. Doing so risks wasting the nation's resources. • Formulation of energy policy must be sensitive to the needs of the poor. But energy policy should not be used as an income transfer program. For example, holding energy prices down for rich and poor alike is an ineffective way to help the poor. • Federal public spending for energy purposes should be limited to those areas where the private sector is unlikely to invest sufficiently, such as in high cost, long lead time technologies with substantial prospects of high pay-off. Public spending should not be used to subsidize domestic energy production and conservation since this buys us little additional security and diverts capital, workers and initiative from more productive uses elsewhere in the economy. • The U. S. government should also take steps necessary to deal with potential disruptions in world oil markets. These steps include increasing strategic petroleum stocks and eliminating controls on oil which discourage the private sector from dealing with disruptions effectively . • The level of oil imports per se is only a rough indicator of the nation's progress in solving its energy problem. The welfare of the American people is inextricably linked to that of people in other countries, so the u.s.cannot insure its own security by a reckless attempt to eliminate imports. • Energy is an international issue and so the American people have an interest in seeing that other countrie~ establish sound energy policies. A first, major step has been taken. On January 28,1981, President Reagan ended the system of controls on the price of oil which for nearly a decade had discouraged both domestic production and conservation . But there remain numerous other barriers to the timely development and efficient utilization of our energy resources. Suggestions are sought from the public on these principles for resolVing energy issues. DO
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