Horrible Conglomeration

I believe that we have now got such a horrible conglomeration of confusion in the energy field that nobody knows what is going to happen." So said Jimmy Carter --two years ago. His solution then was the creation of a new Cabinet-level Department of Energy, now budgeted at $11 billion a year and staffed by 20,000 employees. Yet his description of the situation serves as well today as it did before the department was created.

Last week, as he ended his domestic summit at Camp David, no one was more aware of the problem at DOE than Carter himself. One solution being discussed: to create an energy emergency board to expedite projects that DOE has been handling and a separate Government corporation to oversee the production of synthetic fuels. Said a top DOE official: "If they do all that, we might as well close up shop over here."

That could please a lot of people. Says New Hampshire Senator John Durkin: "The performance of DOE has been, at best, abysmal. It calmly presides over shortages, massive increases in profits, and a messed up allocation system."

It was Congress itself that wrote the mishmash of laws that the department tries to administer. Still, the department has added to its own woes.

-- Gas Prices. Despite statutory limits on prices and profits at the retail level for gasoline, the agency's own regulators admit that as much as half of the gasoline sold today is priced higher than the law permits. With only 400 inspectors to police 225,000 gasoline retail outlets, enforcement has been futile. This week the department will increase the legal profits retailers can collect. Thus stations, some of which have closed down in protest, may be able to raise prices another nickel a gallon.

>-Strategic Storage. One of the most critical functions given to the department was creation of a strategic petroleum reserve, a 1 billion-bbl. oil stockpile designed to offset shortages created by such interruptions as the Arab oil embargo of 1973. But when Iranian production was cut earlier this year, that reserve, which was supposed to stand then at 250 million bbl., had reached only 60 million bbl. Incredibly, DOE had not installed the pumps necessary to retrieve the oil from the Louisiana salt domes into which it was being pumped. Those pumps were finally installed last month.

> Gas Allocations. Working from a 400-page set of regulations governing the amounts of gasoline to be distributed to various parts of the country, the department has attempted to foresee changes in demand and to match them with potential supply. It has failed. Even Energy Secretary James Schlesinger says his department's rules have "put the gasoline where the cars are not." Shifting of supplies has alleviated problems for some areas while worsening them for others. Two weeks ago, 21 states were experiencing gas lines. At week's end, the department again modified allocation rules to limit supplies for new stations and to stiffen standards by which agricultural and defense users get gasoline.

Many of Carter's closest aides have urged that Schlesinger be sacked, if for no other reason than to symbolize a change in energy policy. But there are also more practical reasons. As a top energy official said last week: "He does not get along well with anyone except the President and some Armed Services Committee types like [Senator] Henry Jackson. His personality was his own greatest enemy in this job, and a lot of our problems stemmed from that." The official also criticized Schlesinger's managerial methods. Said he: "Schlesinger basically takes over those parts of the department he wants and then forgets the rest, yet he is unwilling to give management control to individuals."

The political crossfire has taken its toll, and Schlesinger's highly respected deputy John O'Leary announced last week that he will quit come September. That loss will do nothing to still criticism of the department. Explained one O'Leary aide: "The political infighting, the long hours, the constant verbal battles with Congressmen, heads of interest groups and officials here in the department were just too much."

O'Leary himself, while refusing to criticize the White House, confesses to political exhaustion: "Even if I was going to stay around here, I would have to take the entire month of August to recuperate. I cannot go on at this pace." At the same time, O'Leary defends his department and contends that given time, it could do its job well. Adds O'Leary wistfully: "No new department has ever gotten on its feet in less than five years. What we really need is six years of peace." That is an unlikely prospect for those who are supposed to fight the moral equivalent of war.

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