THERE IS SOMETHING about the Billy Carter scandal that suggests the old saying about not being able to see the forest for the trees. With the Carter affair, some see lies and others see treachery and still others hint at crimes that we have yet to imagine. The real scandal, though, could be seen by stepping back a bit. It's our relationship with Libya.

The relationship is an interesting one. They supply us with oil and we supply them with money. We use their oil mostly in cars and they use our money mostly to foment revolution and kill people. Things are a bit more complicated than that, but not much.

In some awful sense, Libya has become our new Iran, only in reverse. We are beholden to it for oil -- some 600,000 barrels a day -- but instead of it being our client state, we are its. It sacks and burns our embassy, takes our citizens prisoner, sends money to countries and organizations that are our enemy, comes to the rescue of Ida Amin and bestows huge rewards for meritorious service to terrorists like the ones who killed the Israeli athletes at Munich. For all this we have a response: We get uncomfortable. a

None of this has dissuaded Billy Carter from doing business with the Libyans, but then none of it has dissuaded the U.S. from doing the same thing. If Billy Carter could not turn down their money, neither could we turn down their oil. If anything, Billy Carter is in the enviable position of being able to claim that he got something from the Libyans without offering much in return.

In a way, Billy Carter has provided us with something of a service. His very presence at the heart of this affair shows how we have been unable to come to grips with Libya -- how we want the oil, but hate all the things we have to do to get it. In this morally vacaous relationship, a man like Billy Carter could operate.He could not have operated with the Soviets, an enemy, or with Britain, an ally, but only with a country like Libya with which we have a policy of not having a policy. Because of oil, we simply can't afford one.

It's hard to argue that we ought to tell the Libyans to take their oil and peddle it elsewhere. They supply something like 10 percent of our needs and no one wants to return to the gas lines of yesteryear or, worse yet, those winters with not enough fuel oil to go around. But it's just as hard to escape the conclusion that our lack of an effective energy policy and our reliance on Libyan oil has gotten us into this predicament. Compared to that, Billy Carter is nothing but a sideshow.

This is not to say that it was okay for Billy to peddle his influence with his brother or for his brother to allow him to get away with it. But none of that changes the fact that both Carters are nothing more than pawns in this situation. Billy was used first by the Libyans and then by his brother -- not a one of them caring for a second what he actually thought about anything. As for the president, he is caught up in an energy crisis, forced to do business with the Libyans and apparently thinking he had no option but to use Billy, the emissary the Libyans wanted -- and paid for.

Somewhat the same thing applies to the inevitable analogy for the Billy Carter affair: Watergate. It, too, had gripping personalities and it, too, had wonderful examples of ineptness and lying, but it would be wrong to see Watergate only as a tale of men going wrong. That happened because the institutions permitted it. The presidency ran amok, the CIA got out of hand, and the political system, especially the fund-raising part of it, went off on its own, controlled by almost no one.

It is the same with the Billy Carter affair. It is only partially a story of personalities. It is really the story of the inability of our nation to deal with a bandit regime because we have neither the will nor the capacity to say "no" to oil. Beggars, after all, can't be choosers.