ONE OCCASIONAL satisfaction of living in Washington, amid the ebb and flow of rancid chatter, is the chance moment when your own half-baked opinions are corroborated by a sober computer.
This doesn't happen every day, but there are so many well turned computers at work in this city, rendering serious findings on the great issues, that sooner or later one of them is bound to agree with you (or me) on one subject or another.
This time, I came across an impressive computer analysis of world energy prospects, done by two neutral economists at Resources for the Future, which says with hard numbers and complicated charts what I always figured was true:
The world is not rinning out of oil, not for a long time. The "energy crisis" widely predicted for 1985 will more likely arrive in 2010 or later. That's 30 years from now, a long time to pay through the nose for crisis-inflated oil.
Listen to your entrails. Most people in Washington do this in forming their opinions, but they rarely will admit it, even to themselves. Intelligent people will get up an make the most preposterous statements, if they have a multiple regressive analysis from Brookings or Cambridge in their hands. Visceral hunches are fallible too, of course, but cheaper and more democratic than computer studies. Everyone has access to them.
My own "America First" energy policy was developed a few years ago in conversation with a friend, a lawyer who represents a couple of "Mom and Pop" drilling companies before the gargantuan federal energy bureaucracy. He was telling war stories, unbelievable tales of chaos and insanity in the trenches. He started sending me copies of federal regulations to show that he wasn't exaggerating.
From there, we addressed broader questions, proceeding from the premise that whatever conventional wisdom guides government policy, it is probably wrong. I take this on faith. But my friend used to run a federal agency, so he knows.
We asked primitive questions and drew speedy conclusions. Over a few beers on a Saturday afternoon, these complex global problems became quite manageable.
For instance: Right now, while the United States is supposedly running out of oil, the oil companies are desperate to sell some of it to Japan. This oil-our oil-is pumped at great expense in arctic Alaska and shipped by pipeline and tanker to the West Coast, where it immediately produces a glut - too much oil in California. Meanwhile, at additional great expense, the federal government is buying extra oil from the Arab nations and shipping it to Louisiana where - yes - this oil is pumped back into the ground. This is called our "National Energy Policy."
My friend and I worked out one of our own. Would it not be easier, also cheaper, simply to leave that Alaskan oil in the ground? We went further into the future and concluded that, if the world is really running out of oil (and we remain recklessly skeptical), let's save America's until last, burn up the other guy's first.
This is approximately the reverse of the proclaimed government policy under three presidents (though I will grant that some foreign nations insist that this is the true, unarticulated U.S. approach). Our private notion was that , if the wourld reaches a rocky patch when oil production cannot keep up with demand, any American of normal loyalty would want the U.S.A. to be sitting on the high end of the boat. This is not totally selfish. As the major industrial consumer of world oil production, the United States will someday have the largest management problems in the inevitable transition to alternative fuels.
Meanwhile, just to make sure we don't get gouged by the friendly cartel, the United States ought to be bouncing around the world, from Africa to China to Siberia, doing everything it can to stimulate world oil production. As long as the OPEC production cartel, arm-in-arm with the major oil companies' distribution and marketing system, controls the pumping and selling, they will be free to administer artificial price increases whenever a phony shortage like the Iranian shutdown comes long. Flood the world with oil, then sit down and plan the distant future.
WHICH BRINGS me back to the serious computer analysis done by economist Ronald G. Ridker and William D. Watson Jr. They did not go out from their Massachusetts Avenue office and discover new petroleum. Their study employs the same basic geological data and consumption curves used by other computer studies from MIT to the CIA, the ones which yielded scary headlines of imminent crisis.
The Ridker-Watson study describes a future approximately like this:
World oil resources will be able to keep up comfortably rising consumption for at least 30 years. No price increase is required in the world oil market-repeat, no price increase - until the year 2010. Then the world enters a long and gradual transition period. As oil production falls behind and new alternatives, such as solar energy and coal gasification, are bought into full production, the oil price does rise. From $14 a barrel to $19, in 1978 dollars. When other fuels are in full production, after 25 years or so, oil prices will drop back to $14 a barrel.
Even in the year 2010, this analysis does not foresee a "crisis" in which industrial life comes to an abrupt halt. The market can change, flutuate, adjust without disaster. Ridker believes that all studies, including his own, err on the conservative side. His data, for instance, do not include the spectacular oil reserves now confirmed in Mexico or the vast reserves of so-called "heavy oils" avalible in California and Canada.
But if he uses the same numbers, how come his answers are so different? The short answer, which applies to the CIA or MIT as well as Ridker-Watson, is that there in no such thing as a "neutral" computer. Every analysis of the future feeds into the outcome certain assumptions on what seems likely to happen, given the economic rules and our feeble understanding of human nature. Among other points, the crucial premise which makes Ridker-Watson different is this:
UNLIKE THE DOOM studies, which assume hostile political decisions by foreign governments, Ridker-Watson assume that oil will continue to be bought and sold like other global commodities - wheat or coffee or rice. This means America may buy Arab oil or Chinese oil or even Russian oil, if the price is right.
Does that sound crazy? The presiding policy makers, whose thinking is still molded by a generation of East-west ideological warfare, cannot entertain this conception of the world. It sounds repugnant to them, also far-fetched. Yet if we look at recent events, we see China clamoring for U.S. expertise to develop its vast petroleum reserves. The Reds in Hanoi were doing the same with Vietnam's offshore oil until the Carter administration brushed them aside. The Soviet Union has been trying for a decade to get American help to exploit its Siberian gas and oil fields. The available evidence argues that the Commies want to sell us oil and gas. So let's make a deal.
The experts on looming "crisis" will naturally regard this thinking as soft-in-the-head, but our "America First" approach actually would require enormous courage and clear-eyed calculation, in political terms. It would challenge, among other things, the investment stategies of the major oil companies and ask whether their interests are not divergent from the nation's. It would get beyond Cold War definitions of the possible and also the Cold War's indulgent use of American military power. It would entertain new economic relationships with our North American neighbors, Mexico and Canada, both of whom hold extraordinary resources. This kind of stategic thinking would look beyond the nest OPEC meeting and depend upon information somewhat more complete than the Mobil ads. This kind of thinking is missing from the present government.
Ridker and Watson, in fact, come out on approximately the same ground where my lawyer friend and I were drinking beer. Stimulate worldwide production, husband carefully America's dwindling pool. Only their conclusion is based on hard data, not hunches.
Ridker and Watson warn: If the United States and its industrial allies "use their own resources first and turn to OPEC when theirs are inadequate, as appears to be happening, a time will come when the principal remaining petroleum resources of the world will be controlled by the Communist countries."
To put it primitively, we can trade with the Commies now, when ourleverage is good, or we will surely trade with them later, when we are desperate.
Now that's what I call a hardheaded, forward-looking energy policy. It looks at the world in real terms, beyond the fog of "crisis" propaganda. And it puts America first. Surely, everyone will drink to that. CAPTION: Illustration, BAS in Tachydromos, Greece