Jimmy Carter's impassioned pleas to cut down on energy use have apparently fallen on deaf ears at the Department of Energy, for the department has been slow to suggest important fuel economies in American industry, which expends about 28 percent of the nation's energy.
Two glaring examples are the steel and paper industires. With the most elementary moves toward the kind of "use-it-up" mentality that guided our hard-up pioneers, these two industries could save millions of barrels of oil a year. And with a little judicious goading by the DOE bureaucracy, they might do it.
The savings could be substantial. For example, every ton of scrap metal that's used in place of iron ore to make steel saves three barrels of oil, according to estimate of government energy experts. And the paper industry uses about 60 percent less energy when it uses recycled paper instead of making its product from trees.
Yet last year alone the United States exported 9 million tons of scrap metal to countries more concerned with the economies of producing steel this way. And the paper industry's own estimates show that 2.1 million tons of waste paper will be exported this year.
The reason for this, economists say, is that both industries are set up to make money from the use of fresh, raw material instead of recycled products. The big boys in the steel and paper industries also own the iron mines and the pulp-paper forests. It's that simple. Thus Bethlehem, U.S. Steel, Weyerhaeuser and Georgia Pacific lack the financial incentive that could lead them to use more secondhand material.
Aware that Big Business needs some prodding in this area, Congress last year passed the National Energy Conservation Policy Act. Among other things, the new law required the Department of Energy to set voluntary recycling goals for the steel and paper industries, among others, by 1987. The two were chosen because they're among the largest commercial users of energy.
But somewhere Uncle Sam's energy sleuths managed to catch the steel and paper industries' lack of enthusiasm for recycling. DOE's recently proposed target for the steel companies is set at 41 percent use of scrap iron -- which Big Steel will probably hit this year with no trouble. The goal for the paper industry -- 22 percent recycled paper -- is modest indeed, considering the 40 percent recycling rate in the period following World War II.
These modest goals are not surprising when their sources are considered. What's happened is that they were in effect set by the industries themselves, or at least their handmaidens in the consulting game.
The 41 percent goal for scrap iron use, for example, was recommended to DOE by Arthur D. Little, a prestigious consulting firm in Cambridge, Mass. It was hired as an expert in the field to do the DOE study -- though its expertise may very well have come from the considerable amount of consulting work it does for the steel industry.
Even a steel industry official characterized Little's DOE report as looking for "what the mills are willing to do, not what they could do." And the Congressional Research Service questioned both the study's conclusions and the methods Little used to arrive at them.
In Little's defense, Dr. Rair Nadkrani, one of the consulting firm's analysts who worked on the report, claimed that the congressional insturctions to DOE on recycling were "ambiguous." He also said the hired consultant was concerned with "economically feasible" goals.
The target-setting for paper was even more blatantly pro-industry. Much of DOE's work was farmed out to Franklin Associates Ltd., a consulting firm in Prairie Village, Kan. Franklin has done some $220,000 worth of consulting work for the American Paper Institute -- the trade association that represents mainly producers of virgin paper products.
Interestingly enough, Franklin's big consulting project for the paper people concluded that recycling will actually decline from now till 1985 -- barring a change in public policy.
Then incredibly, Franklin was hired as a DOE contractor on the recycling project at the same time it was working for the paper industry. The consultant proceeded to make the prophecy to its business client self-fulfilling -- by recommending modest goals to its government client.
A letter from Franklin to the paper institute makes it clear that this was no coincidence. The letter notes that a Franklin official "suggested reasonably simple modifications" to DOE. William Franklin, the head of the consulting firm, told my associate Peter Grant he recommended that the targets be dropped after the trade association asked him to intervene.
Yet the way the energy agency operates, DOE officials seemed mystified at the suggestion of a conflict of interest on the part of their consultants.