THAT RACKET you hear from the Middle East is opportunity knocking. It's telling us that when it comes to energy policy, the moral equivalent of war is vastly preferable to the real thing.

Before we can capitalize on that opportunity, however, we have to dispel two dangerously common misconceptions. One was voiced last Tuesday night by Rep. Richard Gephardt in delivering the Democratic Party's reply to President Bush's nationwide address. "For a decade," Gephardt said, "America has been left with no real energy policy at all."

Nothing could be farther from the truth. The nation has a clear policy, the vigorous and consistent pursuit of which has inexorably impelled us in the direction of war. Put simply, it calls for the United States to intentionally increase its reliance on Mideast oil and, when necessary, wage war to keep cheap oil flowing. Marines now swelter in the blistering heat of Saudi Arabia in large part because of what may be called "The Stockman Doctrine," after David Stockman, who became Ronald Reagan's first director of the Office of Management and Budget. In the Fall 1978 issue of The Public Interest, Stockman pilloried the energy self-sufficiency proposals of the Nixon-Ford-Carter administrations as "cramped, inward looking" strategies based on "Chicken Little logic." Calling for a strategy of "reliance on the world market for energy," he dismissed fears of OPEC extortion as "economic mythology." Avoiding dangers, he argued, requires "only two policies -- strategic reserves and strategic forces."

To this day, the Stockman cheap-oil strategy remains the nation's real energy policy. For example, President Bush last Tuesday called on Congress to "enact measures to increase . . . energy conservation." Yet his administration continues to oppose a Senate bill to boost the mileage standard for cars (from the current 27.5 mpg to 34 mpg in 1995 and 40 mpg by 2001), a bill which could completely eliminate oil imports from the Persian Gulf by saving 2.8 million barrels of oil per day.

Bush also called for enactment of "fuel switching" -- presumably a reference to his widely publicized "clean fuels" proposal of 1989 which would have converted 9 million cars in our dirtiest cities to cleaner fuels such as electricity, ethanol, methanol and natural gas -- all available from domestic sources. But in back-room meetings with Senate negotiators over amendments to the federal Clean Air Act, White House aides abandoned the clean fuels program, agreeing instead to continue reliance on "reformulated" gasoline -- and the so-called free market in oil.

Therein lies the second dangerous misconception of the current Gulf debate: that the global oil trade is a classic free market. It isn't. About 75 percent of the world's oil is controlled by the OPEC cartel, many of whose members are, at best, uneasy allies of the United States and, at worst, outright enemies. The hand on the pump is not Adam Smith's: It is Saddam Hussein's, Moammar Gadhafi's or Ayatollah Ali Khamenei's. How Petroleum Makes Policy The Stockman-free market doctrine has obliged the United States to surrender something vastly more important than money: independence. Moreover, the determined pursuit of our present policy -- burn imported oil and fight to get it -- effectively dictates many other policies: National security. Oil imports from the Middle East, which were about 6 percent of our total energy supply in 1973, stood at 12 percent in 1989. Thus we are twice as dependent on Persian Gulf oil (relatively and absolutely) as in 1973. True, the U.S. has 600 million barrels of oil stored in the Strategic Petroleum Reserve -- but that's only enough to replace a complete loss of OPEC oil for about 10 months. As a result, massive military might is required to maintain the steady flow of oil. To be sure, there are excellent moral reasons for our military presence in the Gulf. But the fact remains that as long as imported oil remains the lifeblood of U.S. cars and trucks, we will be at grave risk. National industrialization. Investing in fuels rather than fuel efficiency is implicitly a decision to direct capital and profits towards coal, oil and gas companies rather than to industries that manufacture energy-efficient capital goods. Worse yet, much of the money goes overseas: Cumulative U.S. payments for oil imports between 1970 and 1989 totalled $1.1 trillion in 1989 dollars -- roughly three years of U.S. defense spending. National public works and transportation. A decision to rely on oil and the automobile is a commitment to continued dependence on streets, highways and bridges, rather than rails and rehabilitated housing and neighborhoods. Urban growth and government spending become caught in a vicious cycle: Worn-out highways must be repaired because so many people commute from suburbs that were built around the roads. With no money available to rehabilitate urban housing or construct urban transit, workers have only one way to commute -- in a car. Energy Agenda for the 1990s If we are ever to free ourselves from the threat of buying foreign oil with American blood, we must set achievable goals and then pursue them with the same conviction we brought to putting a man on moon. In that case, we made the commitment, then we figured out how. In the case of energy, however, we already know what to do.

At the outset, a rational energy policy must acknowledge something that Americans seem to have forgotten: "Government" is not a dirty word. It is, after all, government which is protecting the Mideast oil lifeline; government which fills the Strategic Petroleum Reserves; and government which in the '70s mandated the policies of conservation and fuel efficiency that have (so far) cushioned the impact of the Iraqi invasion.

Whatever the policy, the first two priorities must be cars and power plants. Cars because they burn roughly half the nation's oil, creating about half the air pollution {see box}; utilities because they consume about 33 percent of the energy and because they are notably inefficient.

There are those -- including President Bush -- who say the answer to America's voracious appetite is to feed it more oil by opening reserves in Alaska, California and elsewhere. Such a strategy ignores both reality and recent experience. Nor can it provide for our long-range security. The reason is simple: The world may not be running out of oil, but the United States is.

The federal government collects data on oil already discovered (called "reserves") and oil which might be found ("resources"). According to optimistic estimates of both, we now have a 25-year supply at current rates of consumption -- less if the price falls again. Yet even when prices were high, production was steadily declining. Our cheap and easy oil has long since been found and burned; America is punctured by 600,000 wells compared to 6,000 in the Middle East. According to World Oil, a trade magazine, three-fourths of the world's dry holes last year were drilled in the United States. The number in Iraq: zero.

What about Alaska? Between the last oil crisis and this one, most of the North Slope oil was burned. Pressure is mounting to open up the Alaskan wilderness. How much oil is there? No one is sure. The most optimistic estimates put it at 29 billion barrels, though according to the U.S. Geological Survey, there's only a 5-percent chance of resources that large. But even assuming that we have that much -- and that it would be economically and environmentally possible to get every last hypothetical drop out of the frigid ground -- it could fuel the nation for only five years. A more likely outcome is a six- to 12-month supply (again assuming that prices stay high enough to make drilling cost-effective), after which we'd still have only one place to turn -- OPEC.

Thus, the first goal has to be to get off of oil -- from any source. The United States should commit itself to a 50-percent reduction in oil consumption by the year 2000. That is roughly the share of U.S. oil that would be imported by the turn of the century. Drastic changes are also needed in our use of coal, the chief producer of greenhouse gases and acid rain and a major factor in smog formation. A sensible target is a 50-percent reduction by 2020 -- by which time most U.S. power plants will have reached the end of their useful lives and can be replaced with cleaner, more efficient versions. (It is unlikely that Americans will tolerate massive expansion of atomic power with current technologies; and new, supposedly "meltdown-proof" designs could not make a significant contribution before the next century, if even then.)

Does that kind of reduction sound alarmingly drastic? It shouldn't. It's not only possible, but can be accomplished with existing technologies and policies that Americans have already shown themselves willing to accept.

Among the proven options is cogeneration, which involves putting the heat that would otherwise be wasted to some use: warming homes, offices and apartments or even running manufacturing processes. Sweden relies heavily on cogeneration; and Japan has emphasized similar efficiencies, with the result that their firms produce 11 percent more electricity -- and twice as much steel -- per unit of fuel consumed than we do.

Moreover, we have achieved extraordinary energy savings before, thanks to policies implemented during the administrations of Nixon, Ford and especially Carter. Automobile efficiency standards doubled the mileage of new American cars; insulation standards drove down the household consumption of energy; and energy pricing policies and government funding programs spurred development of highly efficient, promising new technologies.

One result was that there is a vast array of energy-saving techniques and new fuels waiting to be deployed. For example, huge trough-like mirrors capture and convert enough solar heat to produce electricity for 300,000 homes in Southern California. Solar-voltaic technology is within reach of competing with coal-, oil- and natural gas-fired plants. What is needed now is not more research, but purchase orders.

Electric cars and vans are ready to hit the street, but they can't compete with gasoline, which is cheaper than bottled water. Ironically, the government put an electric car on the moon, but the Big Three can't put one on the Great American Road. Ethanol can power homes and cars. Light bulbs, refrigerators, furnaces -- all are now two to 10 times as efficient as they were in 1973.

Having coasted for 10 years on the momentum of these and other efforts, it's time to put the pedal to the metal. Some suggest that we start by taxing crude oil or gasoline, citing studies such as the EPA's recent finding that a $1.24 increase in the pump price of gas would cut consumption roughly 24 percent -- yielding a $24-billion annual saving. But taxes are a tool, not a policy. First we need the plans for a new house, then perhaps a hammer to build it.

What could be achieved? Based on a 1988 staff analysis by the Office of Technology Assessment, an aggressive conservation program might resemble the following:

Action : Equip new cars with existing technologies ranging from four-valves-per cylinder to sleeker designs that catch less wind. These could boost average mileage to 43.8 miles per gallon, according to a study conducted by the American Council for an Energy Efficient Economy, a non-profit research group based in Washington. Then mandate other state-of-the art technologies to boost mileage or require non-polluting fuels. (General Motors has designed one electric car prototype and begun work on a second.)

Result : Automotive gasoline consumption is cut by 75 percent, oil imports by 50 -- about $30 billion a year at present prices. As an added bonus, carbon dioxide, the most difficult of pollutants to control, would drop by 50 percent or more.

Action : Put federal limits on carbon dioxide emissions equivalent to a coal-fired powerplant operating at 75-percent efficiency (the current average is about 35 percent). Utilities could switch to cleaner fuels, upgrade to improve efficiency or replace plants with new, cleaner-burning systems. Powerplants in Europe regularly achieve efficiencies of 90 percent by utilizing heat instead of wasting it, and California now generates 17 percent of its electricity from alternate fuels -- up 11-fold since 1977.

Result : Utility fuel consumption declines by up to 50 percent.

Action : Require that when furnaces, air conditioners, hot-water heaters or refrigerators are replaced, the new units must be the most efficient available. Many local building codes already require replacement toilets to be water savers -- the same could be done for furnaces. Or try the British Columbia approach: The state pays the salesperson a bounty for each high-efficiency appliance sold.

Result : Assuming continued population growth, total household energy consumption is capped at 1985 levels. Pay Now or Pay Later Some would say that such a program would be the end of consumer freedom of choice. They confuse change with sacrifice. It was a change to develop a vaccine for polio, and it no doubt had a grievous effect on manufacturers of iron lungs. But certainly it was no sacrifice. What Americans want isn't a gasoline-fueled car. What they want -- and will pay for -- is convenient, safe and comfortable travel.

Others will say that such a program would deal a devastating blow to the U.S. economy. Yet somehow the Japanese, German, Swedish and other economies already do quite well using roughly one-half as much energy per capita as the United States. To think that the technological genius of a nation capable of building a warplane invisible to radar and a submarine silent as a winter's night cannot build efficient cars and buildings is an insult to America.

In truth, the war to free America from oil -- and Iraq -- needn't have been fought in Kuwait. The weapons to win were developed years ago in our laboratories and proving grounds. What we need are leaders with the courage to deploy them.

Profligacy On Wheels

TOTAL motor-vehicle fuel use in the United States has risen nearly 40 percent since 1970 -- despite a doubling in new-car mileage ratings. One reason: The nation's population has grown by about 50 million since 1970, and so has the number of motor vehicles. Another reason: The number of trucks on the road has tripled -- and their fuel consumption doubled -- since 1970. One third of all U.S. energy is devoted to transportation -- more than any other industrialized nation with the possible exception of Australia -- and it is climbing.

Yet since 1973, oil consumption has declined in many other major sectors of the economy: Electrical generation is down 50 percent, as is heating; industrial use has dropped 10 percent. But transportation? It's up 20 percent.

Curtis Moore, former counsel to the U.S. Senate Committee on Environment and Public Works, is an environmental analyst. S. David Freeman, formerly head of the Tennessee Valley Authority and energy adviser to Presidents Nixon, Ford and Carter, is general manager of the Sacramento Municipal Utility District.