The Powder River is almost as dry as its name these days as it trickles through this dusty wheat and cattle-ranching town. And odd as it may seem, that could be a very bad omen for President Carter's new energy plan.

The link between the nation's energy future and the water level lies in the president's call for development of a synthetic fuel program massive enough to churn out the equivalent of 2.5 million barrels of oil daily by 1990. That requires two critical western components -- coal and water.

The coal is here in abundance -- millions of tons conveniently close to the surface in rich veins stretching between southeastern Montana and the high plains of eastern Wyoming.

But water is another story. Synthetic liquid fuel plants, the type currently favored by administration energy experts, are voracious water consumers. One such plant alone will require nearly 30,000 acre feet of water annually at 325,900 gallons per acre foot. (An acre foot is the amount of water required to flood an acre of land to a depth of one foot.) Some experts believe it will take as many as 20 coal liquefaction plants in the northern plains coal fields to meet the president's goal.

Such development, leaving aside other environmental considerations, would mean a massive strain on the region's water supply, particularly during the late summer dry season when ranchers and farmers tap heavily into the rivers.

Despite recent assurances from experts in Washington that there is enough water for synfuel developers and western agriculture alike, signs are growing here that the synfuel program is headed for stiff opposition over the water issue.

"They're crazy in Washington if they think there's enough water here for everybody when that river is low," said Barbara Archer, who with her husband, Walter, ranches 10,000 acres just outside Broadus.

Last month the Archers and about 20 other local ranchers gathered in Broadus' tin-roofed community center to organize local opposition against any federal demands for water for synfuel development. Environmental officials say at least a dozen other groups, some with as many as 1,000 members, have begun similar organizing against the president"s plan.

"Water has always been the key to anything that happens out here," said James Posewitz, an official of Montana's Fish, Wildlife and Parks Department. "I can assure you that any attempt by the Feds to take away the states prerogative to allocate its water is certainly going to be resisted."

In fact, the environmental aspects of synfuel may be overshadowed by the state's-rights issue, a long-simmering problem between Washington and the West.

To succeed, the government may have to try to flex its muscle against the states. The Energy Department, in an environmental analysis of liquid fuel development released last month, noted that "distribution rather than quantity is the problem" with water. The department suggested that "either new or storage, inter-basin transfers, changes in present use, or use of ground water would be necessary to some extent" to develop the synfule program.

The DOE analysis and a more detailed study now being done by the U.S. Water Resources Council look to the Yellowstone River and its tributaries, such as the Powder, Tongue and Big Horn rivers.

In a letter to DOE, council director Leo M. Eisel predicted that development of coal and oil shale technology could require investments of more than $1 billion in water facilities in the West. Eisel noted that major water projects take 15 to 20 years to complete.

The report by the council, which is composed of representatives of all major federal water agencies, is not due until the fall. But according to officials of the group, it is leaning toward recommending a massive tap on the Yellowstone near Sidney, Mont., on the North Dakota border, as well as smaller taps further upstream.

The tap would divert 300,000 acre feet or more from the river into a 190-mile aqueduct between Sidney and Gillette, Wyo. Snythetic fuel plants could then be built along the aqueduct, which would run through the heart of the coal fields here, the water experts said.

The federal experts predict that even if the tap was greater than 300,000 acre feet to accommodate other industry likely to be built near synfuel plants, it would hardly affect the annual 8.6 acre foot flow of the Yellowstone past Sidney. The experts chose the location because most of the state's farmers and ranchers already have withdrawn their water needs at that point.

But officials here criticize the federal plan on two counts.

First, they say the federal experts failed to estimate for low-flow years when water in the Yellowstone and its tributaries drops precipitously. State experts, in recent interviews, said the federal figures on the river flow are averages that disregard actual low flows on the Yellowstone at Sidney. They voice concern that in low-flow periods the farm water would be cut back so synfuel plants downstream could continue.

A second concern here is that federal energy calculations don't account for so-called "in-stream reservations" of water in the Yellowstone, which the state enacted this year.

The reservations grant water allocations from the river for agricultural and municipal uses and require that a huge amount of Yellowstone water -- up to 6.9 million acre feet per year -- be left in the river as it passes Sidney on its way out of state to ensure that overall water quality remains high in the river.

The 671-mile Yellowstone is the nation's longest remaining free-flowing river outside of Alaska. State officials and environmentalists here are alarmed that synfuel development using water from the Yellowstone and its tributaries would someday require building dams on the river to ensure water supplies during low-flow periods.

To question about the validity of the state's claim that it has the right to determine who gets the water from Yellowstone, officials say the U.S. Supreme Court has already ruled that a state which has begun formal adjudication of its water allocations can preempt federal claims. Montana began such a process several years ago.

State officials here note that the last federal attempt at a massive synfuel program in the West -- the Nixon administration's ill-fated Project Independence -- collapsed in part under western opposition to claims on its water. "This time," said a state official, "we're infinitely better prepared and we're infinitely better protected."