Dr. James B. Edwards said yesterday that he used to favor abolishing the Department of Energy, but the idea has lost much of its appeal since he was nominated to be energy secretary.

Instead, the former South Carolina governor told the opening of his confirmation hearings that he wants to "unshackle the sleeping giant" of American industry to produce energy for continued economic growth. "There has to be some sort of focus for energy policy," he said. "we'll have a Department of Energy until you gentlemen [in Congress] decide otherwise."

The Energy and Natural Resources Committee was clearly glad to hear that. "You're a natural fast learner," said Sen. Spark Matsunaga (D-Hawaii).

President-elect Ronald Reagan said during the campaign that he intended to dismantle DOE, and Edwards said when he was nominated for the Cabinet post that he was eager to go to Washington and "work myself out of a job."

Edwards, 53, a practicing oral surgeon, ducked many questions about specific energy policies with the reply that he had yet to study the issues. He said he wants to "dismantle some of the regulatory apparatus at DOE" but declined to predict any budget or personnel cuts.

He will recommend refilling the strategic petroleum reserve and decontrol of oil prices "as soon as possible," he said, but, in regard to natural gas prices, he said he will study the situation further. Edwards took no position on continuing the Synthetic Fuels Corp., but firmly favored more deep-water port construction to boost coal exports.

A proposal from Reagan's energy transition team to combine the Energy and Interior departments into one Cabinet-level department of energy and natural resources also will need a lot of study, Edwards said. "I'm not waffling; it's just a desire to get adequate data," he said.

The graying, soft-spoken Edwards repeatedly endorsed the production approach to energy self-sufficiency over other methods and emerged as a strong defender of the oil industry. "I wish we could conserve ourselves into full employment in this country but I don't believe we can," he said. "I believe we've got to produce, produce, produce."

Edwards hedged on the oil profits tax, saying he would "look at it very carefully" but that he was philosophically opposed to it. "Profits are a driving force of this country," he said.

Money flowing to the Arab oil cartel worries him more than U.S. oil company profits, he said, "because a lot of little people out there own stock in the oil companies and they are the ones benefiting." Any antitrust worries, he said, are the responsibility of Congress.

Sen. Howard Metzenbaum (D-Ohio) worried that Edwards had ignored consumer and environmental concerns as South Carolina governor, failing to name any consumer representatives or environmentalists to a private Energy Research Institute foundation, though its charter called for such representation. Edwards admitted that "In retrospect we have neglected the consumers," and said he would not do that as energy chief.

Asked about a remark in 1975 that South Carolina did not need antipollution laws because of its fresh breezes, Edwards said he doubted the quote was correct, "and if it is I would revise it." He had found, he said, that pine trees were emitting hydrocarbons, an air pollutant, "and I probably had some strong words to say about that" -- indicating he did not believe his state needed to be protected from its trees.

Reagan has been subject to some gibing because of a well-publicized comment that trees could be called air polluters. The Environmental Protection Agency has said hydrocarbons are not a problem in forests where there are no nitrogen oxides, as there are in cities, with which to combine to form smog.

Edwards also defended his involvement in a duck hunting partnership on Hutchinson Island near Charleston, S.C., saying an illegal dyke the group built there was "solely to increase wildlife habitat."

Metzenbaum questioned him on the three-year gap between a cease-and-desist order from the Army Corps of Engineers and the group's compliance. "If you don't have law and order in regard to your own operations, how can the people expect it in regard to the oil companies?" Metzenbaum asked.

"We didn't mean to violate any laws," Edwards responded. Negotiations with officials accounted for the delay, he said, and the project is now in full compliance.

Asked what he thought about Three Mile Island, Edwards said the name "conjures up a company that's in trouble and needs some help." The accident at this Pennsylvania nuclear power plant in 1979 "showed that the system worked. Nobody was harmed. Nobody was killed," he said.

After the hearing, Edwards said he was "very pleased" with the "kind and gentlemanly" treatment he received. His nomination is expected to be approved this week without difficulty.