ABOLISHING the Energy Department was a bad idea when Mr. Reagan first proposed it in 1980. It's still a bad idea. The White House is considering a plan to send Don Hodel, the secretary of energy, back to the Interior Department with the surviving fragments of his present organization. That won't work, for reasons to which the White House appears to have given little thought.
First reason: The Energy Department's largest single responsibility is to build the nuclear weapons for the armed forces. If the department is dissolved, who will run the weapons laboratories? Since 1946 it has been settled policy in this country that those laboratories remain under a civilian agency, not the Defense Department. But the Interior Department, decentralized and loosely run, doesn't look like a good prospect. The national laboratories are a vital asset to this country, and they need to be under a politically responsible official of Cabinet rank who is prepared to give them the attention that they require.
Second reason: The United States is drifting slowly toward a shortage of electric power. For reasons that are chiefly financial, utilities have been scaling back their construction plans for new generating plants. If the country stays on its present track, the demand for power will begin pressing the limits of supply some time in the 1990s. To avoid brown-outs, the utilities would then probably resort to the kind of quick fix that is both expensive to the consumer and wasteful to the economy. A modest amount of federal leadership over the next several years could greatly reduce the costs to the public of a power squeeze in the next decade. But that leadership isn't likely to come from the Interior Department.
Third reason: The Energy Department was established in response to the oil shortages that followed the embargo during the Middle Eastern war of 1973. Sometimes people at the White House say that energy prices are best left to the market. But in that kind of a crisis, markets overreact violently. After 1973, and again after 1979, prices shot wildly upward with enormous damage to the American manufacturing industry. Then they slowly sank, compounding some of the previous injury. The past decade's cycles of high inflation and unemployment began with the 1973 oil embargo. Sensible policy lets orderly markets work -- but does not let sudden destructive jolts overwhelm them. The Energy Department is now equipped to make useful contributions, if there should be another break in the oil line.
The world is still heavily dependent on Persian Gulf oil, and there is still a war going on along the gulf's northern coast. Can the White House really be sure that there won't be any more disruptions in the oil supply? So sure that it can safely cancel the insurance policy?