SUPERBRAIN'S SUPERPROBLEM

Jimmy Carter has three weeks left to meet a self-imposed deadline for tackling what may well be the hardest challenge he will face throughout his presidency. Shortly after taking office, he promised to unveil a comprehensive national energy program by April 20. As that date nears, the President is huddling with aides and scribbling pithy comments in the margins of position papers. For the past two weeks, he has been summoning groups of union leaders, oilmen, builders and other constituencies that are likely to be affected to a series of 21 White House miniconferences on energy. For the last, at week's end, 19 ordinary citizens, chosen at random from around the country--including two students, a housewife and a cattle rancher--huddled in the Executive Office Building with Administration energy experts.

Once the plan is completed, Carter intends to announce it himself, most likely in an evening speech on prime-time TV to a joint session of Congress. The touch of drama will be appropriate to the gravity of the issue: whether the U.S. can make a start on assuring adequate energy supplies could well determine whether it can continue to be a major industrial force and one of the world's two superpowers.

The problem is a peculiarly difficult one that the U.S. political system and the American temperament are not well tuned to solve. Since the birth of the nation, energy and the United States have been almost synonymous terms: metaphorically, in the boundless vitality of the American people; literally, in the seemingly inexhaustible supplies of cheap fuel that made possible the transformation of a handful of impoverished colonies into history's richest nation. Frontier mythmakers celebrated the idea that Americans could summon limitless supplies of energy for whatever needed doing, most notably in the tales about Paul Bunyan, who could harness his ox Babe to straighten out the bends in rivers with a single tug. If Faust, the archetypal European, believed that the world was created anew each morn, Americans had a more practical faith: the world and its riches were inexhaustible, easily accessible and--above all--theirs. The American megalopolis of superhighways, hermetically sealed buildings and shopping malls enclosed in artificial climates seems almost designed to squander energy in the unconscious belief that it can never run out.

But it can. The oil and gas that make up about three-quarters of America's fuel were created in finite supply millions of years ago. At the rate they are being burned, they will begin playing out sometime around the year 2000, give or take a decade or so. The power sources of the future--solar, thermonuclear fusion, geothermal and coal-derived fuels--remain just that: visions for the future, with no certainty that such sources will be available when present reserves of oil and gas go into steep decline. And the use of coal and nuclear-fission power is not expanding nearly rapidly enough to fill the looming energy gap. Hence, the U.S. faces the terrible threat of closed factories and cold, dark homes unless its politicians can master a new kind of challenge: taking painful steps now to grapple with a crisis that will not reach its most dangerous point until long after the President, his aides and most of the Congressmen who will vote on his program have ended their terms of office.

To be sure, there have been rumblings, louder each year, of the coming crunch. Natural gas shortages threw more than a million adults out of work, and about a million youngsters out of school, for brief periods during the bitter winter just ended. Power shortages might well close factories and schools and black out homes in the Pacific Northwest next winter, because a prolonged drought has curtailed hydroelectric power production and utilities have not built enough coal and nuclear power plants to take up the slack.

Domestic oil production in recent weeks has hit an eleven-year low. The nation last month imported almost half of its petroleum, leaving the economy dangerously vulnerable to embargoes or price gouging by foreign suppliers. The U.S. bill for imported oil shot up from $2.7 billion in 1970 to $34 billion last year, draining from the country purchasing power badly needed to create jobs. Yet the Nixon and Ford administrations were unable to devise plans that Congress was willing to accept for stretching out supplies. Nixon's Project Independence, aimed at making the U.S. self-sufficient in fuel by 1980, was never more than an unrealistic and empty slogan.

The best measure of Jimmy Carter's seriousness in trying to do better is the man he named to be Mr. Energy, in charge of drawing up the Administration's plan. The President spent extraordinary time and anguish in selecting his top energy aide. Once he made his decision, he publicly labeled the appointment his "most important nomination." His choice: that tall, rumpled, totally unpretentious and incisively brilliant intellectual, James Rodney Schlesinger.

Under Presidents Nixon and Ford, Schlesinger successively headed the Atomic Energy Commission, the Central Intelligence Agency and the Defense Department. To the public, he is best known as the tough-minded Defense Secretary whom President Ford purged in his 1975 Halloween "massacre." It was a lucky firing, in a way, because it made Schlesinger, a nominal Republican, available to advise Carter. The Georgian met Schlesinger for the first time during the campaign; preparing for his second televised debate with Ford, Carter asked Schlesinger, who had just returned from a trip to China, to brief him. The President-to-be was immediately impressed.

Schlesinger, 48, is designated eventually to become Secretary of Energy, a new Cabinet post that Carter has asked Congress to create in order to consolidate the work of three independent agencies and programs now spread among nine of the eleven Cabinet departments. For now, Schlesinger is an assistant to the President for energy affairs. "The energy problem is very simple," he muses, puffing on one of his ever present briar pipes. "Demand is growing rapidly. We are running out of fuel. We've got to do something about it. We have an embarrassment of riches of ideas. The question is: Are we going to do something?"

To some energy hawks, the answer seems to be only a qualified yes. In his first fireside chat, a cardigan-clad Carter called on Americans to make personal sacrifices for the sake of adequate energy supplies. Later, he said he was willing to accept a 10% to 15% drop in his rating in popularity polls as soon as his program is made public. The program only partly lives up to its advance rhetoric. True, it is tough. But it also puts considerably less than full trust in the rigorous remedies of a free market. As Schlesinger puts it: "We are not going to introduce an energy Utopia."

Americans will be asked--possibly even ordered--to conserve energy by insulating their homes and factories. They will have to pay gradually increasing fuel bills, pay higher--and rising--gasoline taxes, drive smaller cars, perhaps breathe air polluted by coal fumes, take the first steps toward using solar energy to heat at least their water, and learn to cope with the perils of nuclear power. But they still will not be required--at least under the options that Carter is most likely to choose--to pay the full world free-market prices for energy or to face immediately the stiff taxes that many economists advocate to force gasoline prices up to $1 or $1.50 a gallon and impose drastic conservation. Nor, mercifully, will they be asked to make any such radical, and unthinkable, alteration in life-styles as moving out of hard-to-heat individual homes into energy-saving apartments.

The program basically seems a cleverly conceived exercise in the art of the possible and probable. Schlesinger is well aware that he faces a series of devilish dilemmas. Letting prices rise abruptly, for example, could aggravate an already worrisome inflation, and cutting back too savagely on energy use could slow economic growth and wipe out jobs. Moreover, a democracy operates by popular consent, and there is as yet no national consensus that a real crisis exists. Many Americans suspect--wrongly--that energy shortages have been contrived by avaricious oil and gas companies out to make greater profits. Beyond all that, Schlesinger properly realizes that the power of Government to cope with energy problems, or for that matter any problem, is limited, and consequently that he should not recommend to the President desirable but politically unfeasible programs. To visitors, he often muses that democracies should not too often demonstrate their own ineffectualness.

To map out a program despite these difficulties, Schlesinger has holed himself up in a bright, pleasant White House suite only a 30-second walk from the Oval Office. There he is surrounded by charts showing excessive U.S. use of energy (Americans burn approximately twice as much fuel per person as West Germans, who have roughly comparable living standards), reports and endless position papers from his staff. The first thing he did when he moved in was to recruit a dozen eager, freewheeling young people, who are unintimidated by their awesome job or their boss, whom they call simply Jim. Schlesinger hired them in his typically low-key way. Often it was just a telephone call: "How quickly can you get over here?" George Hall made it so quickly that he has not yet had time to turn in his ID card and parking permit at the Pentagon, where he was a Deputy Assistant Secretary of Defense. "I have never tried to drag a retinue around with me," says Schlesinger. "I think they should be more interested in their work than in following me around."

"Organized chaos" is the way an aide describes Schlesinger's managerial technique. His aim: to make his staff think, question, argue, analyze. Says one Schlesinger aide: "He is really a seminar leader." He likes to use the sessions to test ideas, and he throws out a lot. "We are really not sure which ones he is serious about," concludes an assistant. Even after he has reached a decision, Schlesinger is likely to end the session on a probing note. "If you think about this some more and decide it's crazy, come back," he will say.

It is exhilarating but wearying work. Schlesinger's people regularly put in twelve-to 14-hour days--like the boss. Late one recent evening, a reporter happened to meet Energy Staffer Dave Freeman in the Executive Office Building's deserted hall. "Jimmy says you can go home now," cracked the newsman. "Yeah," replied Freeman wearily, "but Jim didn't."

When completed, the program is expected to run some 64 pages. Until Carter himself presents it to Congress, Schlesinger prudently refuses to discuss specifics, though he does say that "there is going to be nothing novel in this comprehensive energy plan." Except, of course, that the nation finally will have, for better or worse, a comprehensive plan, focused on what Washington is calling "the two Cs"--conservation and coal.

The aim is to curtail waste of energy and tap the nation's coal reserves so that the U.S. can stretch out oil and gas supplies until past the turn of the century, when new sources of energy, such as fusion, geothermal and solar power, will be coming on-stream in a significant way. Though it is still subject to change, here is how the Administration's new energy program now looks:

CONSERVATION

According to cost-effectiveness studies by Schlesinger's staff, it costs only a tenth as much to save energy as to produce it. Further, the U.S., which makes far less efficient use of energy than almost any other industrialized country, has a lot of power to save. The Administration's goal: to reduce by one-third the annual growth of total energy consumption and cut foreign oil imports by roughly half, to 5 million bbl. per day by 1985.

A major target for saving natural gas and oil will be home insulation. "Your home is your castle," runs one current Washington quip, "but your attic belongs to the Government." At present, as much as 40% of house heat escapes through poorly fitting windows, too thin walls and faulty flues. Schlesinger plans a mandatory program that will force homeowners to insulate whether they want to or not. Enforcement will be through state commissions and local utilities. One proposal: order public utilities to insulate homes and spread out the cost through higher billing to all customers. For added energy saving in homes, utilities will be required to install remote-control switches on central heating and air-conditioning units and water heaters. The heaters and air conditioners can then be turned off for 15 to 20 minutes each hour to conserve fuel while the water heaters can be switched off for two to four hours to ease the peak load.

The insulating program will heavily lean on industries and companies. Plants and office buildings will have to be weatherized to prevent energy loss. New federal building standards will be promulgated to force a switch from energy-squandering buildings that are cheaper to build but more expensive to operate because they must be air conditioned winter and summer.

COAL

According to Schlesinger's estimates, the U.S. has enough coal--"the great black hope"--to last for 400 years. Other experts put the figure far lower, at 50 to 90 years. The supply is adequate to carry the U.S. well past the transition from the end of the oil and gas era to new, possibly not yet discovered sources of energy in the 2000s. The program will count on the profit consciousness of the coal companies, which now mine about 655 million tons per year, as a spur to increasing production to 1 billion or more tons annually by 1985.

Meanwhile, factories and utility power plants now using natural gas will be compelled to switch to coal as soon as possible. The cost to U.S. industry will be incalculably huge; the utility plants alone will be required to spend an estimated $75 billion on conversion. Tax credits and federal loans will be given to sweeten the wrench. Plants that cannot convert from gas will be taxed for its continued use. The energy plan may allow some relaxation of antipollution laws in order to speed up the transition to coal.

AUTO EFFICIENCY

Under the plan, Detroit's beloved dinosaur, thumping its chrome-plated tail, is doomed for the swamps of extinction. The new plan will impose an excise tax on the purchase of large cars. Under consideration as a fallback plan is a gasoline tax, beginning with 5-c- per gal. and rising at regular intervals to 50-c- or $1 in order to discourage Americans from buying big gas-guzzling autos. According to the Energy Policy and Conservation Act of 1975, which the new Administration is embracing, each manufacturer by 1980 must produce a line of cars that achieve an average 20 m.p.g.; by 1985 the average must be 27.5 m.p.g. That is now an impossible goal unless auto engineers make dramatic--and unexpected--breakthroughs in engine efficiency and the use of lighter metals for body construction. Says Schlesinger: "A lighter car that gives 25 m.p.g., v. a heavier car that gives 12 m.p.g., is a relatively minor issue compared with not having cars at all."

PRICE DECONTROL

During his campaign, Carter promised to remove federal controls that hold artificially low the price of some domestically produced natural gas. Under the present counterproductive regulations, gas piped across state lines sells for anywhere from 29-c- to $1.44 per 1,000 cu. ft., depending on when wells started flowing, v. an uncontrolled price of about $2 for gas produced and sold in the same state. That leads to hoarding of supplies within the producing states and shortages elsewhere. The plan will end that by extending federal authority to intrastate, as well as interstate natural gas while raising prices to a level comparable to those of oil. On the oil front, there will also be reforms. Under the present system, there are two different prices for domestic oil, both substantially below the price of imported oil (now selling at about $12.50 per bbl. at Middle East ports). Full decontrol would send domestic oil prices up a third, and the Administration fears the political and inflationary impact. The probable compromise: a gradual relaxation of price controls with a ceiling, or "cap," on the maximum price.

SOLAR ENERGY

At his Inaugural parade, Jimmy Carter's reviewing stand was warmed by a specially constructed solar heating unit as a demonstration of his dedication to the cleanest and most abundant energy source available within existing technology. The energy package will provide federal funds for accelerated research leading to solar electrical generation. It will also give income tax credits up to $2,000 to homeowners who install solar heating units.

STRATEGIC OIL RESERVE

President Ford ordered stockpiling of half a billion bbl. of oil in the U.S. by 1982. Carter will advance the date to 1980. In the event of a new embargo, that amount of oil would give the U.S. just under a one-month reserve at present consumption rates, a small but worthwhile drop in the bucket.

NUCLEAR POWER

Carter, a former nuclear engineer, and Schlesinger, the onetime head of the AEC, might have been expected to put more emphasis on the development of nuclear power as a major part of the solution to the U.S. energy shortage. Not so. Apparently frightened about the possibility of reactor byproducts falling into the hands of irresponsible governments or bomb-building terrorists, Carter has already chopped $200 million from Ford's leftover budget for the development of advanced breeder reactors, which produce bomb-grade plutonium even as they produce energy. The Schlesinger program will call for a modest acceleration in the building of present fission reactors and will place great emphasis on safety precautions. But it will also call for a standardized design intended to speed construction. Owing to a maze of regulations and community misgivings, it now takes up to eleven years to build a reactor in the U.S., v. only 3 1/2 in Japan. Schlesinger's team hopes that standardizing reactor design will shorten construction time.

APPLIANCE STANDARDS

Strict guidelines will be laid down to force appliance makers to produce highly efficient irons, hair dryers, refrigerators, electric ranges and the like. In the long run, thriftier appliances will help consumers to offset, at least in part, rising energy costs. Stringent efficiency standards will also be mandated for factory equipment.

On the whole, this program is indeed comprehensive, and its thrust is in the right direction. But it contains some serious errors and omissions that ought to be rectified. They fall into three main categories:

1) The program relies too much on federal direction, too little on the forces of the free market. Rule 1 in energy conservation is that while people may for a while obey presidential exhortations to set thermostats at 65DEG, they will not cut back on energy use in the long run unless waste is made prohibitively expensive. Rule 2 is that energy companies will not invest the huge sums needed in costly domestic exploration for oil and gas unless they are assured of a profitable return. The best way to follow both rules would be to enact a relatively speedy dismantling of federal price controls and the awesome masses of red tape that have grown up around them. That would have to be accompanied by some measures to ease the blow to the poor--perhaps by a system of discount gasoline and heating stamps that would unfortunately entail the same red tape and possible abuses as food stamps.

Until Carter and Schlesinger settle on just what kind of decontrol they will recommend, no one can judge the program's adequacy. But the portents are not favorable. The idea of keeping a "cap" on prices is unwise. It would interfere with what should be a prime goal of decontrol: letting the market adjust prices so that a B.T.U.* would cost roughly the same whether it was produced by burning oil, gas, coal or whatever. Only in that way can the U.S. get the most efficient use of fuels.

By the same token, the prospective extension of price controls to intrastate gas is a bad mistake; it destroys that gas as a valuable yardstick of what the commodity really is worth in a free market. Since price is the quickest means for conservation, year-by-year increases in gasoline taxes could eventually curtail unnecessary driving and force more use of mass transit. Unfortunately, this is one of the proposals least likely to be in the final program.

2) The auto mileage rules already written into law are unrealistic. Increased auto efficiency is highly desirable. But, if the U.S. auto industry is forced to meet the 1985 standard of 27.5 m.p.g., it will be subjected to debilitating competition from foreign carmakers, who are far more experienced at making small autos, and threaten a loss of jobs. A better idea: to rely on stiff taxes on big cars. In Europe, that approach, plus high gasoline prices, prompts most buyers to choose gas-miserly small cars, while allowing manufacturers to turn out large, flashy autos for motorists who want and can afford them.

3) The program fails to take a position on congressional moves to dismember the big oil companies. Several bills have been introduced in Congress in the past few years either to split the oil giants into separate drilling, refining, transportation and marketing companies, or to force them to get out of other fields of energy such as coal and nuclear power, or both. Carter should pledge to veto any such move. At the very moment when incalculably huge sums are needed to develop new sources of energy, the oil companies alone in U.S. industry have the muscle--money, know-how and organization--to do the job. And their own survival is at stake: unless they expand into new sources of energy, they will die with the depletion of the world's oil and gas reserves. But as long as they face a serious threat of breakup, they will not make the investments required. In return for a pledge to stop dismemberment, Carter should extract a promise that the companies will devote a large share of the profits they would reap from price decontrol to exploration and development of solar, nuclear and synthetic fuels.

In addition, though Schlesinger warns against panaceas, the Administration seems to be regarding coal as one. Schlesinger's goal of almost doubling production by 1985 is admirable, but whether it is feasible is open to question. Crucial and complex problems must be solved first.

To begin with, the vast coal deposits that Schlesinger is talking about are not located in the already developed, deep mines of Pennsylvania and West Virginia. Instead, they are found in thick seams near the surface in Colorado, Montana and Wyoming, where they are most economically recoverable by landscape-scarring strip mining. Some of the coal lies beneath federal land that has been set aside for recreational purposes, and the Sierra Club and other conservationist groups have been making it difficult to open that acreage to coal mining. Other Western environmentalists also are appalled. "It's an effort to New Jerseyize the West," complains Carolyn Johnson, head of the Colorado Open Space Council mining workshop.

If those objections can be overcome, the nation's railroads will have to spend millions rebuilding deteriorated roadbeds to bear the added weight of the coal shipments. One widely touted solution is to use slurry pipelines, which would pump pulverized coal and water to users throughout the country. Fine, but who will supply the water? "This is an extremely arid region," says David Freudenthal, Wyoming's state planning coordinator. "It's not that we are opposed to pipelines, but we are opposed to shipping our water out of state."

For whatever reassurance it may be worth, a surprising number of energy experts questioned by TIME correspondents around the nation contend that it really is not necessary for Carter and Schlesinger to get every detail of the energy program right at the outset. The prime essential, in their view, is to convince the public and Congress that a real crisis exists, and that the Government is genuinely moving to meet it. Passage of even an inadequate energy program, they think, will be an indispensable plus; mistakes and errors can be corrected later, once momentum is established.

On that score, Jim Schlesinger is cautious. "This is a challenge to the American political system," he declares. "There's a question as to whether the system can support the energy plan. Can Congress, which represents diverse interests and parts of the country, come together?"

The worry is justified. As soon as the National Energy Plan, as it will be called, is tossed into the congressional crucible, it will be subjected to extreme heat from many sides. "I think there is going to be screaming for a time," says an insider. "It is definitely going to have teeth in it."

One of the strongest attacks on the bill will be waged by the forces seeking immediate and total deregulation of domestic petroleum and natural gas prices. Texas and Louisiana Democrats, as well as a number of laissez-faire Republicans, led by Representative Robert Krueger of Texas, will try to get the Government out of energy pricing altogether. They just might win. There is growing sentiment for a deregulation bill.

Two hard-driving House Democrats, Arizona's Morris Udall, Carter's old rival in the presidential primaries, and Ohio's John Seiberling, almost certainly will try to tack onto Carter's bills an amendment calling for the dismemberment of Big Oil.

Meanwhile, the special interest groups will be doing their own lobbying. Since Carter's main plank will be conservation, the utility industry should be fairly pleased. Industry leaders are even willing to handle the home-insulation program, but only on the condition that it is entirely voluntary. The National Coal Association, ironically, feels apprehensive about the program, though Schlesinger wants to boost its members' production and sales. Executives fear that Washington's enthusiasm for more coal usage will lead to shortages, followed by federal price controls. Environmentalists, among Washington's most vocal lobbyists, will be reminding Carter of his campaign statements that he would favor ecology over industrial growth if it came to an either/or choice.

Out of this welter of conflicting interests--industrial, regional, ideological--Jimmy Carter and Jim Schlesinger must seek to fashion a national consensus. The stage is set for a full-scale political drama, most likely a cliffhanger. As a leading character in that drama, Schlesinger, for all his unwillingness to suffer those he considers fools, should have a reassuring effect. As he puffs on his briar and voices dispassionate opinions about the looming crisis, he exudes the old-fashioned values of patriotism and self-reliance. The energy crisis is making that turn of mind much needed for Americans of today--and tomorrow.

* British thermal unit, a measure of energy based on the quantity of heat required to raise one pound of water one degree Fahrenheit.

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