Defense to Remain Focus at Energy Dept. : Choice of Watkins Points Up Shift From Civilian to Military Tasks

Even if there were no crisis at the nation’s nuclear weapons factories, the choice of Navy Adm. James D. Watkins--a military man with nuclear experience--to head the Energy Department squares with the transformation of the agency under President Reagan into a mostly military one.

Created as a cabinet agency by President Jimmy Carter in 1977, the department had among its bureaucratic predecessors the Atomic Energy Commission. As such, it became responsible for the design, testing and production of nuclear weapons.

But part of the impetus for a cabinet-level Energy Department was the Arab oil embargo of 1973, and the new agency became home to myriad civilian energy programs aimed at fostering conservation and production to limit the nation’s vulnerability to further oil shocks.

Such projects--including the Strategic Petroleum Reserve, now a 550-million-barrel federal oil stockpile, and the ill-fated Synthetic Fuels Corp., intended to develop an alternative fuels industry--quickly came to dominate the fledgling agency. Measured in real 1982 dollars, defense-related spending accounted for just a fourth of a $14-billion Energy Department budget in 1980.

When the cost-conscious Reagan moved to Washington, he pledged to abolish the agency. But then came “Star Wars.”

Spurred by spending on the Strategic Defense Initiative, a surge in defense outlays at the department more than offset steep cutbacks in civilian programs.

Thus, the department once slated for extinction weathered the Reagan cost-cutting onslaught better than many agencies.

The Congressional Research Service found that defense spending at the Energy Department leaped by an inflation-adjusted 81% between 1979 and 1987, while spending on all other energy programs plummeted 60%.

Even commercial programs for nuclear power suffered, a General Accounting Office study said. The 1987 budget, for example, shifted programs in advanced nuclear reactors for commercial use “to meeting the space and terrestrial power needs for the military.”

Meanwhile, the decline in world oil prices that began about the time Reagan entered the White House, combined with rising domestic oil production, diminished the urgency with which many of the Energy Department’s civilian projects had been implemented.

High Risk, Big Payoff

Programs to foster solar, wind and other so-called renewable forms of energy were abolished, while tax incentives and other measures to encourage energy conservation were dismantled. Even mainstream research and development into such fields as the enhanced recovery of oil from old fields was cut sharply.

The non-military spending that survived was redirected toward what the government called long-term, high-risk, high-payoff research into such areas as nuclear fusion and superconductivity. An exception was increased spending on technology to burn coal more cleanly.

Today, about 60% of the Energy Department’s spending goes toward defense-related projects, including the plants around the nation that produce tritium, plutonium and other components of nuclear weapons.

Massive safety problems uncovered at these plants and related facilities stand to occupy much of the Energy Department’s time and money for years. If only for that reason, the military dominance of the agency is liable to grow under the incoming Bush Administration, not decline.

“If it hadn’t been for this horrendous cleanup we’re facing, I would have said that Bush would have started swinging the civilian-defense split back toward 50-50,” said one manager in the Energy Department. “But between the budget deficit and the weapons problem, I don’t see how that is possible.”

Broad Military Focus

A Senate committee has estimated that the cleanup of some 155 contamination problems at government weapons facilities could cost $5 billion a year for three decades. That alone would swallow up nearly half of the current Energy budget. A Reagan Administration report acknowledged Thursday that four plants probably will have to be closed permanently and the rest will require at least $81 billion in repairs and cleanup.

Philip K. Verleger Jr., energy economist at the Institute for International Economics in Washington and a Carter Administration economist, argued that the military focus at the agency extends beyond funding and affects the way the department thinks about other energy issues.

He cites as an example the department’s emergency planning office, supervised by an ex-military officer, for focusing on such issues as terrorism at the expense of more mundane needs, including the improved flow of information about oil movements around the world.

But Verleger, echoing frequent criticisms of some of the early civilian energy programs, said the evolving defense dominance of the Energy Department budget isn’t bad in itself.

“To say that going to two-thirds defense spending is a mistake implies that a lot of those energy expenditures that have been cut were well justified in the first place,” he said. “They were not.”

Main story, Part I, Page 1