The right strategy.

IN AN EARLIER time the Administration's plan to stimulate energy production would have been called an energy "policy." Today it's merely an energy "strategy." The rhetorical demotion reflects the consistent failure of government intervention in the energy marketplace.

The recent plunge in oil prices is perhaps the strongest indictment of centralized controls. After all, 4.5 million barrels per day of Iraqi and Kuwaiti crude have been forced off the market. A similar oil shock brought gas lines and shortages in 1974. But today's free-market environment has produced exactly the opposite-an oil glut and gasoline prices that are lower today than when Iraq invaded Kuwait. When oil prices skyrocketed in August, 250 million clever Americans decided to drive a little less, many commercial vehicle fleets were retrofitted to run on alternative fuels, and homeowners doubled the rate at which they converted from oil to gas heat. All this without the benefit of an energy "policy."

By easing up on environmental, tax, and regulatory restrictions the Bush plan builds on Ronald Reagan's legacy. President Bush could have gone further and abolished the Strategic Petroleum Reserve, the International Energy Agency, and the Natural Gas Act, each one a vestige of a now discredited form of economic organization. To his credit Mr. Bush rejected mandatory mileage standards for automobiles, the current rage among environmental and conservation groups. Nuclear power would get a long overdue boost, pleasing those concerned with our dependence on foreign oil.

Price controls even the authority to reimpose them in an "emergency' are universally opposed. Higher market prices are universally viewed as the most efficient program for conservation and increased domestic production. Energy malaise has given way to a realistic appreciation of what an unfettered market can do.

In short, we've come a long way since Jimmy Carter gave that speech with his sweater on.