REAGAN.

President Reagan's environmental policies have moved in a cloud of smoke, sparks, and fury. They have produced special congressional investigations, cheering by many industries, and hundreds of lawsuits by environmentalists. At one point, some House aides were wildly suggesting that Anne Burford, chief of the Environmental Protection Agency (EPA), be arrested and held in the Capitol.

All this fuss stemmed from the fact that the Reagan administration took office determined to make fundamental changes in the nation's environmental actions.

Reagan officials felt environmentalism had gone too far - that many cleanup requirements were stricter than necessary to protect public health, especially when viewed in light of the high costs they imposed on industry. The mission of the Reagan White House, its environmental appointees said, was to restore ''balance'' and ''common sense'' to the Interior Department and the EPA.

The architect of this policy was James Watt. Surely the most memorable interior chief of modern times, Mr. Watt combined the tact of a drill sergeant wth the management skills of a corporate president.

Watt proposed to quintuple the area of the United States continental shelf offered for offshore oil and gas development. Congress riddled the plan with exemptions for many specific areas.

Watt tried to forge ahead with an ambitious program of leasing public land for coal mining, but low demand for the land conspired against him, and Congress eventually voted a temporary hold on coal leasing.

Mr. Reagan's first interior secretary also attempted to stop buying new parkland and focus available funds on badly needed maintenance in existing parks. Congress cut the parklands acquisition budget by two-thirds, but did not eliminate it.

Watt's talent for boorish phrases finally resulted in his downfall. His replacement, Judge William Clark, has been far more circumspect. Mr. Clark has scaled back department plans for offshore-oil leasing and for the moment has halted coal leasing. He has stopped trying to eliminate the park-buying budget.

Anne Burford, President Reagan's first EPA administrator, was a Watt protege. Although Mrs. Burford and the Reagan White House achieved little change in environmental laws, their administrative actions greatly altered the agency. EPA's enforcement arm was abolished, its lawyers scattered throughout the agency. Its budget was sharply cut; in the last three years, funds for the agency's four major operating programs have been pared 44 percent.

House Democrats charged that Burford manipulated the Superfund, EPA's program for cleaning up hazardous waste dumps, for political gain. She departed amid a power struggle between the executive and legislative branches and was replaced by the respected William Ruckelshaus, who had served as the agency's first administrator.

Mr. Ruckelshaus has stumped for an increased EPA budget. He has increased enforcement efforts and favors reauthorization and more money for Superfund, although he won't say how much. He has pushed through a decision banning lead in gasoline and added new toxic dumps to the Superfund list.

The Reagan administration, however, says more research is needed before EPA embarks on a program to deal with acid rain.