My fellow Americans:
With summer coming, a lot of Americans will be driving more than ever, going on "See America First" vacations and driving everywhere from New Jersey to California in everything from vans to buses to motorbikes. This is a good time for it because gas prices continue to fall. In fact, they are falling as never before. The oil price decline of the 1980's has been a triumph not of government, but of the free market; and not of political leaders, but of freedom itself.
When I first came into office in January of 1981, the price of gas was just about $1.25 a gallon. The price of a barrel of oil had reached $36. Americans were understandably frustrated and angry as they cast about for answers. Some people advocated more governmental intervention. Demands for divestitures of oil companies filled the air. Other people demanded gas rationing. Well, we said no. I didn't want to force more limits on people through rationing. I wanted to ease the situation by letting freedom solve the problem through the magic of the marketplace.
One week after I took office, we decontrolled the price of domestic oil, and we stopped the Government from putting ceilings on its pricing and production. Our action wasn't exactly greeted by rave reviews. Those opposed said decontrol would drive up the price of oil, increase gas prices, and cause terrible inflation. One Member of Congress, a Democrat from Massachusetts, said decontrol would impose impossible economic burdens on those least able to pay. Well, 5 years later, Massachusetts is enjoying an unprecedented economic comeback; and the reason is lower taxes—something else we contributed to—and the lowered energy prices that followed the decontrol of domestic oil.
Despite all the scare tactics and dire warnings, decontrol was a success. The price of oil has fallen from the $36 a barrel of 1981 to about $12 a barrel today. The price of gas has also plummeted from an average of $1.25 a gallon when I took office to about 82 cents today. In fact, the price of gas is now cheaper in real terms, meaning accounting for inflation, than it's been at any point since the 1950's. My mother used to tell me, "It's not nice to crow," but maybe this once I can't help it. We've also been able to close down the costly Synfuels Corporation, a quasi-governmental agency that ate up billions of taxpayer dollars while it didn't solve the energy crisis. Government didn't perform any of these miracles; freedom did, the marketplace did, the entrepreneurs and businessmen and women of America did. Those of us back in Washington just sort of lifted the artificial restraints, sat back, and watched the gushers blow.
But the oil harvest of the eighties is not just an economic story; it also has implications for our national security. When I came into office the United States was consuming about 17 million barrels of oil a day—6 million imported. A big part of that oil came from the Middle East. Today we consume less than 16 million barrels of oil a day, and only 4 million are imported. But what may prove to be even more significant is that we've changed who we buy our imported oil from. Back in 1981 most of it came from the OPEC countries, but now most of it comes from Canada, Mexico, the Caribbean, and Great Britain. As Vice President Bush pointed out recently, we've assured that our supplies won't be as vulnerable to international politics as they've been in the past. We need a strong U.S. energy industry to keep it that way.
I wish the entire energy picture were nothing but good news, but that, unfortunately, isn't so. While the energy-dependent States of the Nation are enjoying increased economic well-being, the economies of our oil States have cooled. Producers, large and small, have suffered a dramatic loss of income. Many small companies face bankruptcy. While our belief in the free market remains firm, that belief is not inconsistent with the sense of compassion and concern for the individuals who bear its economic consequences.
But the answer to these problems is not an import fee on imported oil. That would be a step backward. What we have to do now is go forward with actions that will further improve our energy production, freeing up all remaining energy prices. That means doing to domestic gas what we did to domestic oil—decontrolling it. Last week Energy Secretary John Herrington sent to Congress a bill to lift all remaining controls on natural gas prices. The result will once again be a boom for consumers, with the average residential customer saving up to $45 on his or her gas bill on the first full year of decontrol alone. I think it's time we seized the moment and decided to finish the work we began in 1981. It's time to go for lower prices, go for more freedom, and go for the growth that will follow. We'll be going for it in the Congress soon, and we hope to win as we did in '81—with your support.
Until next week, thanks for listening, and God bless you.