Address to the Washington Press Club in Washington, DC
A year and a half after the humiliating Arab oil embargo, with its devastating and continuing consequences for our economy, we still have the same national energy policy, developed and maintained by the oil and electric power companies: "Use more and more energy and pay higher and higher prices for it."
Misleading Presidential statements about "Project Independence" merely lulled our people into a false sense of continued trust in inept and timid leaders—while our dependence on foreign oil lunged upward. Our foreign oil bill is now a staggering $25 billion per year, compared to one-tenth of this amount in 1970. We may have to import 60 percent of our petroleum needs by 1985, compared to about 40 percent now and only 25 percent in 1973.
We have bowed quietly and subserviently to the Arab nations who tried to blackmail our great country just a few months ago. Apparently we are now prepared to continue this obeisance as a permanent and increasingly mandatory national posture.
The political leadership of this country has failed to fulfill its responsibilities to the American people. The U.S. Congress has been unable to arouse itself from lethargy and devise a meaningful alternative to President Ford's disastrous energy proposal. The administration's energy policy is easy to describe—a large and sudden increase in the price of oil.
If the Gerald Ford/oil industry policy is implemented: it will add from 3 percent to 4 percent to the nation's inflation rate; it will cost us consumers more than $30 billion annually, draining this purchasing power away from other parts of the floundering economy and increasing already disgraceful levels of unemployment; it will encourage additional OPEC oil price hikes; it will aggravate fuel distribution inequities and further damage New England and other areas which are especially dependent on declining oil sources; it will not result in decreased consumption equivalent to price increases because of inelastic demand for certain petroleum products; it will punish those with low and middle incomes, while the rich continue to waste all the fuel they want; it will continue a callous disregard for environmental quality.
In short, the Ford/oil industry energy policy is merely another example of letting the average American pay for the politicians' mistakes.
Our nation must act! Neither the world economy nor the American economy can withstand a continuation of present circumstances and trends.
In effect, the OPEC cartel has levied a $60 billion annual excise tax on the rest of the world, an amount more than equal to the stock value of all international oil companies in the world. By 1980, the liquid capital of oil exporting nations will comprise more than half the world's monetary reserves, creating the potential for devastating world economic damage or threats of damage.
The economies of weak developing countries with no major exportable products are being destroyed, and all major oil importing nations are in effect operating on credit to the oil producing countries. The lives of developed nations depend on adequate energy supplies, and any drastic reduction in fuel consumption could not be tolerated.
The private oil industry, primarily U.S. companies, has lost control of its former supplies and transmission systems in the Persian Gulf area. The OPEC nations now unilaterally set prices and export quotas and determine the identity of customers.
So long as the oil cartel remains intact, there is little likelihood of any voluntary price reduction for petroleum. These countries recognize their present strategic advantages and have no intention of relinquishing them.
The oil exporting countries do have a major investment in the soundness of the worldwide economic system. They also see more clearly the importance of close ties to the free nations of the world.
Recognizing these facts, it is imperative that we move boldly toward a goal of reasonable national energy self-sufficiency.
"Project Independence" is a farce.
No substantive steps have been taken to assure that we will be independent of doubtful foreign oil supplies any time in the foreseeable future.
We have no long-range national energy policy.
We are forming no binding alliances with other consuming nations to coordinate research and development efforts or to share future oil shortages.
Our foreign policy toward the OPEC countries is not designed to force reasonable price reductions.
We have begun no new concerted effort to develop additional types of energy supplies.
There is no major energy conservation program in this country.
No substantial increase in stockpiling facilities is under way.
One of the greatest failures of national leadership in recent history is the failure to convince the American people of the urgency of our energy problems. Americans are willing to make sacrifices if they understand the reason for them and if they believe the sacrifices are fairly distributed. Right now, they think the working people are making the sacrifices while the big shots get richer. They are right.
Imports of oil from foreign countries should be kept at manageable levels. Increasing amounts of oil from remaining domestic and foreign sources should then be channeled into permanent storage facilities until we have accumulated at least an additional 30-day reserve supply.
If it becomes necessary, petroleum supplies available for consumption should be allocated by the federal energy agency to the individual states, using the basic formula developed through experience during the winter of the oil embargo. The 50 state energy offices have been preparing for the past year and a half to distribute oil locally to meet greatest needs.
If patriotic appeals and strict conservation measures prove to be inadequate to control consumption, standby excise taxes should be available to the President for selective imposition on petroleum products.
The price of all domestic oil should be kept below that of OPEC oil.
We should place the importation of oil under government authority to allow strict control of purchases and the auctioning of purchase orders.
To insure maximum protection for our consumers during the coming years of increasing energy shortages, antitrust laws must be rigidly enforced. Maximum disclosure of data on reserve supplies and production must be required.
Utility rates are up more than 40 percent in 2 years, while electric powerplants operate at about 35 percent efficiency. Electric power companies demand that their present customers finance huge construction projects while less than half of their present capacity is utilized. Some of their projections for annual power consumption increases are double even those of the federal energy agency administrator!
Unnecessary electrical powerplant construction should be stopped.
Advertising at consumers' expense to encourage increased consumption of electricity should be prohibited.
Rate structures which discourage total consumption and peak power demand should be established.
Additional major reductions in oil and natural gas consumption must be planned. Recently, government geologists slashed estimates of our offshore oil reserves by 80 percent and cut total national reserve estimates by 50 percent! We have at most a 35 year supply of oil in the world at present rates of consumption.
In a few years, oil and gas will be too valuable to be used for heating buildings or for generating electricity. Almost all of our dwindling supplies will be required for the production of fertilizer and petrochemicals and for transportation.
We must act now to reduce the enormous waste of these valuable products by legal mandate, patriotic appeals, and improved technology. If we do not, the inevitable pressures of rising prices and dwindling supplies will continue to disrupt our economy and punish those who can least afford it.
The potential for dramatic energy conservation remains untapped. Our energy waste in transportation is 85 percent, in generating electricity 65 percent. Overall, 50 percent of our energy is wasted.
When we had to cut our own wood to bum on the farm, we did not waste it.
We need: mandated motor vehicle efficiency standards; rigid enforcement of speed laws; efficiency standards and labeling for electrical appliances; mandatory improvements in building insulation; regulatory agency decisions that reduce fuel consumption; and similar conservation measures.
The federal government with all its agencies should set a national example in the conservation and proper use of energy.
In spite of growing dependence on other sources of power, fossil fuels will still be our main source of energy in the year 2000 A.D., with fusion power still in the developmental stage.
A major immediate need is to derive maximum energy from coal, while preserving environmental quality. We have at least a 200-year supply of clean and accessible coal. Power companies and industries must shift to this source of energy, and we must invest in improved mining efficiency, cleaner combustion technology, and a better transportation system for moving coal to its end users.
Substantial increases in coal production and utilization will only come with a stable regulatory climate. The recent veto of the strip mining bill merely prolonged the present climate of uncertainty.
We must also exploit the potential of solar energy in the construction of new homes and offices.
During the past few years, two-thirds of all federal research and development funds went for atomic power, primarily for the liquid metal fast breeder reactor (LMFBR). Since this potential source of energy will not be economically feasible until the price of natural uranium increases several times over, since England, France and the U.S.S.R. have design experience with the LMFBR, and because of the mounting costs and environmental problems, our excessive emphasis on this project should be severely reduced and converted to a long-term, possibly multinational effort.
Our atomic plants use light water with enriched uranium. Some countries, such as Canada, use heavy water with more plentiful natural uranium. Our government's fuel enrichment plants can produce adequate enriched uranium for the next decade. A shift away from sustained production of atomic weapons or toward heavy water reactors can extend this time of adequate supply.
The private commercial production of enriched nuclear fuel should be approached with extreme caution.
In addition to the physical damage and human suffering which would result from a nuclear disaster, the economic, psychological and political consequences to our energy supply system would be more devastating than a total Middle East oil embargo. It is imperative that such an accident be prevented. We must maintain the strictest possible safety standards for our atomic power plants, and be completely honest with our people concerning any problems or dangers.
For instance, nuclear reactors should be located below ground level. The power plants should be housed in sealed buildings within which permanent heavy vacuums are maintained. Plants should be located in sparsely populated areas and only after consultation with state and local officials. Designs should be standardized. And a full-time federal employee, with full authority to shut down the plant in case of any operational abnormality, should always be present in control rooms.
An international conference on energy research and development would benefit all nations. It is ridiculous for each of us to go our own separate way and replicate research projects which are being completed in other nations. There is certainly enough challenge and responsibility to go around in energy fields involving: thermonuclear reaction containment; liquefaction and gassification of coal; use of solid wastes; breeder reactors; electric propulsion and rail development; building insulation and design; heating, cooling and electrical power generation from solar energy; electric power transmission; industrial plant efficiency; automobile engine design; coal mining techniques; efficiency of petroleum extraction from the ground; materials recycling; long-range benefit:cost ratio for energy sources; and nuclear waste disposal. Of course, private industry will be expected to continue research in many of these and other fields of interest, often in cooperation with government.
It is unlikely that we will be totally "independent" of oil imports during this century. Our present trend is still toward increasing dependence on oil supplies from overseas.
Although our country is still the world's largest producer of oil, domestic production is decreasing inexorably by about 6 percent annually—despite a substantial increase in exploration efforts.
It is certainly not possible or necessary for us to be energy independent by 1985, but we should be free from possible blackmail or economic disaster which might be caused by another boycott. Our reserves should be developed, imports reduced to manageable levels, standby rationing procedures evolved and authorized, and aggressive economic reprisals should await any boycotting oil supplier.
With proper national planning and determined execution of those plans, energy conservation can be completely compatible with environmental quality and with economic well-being. Lower energy consumption inherently reduces world pollution levels. The elimination of waste and technological advances into new energy fields can result in enhanced employment opportunities without any reduction in the quality of our economic lives.
Unless we conserve energy drastically, make a major shift to coal, and substantially increase our use of solar energy, we will have no alternative to greatly increased dependence on nuclear power. As one who is intimately familiar with the problems and potential of nuclear energy, I believe we must make every effort to keep that dependence to a minimum.
We need strong leadership, and we need it now!
Jimmy Carter, Address to the Washington Press Club in Washington, DC Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/347675