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US: Energy Independence: The Ever-Receding Mirage

President Bush and his Democratic opponent John Kerry are both for "energy independence"—like every other president for a generation. That elusive, but ultimately pointless, quest has been a central feature in American politics and policy for the past 30 years, ever since the October 1973 embargo on oil exports to the United States launched by Saudi Arabia, Algeria, Bahrain, Abu Dhabi, and Libya.

By January 1974, oil prices had risen from $3 to $11 per barrel. In response to the embargo, President Richard Nixon did lots of counterproductive things, including imposing oil price controls and lowering highway speed limits. Nixon also launched Project Independence, declaring, "Let this be our national goal: At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving." (Automobile aside: Even before the oil embargo, in 1970, Nixon proclaimed in an environmental message to Congress: "I am inaugurating a program to marshal both government and private research with the goal of producing an unconventionally powered virtually pollution free automobile within five years.")

President Gerald Ford moved the date for achieving American energy independence back to 1985. (Auto Aside: Ford signed the 1975 Energy Policy and Conservation Act, which set federal standards for energy efficiency in new cars for the first time.)

President Jimmy Carter made energy policy the centerpiece of his administration. He notoriously declared on April 18, 1977, that achieving energy independence was the "moral equivalent of war." In August of that year, Carter signed the law creating the United States Department of Energy, intended to manage America's energy crisis.

In late 1978, the beginning of the Iranian revolution caused a shortfall in oil exports, and prices doubled over the next couple of years. Carter, wearing a sweater on national television, urged Americans to turn down their thermostats. "Beginning this moment, this nation will never use more foreign oil than we did in 1977—never," Carter declared in his nationally televised speech on July 15, 1979.

He proposed a sweeping $142 billion energy plan which would achieve energy independence by 1990. Part of his plan included the "creation of this nation's first solar bank, which will help us achieve the crucial goal of 20 percent of our energy coming from solar power by the year 2000." Carter imposed an import quota of 8.5 million barrels of oil per day and created the $20 billion Synfuels program, which was supposed to produce 2.5 million barrels of synthetic fuels per day by 1990. To his credit, Carter did begin to dismantle Nixon's crude oil price controls. (Auto aside: In his 1979 speech Carter warned: Citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury.)

In 1991, in the prelude to the First Gulf War, President George H.W. Bush announced a hodgepodge of proposals as a national energy strategy. Naturally one of his strategy's guiding principles was "reducing our dependence on foreign oil." (Auto aside: President Bush, meeting with representatives of the "Big Three" automakers, announced a jointly funded U.S. Advanced Battery Consortium—a $260 million research project to develop lightweight battery system for electric vehicles.)

In 1992, President Bill Clinton proposed a BTU tax on fossil fuels to raise money to reduce the deficit. Clinton's tax proposal would have put a levy on natural gas, coal, and nuclear power of 25.7 cents per million British thermal units. Crude oil would have been taxed at 59.9 cents per million BTU to discourage dependence on foreign oil. The crude oil BTU tax would have raised the price of a barrel of oil by about $3.50, and would have cost the average family between $200 to $400 annually. In 1996, Clinton proposed a comprehensive energy plan that was completely ignored by the Republican-controlled Congress. (Auto aside: In 1993, Clinton launched the $1 billion Partnership for New Generation Vehicles with the Big Three automakers, aiming to produce a prototype car that was three times more fuel efficient than conventional vehicles by 2004.)

California experienced a series of rolling blackouts in the first months of George W. Bush's administration. A national energy task force led by Vice President Dick Cheney notoriously devised a national energy policy, released in May 2001. The task force described America's energy situation in stark terms: "America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s. . . . A fundamental imbalance between supply and demand defines our nation's energy crisis."

"What people need to hear loud and clear is that we're running out of energy in America," said Bush in May 2001. "We can do a better job in conservation, but we darn sure have to do a better job of finding more supply." He added, "We can't conserve our way to energy independence."

Nevertheless, George W. Bush repeated recent presidential history by insisting, in his 2003 State of the Union address, that one of his administration's goals was "to promote energy independence for our country." (Auto aside: In that speech, Bush announced his $1.2 billion FreedomCar proposal to develop hydrogen fueled vehicles.)

John Kerry, the presumed Democratic presidential candidate, says he too has a plan for energy independence. "It's time to make energy independence a national priority—and to put in place a plan that frees our nation from the grip of Mideast oil in the next ten years," he intones in a campaign ad.

Among other things, Kerry would retool Gerry Ford's automotive fuel economy standards by raising them to as high as 36 miles per gallon. He would also require that 20 percent of electricity generation come from renewable energy sources by 2020—reminiscent of Carter's bold 1980 plan to supply 20 percent of America's energy by 2000 using solar energy. (Kerry's plan would also doubtless utterly fail to meet its goal, as with Carter's plan and all the other bits of energy planning political hubris mentioned in this article.)

So, is there any real difference between Bush and Kerry on energy policy? Not really. "Both believe that at the end of the policy rainbow is energy independence, and they are willing to move heaven and earth to get there. Both are convinced we need government intervention in energy markets," said Jerry Taylor, the Cato Institute's director of natural resource studies, in the Washington Post. "The difference is emphasis, not policy."

Bush and Kerry should take a lesson from the one president who refused to meddle extensively in energy markets—Ronald Reagan. In January 1981, on the day he became president, Reagan ended the remaining federal regulations on domestic oil supplies and prices, allowing oil prices for the first time since 1971 to fall and rise with world market levels. In December 1985, Reagan signed legislation dismantling the U.S. Synthetic Fuels Corp. What happened when all these government attempts to manage our energy supply were cruelly killed? Oil prices dropped from their peak of $37 per barrel in 1981 to less than $14 per barrel in 1986.

Reagan understood that for most Americans lower gasoline prices and lower home electric bills are all the energy independence they want or need.

Ronald Bailey is Reason's science correspondent. His new book, Liberation Biology: A Moral and Scientific Defense of the Biotech Revolution
will be published in early 2005.

Editorial Notes: An interesting article until the unconvincing conclusion. Bailey leaves us to figure out what he thinks about war in Iraq as it pertains to the US energy policy and market intervention, or how he feels about the experiences with deregulated energy markets in California.

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