Carter launched a campaign to dramatically cut oil imports, develop domestic alternative fuels, expand solar power and initiate an aggressive energy conservation program. He also called for greater development of U.S. oil resources.

Does that sound familiar? Has anything changed? Are the Obama administration and Congress on the right track to solving these energy problems, or are we destined to continue to relive them?

The biggest stumbling block for our oil addiction has been in transportation. Miles per gallon dropped after the oil shocks of 1973 and 1979, with lags. However, as the price of oil dropped in the mid-1980s we went right back to our old ways, and even entered the age of the SUV, which ended up being part of the bankrupting of GM and others. It is human nature to respond to short term stimuli and to pretty much ignore the long term effects of personal and national behaviors.

Still well over 98% of our road transport is fueled by refined oil products. The small number of “hybrids” on the road has made just a tiny ding in the problem. Ethanol from corn has proven to be energetically and economically a very bad choice, yet we continue to follow this due to the inertia of politics and the ignorance of the public on the basics.

More suppliers of oil came on line after the oil shocks of 1973 and 1979, but many of them have either peaked or are hurtling toward peaking in their oil production.

Norway has peaked. The UK has peaked. West African countries are approaching peak quickly. Mexico has peaked, but there are other taxation and policies reasons that have harmed that industry as well. The US peaked in the early 1970s. Indonesia is now a net oil importer, as are former net oil exporters Egypt and the UK, for examples. We are far closer to peak oil now than the time of Jimmy Carter, but we remain pretty much still asleep at the wheel.

The USSR fell in the late 1980s and early 1990s. With that the oil reserves of Russia, the Caspian and Central Asia became more open to international markets and international investment to some extent, but overall this has proven to be less than expected in many ways. Russia showed signs of opening up to foreign investment and becoming a reasonable player on world markets, but then returned to oil nationalism and natural gas nationalism. This is more of a threat to the EU than to the US, but, again, oil markets are world markets, and natural gas markets are becoming more internationally interlinked by the day. Indeed, the world has changed massively since the time of President Carter.

The Soviets neglected the development of oil and gas in Central Asia. Now international oil companies and the governments of Central Asia are moving toward developing the fields and infrastructure, but be warned, insecurities await.

India and China were hardly blips on the energy screen during the time of Jimmy Carter. Now China is the fastest growing consumer of oil in the world, and India is a country that has the potential of even surpassing China in growth in the next 40 years of so, if some things fit into place. There is more competition for oil, gas, coal, and more than in the time of Carter. It is no longer just the EU, US, and Japan as the big consumers.

We also have the growth of heavy and super heavy oils out of Venezuela and Canada (the tar sands). We have slow developments in coal-to liquids and gas-to-liquids technology. We have new finds in heavy oils in Madagascar, the Persian Gulf, West Africa and elsewhere. But heavy oils and oil sands need multiple refining, and are environmentally even more unsound than oil or some types of coal.

The US and the world are far more in tune with the environmental issues that face us, including global climate change. This could be one of the biggest driving forces for energy systems changes in the future. The drive for “clean energy” that we see in the US is mostly ad hoc, and somewhat ingenuous on the part of some politicians. Most of the policies in the US that connect energy to the environmental issues are ad hoc, watered-down simplifications of very complex issues that are buried in massive bills that weaken what could be done, but are, to be fair, the only sort of expected small steps one could expect given the heated and anti-intellectual political environment we face.

I commend the few brave politicians, who have pushed for positive steps forward, but they are much smaller steps than what are really needed – and many of them know that. Politics is about trade-offs and concessions. Future energy and environmental security is about science, realities, and the near existential threats that could come to this country and many others. The tendency to look toward short run solutions to long run issues does not help. The tendency to look to domestic solutions to global problems does not help.

Are our energy insecurities requiring the moral equivalent of war? Actually they require the moral equivalent of broad thinking and creative thinking much like what was done to help resolve some of the health and medical problems we have faced, such as polio, malaria, leprosy and others. The war analogy does not help, but it sells well to the lowest common denominator in the public, and to those looking at our energy and environment problems as something that should be attacked in the short run, rather than more intelligently and wisely controlled and mitigated in the long run and with long run sustainable solutions.

Furthermore, finding solutions to the environment and energy situation we face could reduce the tensions that could bring us to future wars. But again be warned: the new “clean energy technologies” that so many have been touting have their own geopolitical risks that could emanate from the sources of silicon (for example, Kazakhstan), and rare earths (for example, China), and titanium, platinum and other strategic materials for which the US has considerable import vulnerabilities. We should not trade off one import insecurity for another. We should not go blindly into the new energy future without looking at the really big pictures.

Depending on oil in the future means we still will face full on, and without mitigation, the fact that 75% of oil known conventional oil reserves are to be found in the Persian Gulf. That dependency will increase over time as other places peak and dry out. The time to act is now—not in 5 or ten years.

We need to look at things in systematic, international, and wise manners. We need to consider not just one energy system but many, including those that connect to each other, such as natural gas and electricity. We also need to look at how energy systems are connected to other systems, such as water, food, health, education, and more.

We have better chances now to make real positive changes. Let’s not let them fall into the dust bin of history like so many good ideas have in the past. Let’s get beyond our short-term, localized visions and bring in the best and the brightest from many fields and get moving on mitigation, management and more to help solves our energy and related threats before, frankly, it is too late.

The energy policies of the Carter years would be as unsuccessful if not more so today as they were in the 1970s. As U.S. population increases we need sufficient, reasonably priced energy supplies to facilitate economic growth and recovery from the recession. Energy use and economic growth go hand in hand; each 1 percent increase in U.S. GDP is accompanied by a 0.3 increase in energy use. The U.S. Department of Energy projects that the U.S. will need approximately 13 percent more energy by 2030 to accommodate our growing population, higher levels of employment, and economic activity.

U.S. energy needs simply cannot be met thorough alternative or renewable energy sources alone. Renewable energy tends to be more expensive than conventional energy and substituting more expensive energy for cheaper energy will further slow economic recovery. Renewables should certainly be actively pursued as an additional energy source but they already receive the lion's share of Federal budget energy expenditures.   Allowing increased access to both off-shore and on-shore areas for drilling and exploration would have a positive impact on U.S. domestic energy supplies.

Unfortunately, the cap and trade proposal under the Waxman-Markey bill will effectively choke off most efforts to increase domestic oil production and more imported supply of transportation fuels will be needed to meet current and future rising energy demand..

Hopefully, congress won’t revisit “price gouging” legislation this session to deal with the fluctuating gas prices. The price control efforts under the Carter administration remain among the biggest mistakes ever made in energy policy. An American Council for Capital Formation (ACCF) economic study on price gouging proposals reviewed investigations of past gasoline price increases, determining previous track records of efforts to control prices and how laws that penalize supply-based prices during interruptions would affect the size and duration of the shortages, and the resulting costs. In every case, the price increases were due to the operation of supply and demand and not from withholding supplies. 

History can serve as a valuable lesson when it comes to energy policy. Hopefully, we won’t repeat the same mistakes of the past.

The domestic steel industry, which has already reduced energy use per ton of steel shipped by 33 percent since 1990, supports both short- and long-term research and development, funded jointly by government and industry, and favorable tax incentives and financial policies that encourage the development of new and transformational energy alternatives, including clean coal and sequestration technologies. Stimulating the development and deployment of new energy technologies is the most effective and economically feasible approach to rapid and sustained GHG emissions reductions. 

Since President Carter addressed the nation about America’s energy crisis back in the 1970s, the United States has made limited progress on the issue.  Of significant concern is the fact that we still do not have a clearly defined national energy policy. In fact, America’s domestic energy security remains a critical issue facing the nation today.

At the foundation of our energy security is a reliable, abundant, affordable and sustainable – and increasingly ‘green’ – energy supply. A truly sustainable national energy policy must embrace: clean coal technologies – to take advantage of our most abundant resource in a sustainable manner; nuclear power; carbon sequestration technologies; off-shore oil and gas exploration; wind and other renewables; and bio-gas technologies.
 

Nuclear power, wind power, off-shore exploration and bio-gas are technologies that are readily available today. Clean coal and sequestration technologies require further research and development to be put into use on a commercial scale. A comprehensive U.S. energy policy that pursues both paths with urgency and in parallel will create the secure and sustainable energy supply that U.S. manufacturers and consumers are in need of in today’s world.

Are we in the same place we were thirty years ago when President Carter drew the unfortunate analogy?  No, in some respects we're worse off than we were then.  For instance, we consume more oil than we did then, and more of what we consume is imported; this means that carbon dioxide emissions from petroleum consumption are significantly greater than they were then and it means that we are more vulnerable to oil supply disruptions resulting from political instability.  This also exacerbates our trade deficit and puts downward pressure on the dollar and upward pressure on interest rates, or could.

On the other hand, energy now represents a much smaller share of GDP than in the past ,which means that the impact of a disruption would be less serious than those of the 1970s.  Even with gasoline prices at $4/gallon, no one waited in line to buy it, remember.  The other bit of good news is that we appear at least to be more serious about reducing petroleum consumption than in the past.  The proposed new CAFE standards, while an imperfect mechanism to reduce petroleum consumption, will; have some effect in the future.  More importantly, the carbon dioxide cap-and-trade bill passed by the House would, if passed by the Senate and signed by the president, eventually increase the price of all fossil fuels, including gasoline.  This would spur both conservation and also the development of alternate motor vehicle fuels, including electricity, biofuels and hydrogen.  All these would have the effect of reducing petroleum consumption, and they are closer at hand than they have been in this analyst's lifetime. 

We're not in the same place we were 30 years ago,  but we're not where we need to be, either.

The central energy policy challenge then was oil imports, given the price shocks of 1973-74 and 1979, which were related to political developments in the Middle East. Not only President Carter, but also Presidents Nixon and Ford, struggled to develop a policy response to reduce oil imports, increase domestic oil production, and adopt substitute fuels. The policy response relied principally on a heavy dose of command and control, reflected in the laws and policies established between 1974 and 1979.

These policies were mostly failures.  The Fuel Use Act of 1978 barred the use of natural gas for electricity generation based on a conviction that the United States was running low on supplies. Of course, that belief was false, discounting the promise of technology development and the power of competitive markets. Another embarrassment was the Synthetic Fuels Corporation, a multi-billion dollar project to develop synthetic transportation motor fuels that the federal government eventually sold as quietly as possible for a dollar. 

Some of the 1970s energy policies worked at cross purposes, reflecting a lack of coherence in policy direction. For example, the Fuel Use Act reflected a view that the U.S. was running out of natural gas, while partial gas decontrol in the Natural Gas Policy Act of 1978 was intended in part to promote increased domestic natural gas production.  

In the end, these policies were not very successful. U.S. oil imports rose steadily in the wake of adopting the 1970s energy policies, and the United States could not isolate itself from political events in the Middle East. 

Today’s energy policy challenge is different. Yes, we still want to strengthen our energy security, but the principal challenge today is how to reduce carbon emissions from not only our energy sector but our entire economy. Ironically, this challenge may be harder due to the energy policies of the 1970s, which encouraged increased electricity generation from coal to reduce the use of oil and natural gas. 

Another difference is that while the nature of the energy challenge of the 1970s was international, individual nations could take effective action to mitigate reliance on oil imports. For example, France promoted an expansion of nuclear energy to virtually eliminate oil use for electricity generation, and other countries increased domestic oil production. The carbon challenge is also international, but no individual nation can meet this challenge on its own. It requires some level of concert among nations, at least the nations with the largest carbon emissions.      

The United States is poised to commit itself to dramatic expansion of renewable energy and a regulatory regime to reduce carbon emissions. Both are vital. New approaches to encourage strong growth in wind and solar power promise much greater success than what was tried in the past. For example, Renewable Energy Standards promote competition among technologies and producers to provide emissions-free energy at reasonable costs. 

I hope the policy mix we adopt to meet the energy and environmental challenges of today is very different from the approach of 30 years ago. The failures of these previous policies were an indictment of the ability of classic rate regulation and command and control to assure adequate energy supplies at a reasonable cost.

Interestingly, one of the lessons of the 1970s was that energy policies will achieve more success if they rely on a mixture of regulation and competitive forces. That has been the approach taken toward regulation of wholesale power and natural gas markets since the 1980s. Policies to reduce carbon emissions should rely on a similar mixture and reject the failed command and control approaches of the past.

Unfortunately, if Congress fails to pass carbon legislation, the United States may have no choice but to rely on command and control instead of a mixture of competition and regulation, since the only path for carbon regulation would be the 1970 Clean Air Act. In the end, whatever policy mix we settle on, we will make mistakes. If we are smart, we can avoid repeating the errors of the 1970s. But we are likely to make new mistakes of our own vintage. One final difference between now and 30 years ago – I don’t expect President Obama to give an energy policy speech wearing a sweater. 

Sadly, in the way that matters, and in the place that matters, our energy policy is indeed running in place. I'll get to where, why and how in a moment.

But happily, America itself has changed.  Main Street gets it in a way it did not in the Carter years.  The world will move on past coal and oil, and if America does not lead the parade to a new energy future, America will follow, not lead, the world.  Poll after poll shows huge public majorities understanding that creating a new energy economy that uses 21st century technology is the key not only to stabilize our climate, but also to enhance our national security, rebuild our industrial job base, balance our trade deficit, improve the quality of the air we breathe and the water we drink, and resume our role as the most innovative society on earth.

States red, blue and purple have been innovating.  Businesses are getting ready for the future.  We now have a new Administration that has embraced the entrepeneurial opportunity offered by a new, clean energy economy.  Science is being listened to in the Oval Office.

So why did I begin with my lament that where it matters we are still stuck?

Because the US Congress continues to see energy policy as a narrow, regionally divided matter of allocating market share to fuel producers -- oil, coal, nuclear.  Congress still acts as if mining and producing fuel was the heart of America's energy economy -- when the reality is we are no longer the world's major oil producer, and for most Americans the jobs they have and the jobs they want depend on new technologies for using energy, not old technologies for mining fuels.

Health care is a very  hard issue. There is no easy economic solution.  But at least Congress understands that energy is a national issue.

Energy is, substantively a very easy issue.  We know what to do, how to do it, and we know we will be much richer if we do it quickly. A study released this morning showed that if create the necessary infrastructure for drivers of plug-in hybrids to swap their batteries out when they need a charge, that by 2030 electric cars would be so much cheaper than internal combusion powered vehicles that their market share would rise to over 60%. Creating that infrastructure is barely on the Congressional radar screen/  Why?

 Because Congress sees energy as a regional issue, and  a national infrastructure to enable plug in hybrids doesn't fit that regional obsession -- Congress will worry about which states get to make the batteries, ignoring the national benefits an electric vehicle system will provide in terms of dollars saved, carbon avoided, and imported oil dependence reduced. 

This regional obesssion is making energy appear to be poltically, the harder issue, even though the American people are much more united about what our energy future should look like than they are about how to redesign health care.

For all of President Carter’s appropriate talk of solar, wind, and other renewable power sources, none of these has the ability today to fuel America’s vehicle fleet. In short, they cannot affect the kind of change we need in our relationship with foreign oil that renewable transportation fuels, like ethanol, can offer.

During the final year of the Carter Administration, America’s domestic ethanol industry was born, producing a meager 175 million gallons a year. Thirty years later, American ethanol producers are supplying more than 10 billion gallons, approximately 8% of the nation’s gasoline supply.

As a result of this growth, domestic ethanol sources are displacing more than 320 million barrels of imported oil a year, saving taxpayers some $16 billion annually. Ethanol production is creating hundreds of thousands of jobs in rural parts of the country often left behind as well as providing opportunities for American students in math and science. As ethanol and other biofuel technologies evolve, developing new feedstocks and increasing efficiencies, the impact these biofuels can have on America’s energy future is almost limitless.

Biofuels alone, as we all recognize, cannot solve the entire problem. We need to continue to develop new fueling technologies, invest in other forms of renewable energy, and responsibly produce energy from our nation’s own fossil reserves. We also must work to more efficiently use the resources we have. In order to do this, consistent public policy must be maintained and the momentum that has been generated since the passage of the 2005 energy bill must not wane.

The passage of the 2007 energy and the work being done on climate legislation in the Senate know are critically important. Unlike any other time in American history, we have the tools, the talent, the know-how and the need to turn President Carter’s call for MEOW into a roar to heard around the world. America has always led by example. Changing how we fuel our future should be no exception.