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Category — Carter, Jimmy

Carter-Obama Energy Policy: From Gasoline Lines to Pipeline Obstructionism

“The Nobels assert that, ‘The myth that tar sands development is inevitable and will find its way to market by rail if not pipeline is a red herring.’ But alternate delivery via rail is not a myth; it’s a massive and growing reality. Maybe before writing to Secy. Kerry, the Nobels should read the State Department’s Final Supplemental Environmental Impact Statement (FSEIS) on the KXL, especially Chapter 4: Market Analysis.”

It is the common tale of two presidents who both declared war on fossil fuels. In the 1970s, President Jimmy Carter’s petroleum price and allocation regulations, premised on the belief that we were running out of supply, put America in the gasoline lines. Thirty-five years later, depletion fears refuted, Carter champions a letter to President Obama urging rejection of the Keystone XL pipeline segment (the last of four legs) on easily refutable arguments, discussed below. And Obama obliged.

Obama’s Easter (non) Surprise

Last week the Obama administration again punted a final decision on the Keystone XL pipeline. On April 18, the State Department, the agency responsible for determining whether the pipeline is the U.S. national interest, said it would wait until the Nebraska Supreme Court reviews a lower court decision that struck down a law expediting approval of a new route for the pipeline through the State. The Court is not expected to decide the case until after the November elections.

How convenient for the waffler-in-chief! Even the Washington Post editorial board let him have it. [Read more →]

April 25, 2014   2 Comments

Obama 2013–or Jimmy Carter 1977?

“Industrial development would have been greatly retarded if sixty or eighty years ago the warning of the [coal]conservationists had been heeded. . . . [T]he internal combustion engine would never have revolutionized transport if its use had been limited to the then known supplies of oil. . . . Though it is important that on all these matters the opinion of the experts about the physical facts should be heard, the result in most instances would have been very detrimental if they had had the power to enforce their views on policy.”

- F. A. Hayek, The Constitution of Liberty (Chicago: The University of Chicago Press, 1960), pp. 369-70.

Government energy planning is a long tried, long failed exercise. The inner Obama in his Argonne speech last week surely channeled Jimmy Carter; and Carter circa 1977 foreshadowed the 44th president of the United States. And President Carter did not introduce the idea of federal energy planning either.

To make these points, consider the following ten quotations, four from Carter, four from Obama, and two from the U.S. Department of Interior in 1939. Can you tell which is which? (Answers at the end)

—————————- [

March 19, 2013   2 Comments

Jimmy Carter’s ‘Malaise Speech’ of July 15, 1979: An Energy Moment to Remember

[Editor Note: Carter's April 1977 energy speech was also reproduced and commented upon at MasterResource.]

Thirty-two years ago today, President Carter and his energy advisor James Schlesinger got it all wrong in an emergency television address to the nation. Their neo-Malthusian, government-as-engineer moment should never be forgotten but stand as timeless warning about the anti-market, anti-energy mentality.

In the summer of 1979, many Americans were stuck in the gasoline lines. There was a lot of lost time and nervousness. There was fighting and worse. The market as a buffer of civility was gone. Americans were not used to such a predicament and had the common sense to know that something was very abnormal and not to be tolerated. They were mad.

Here is the background of his energy speech, considered as the most important speech of his presidency:

On June 30, 1979, a weary Jimmy Carter was looking forward to a few days’ vacation in Hawaii, as Air Force One sped him away from a grueling economic summit in Tokyo. He had earned it. Two weeks earlier, Carter had successfully concluded the SALT II arms control negotiations with Soviet Premier Leonid Brezhnev in Vienna, the latest in a series of foreign policy achievements since the dramatic Camp David summit the previous September.

Aboard the plane, the phone rang. It was Carter’s pollster, Patrick Caddell. “I remember getting on the phone and saying, ‘You people have got to come home now,’” Caddell recalls. “We were all saying the same thing: ‘You have no idea how bad it is here.’”

The so-called malaise speech and crisis of confidence speech, Carter’s fifth address on energy to the nation, was different from the rest. As explained in the Wikipedia entry on Carter:

When the energy market exploded — an occurrence Carter tried to avoid during his term — he was planning on delivering his fifth major speech on energy; however, he felt that the American people were no longer listening. Carter left for the presidential retreat of Camp David.

For more than a week, a veil of secrecy enveloped the proceedings. Dozens of prominent Democratic Party leaders—members of Congress, governors, labor leaders, academics and clergy—were summoned to the mountaintop retreat to confer with the beleaguered president. His pollster, Pat Caddell, told him that the American people simply faced a crisis of confidence because of the assassinations of John F. Kennedy, Robert F. Kennedy and Martin Luther King, Jr.; the Vietnam War; and Watergate.

Where was Milton Friedman or just about any economist worth his or her salt? The gasoline shortages of early 1974 and the natural gas shortages in the winters of 1971/72 and 1976/77 came from the same cause: federal price and allocation controls that did not let supply and demand mesh.

—————————THE SPEECH————————–

Good evening. This is a special night for me. Exactly three years ago, on July 15, 1976, I accepted the nomination of my party to run for president of the United States. [Read more →]

July 15, 2011   4 Comments

Jimmy Carter’s Energy Speech of April 1977 (Is President Obama going Carter’s way?)

The oil and natural gas that we rely on for 75 percent of our energy are simply running out.… World oil production can probably keep going up for another 6 or 8 years. But sometime in the 1980′s, it can’t go up any more. Demand will overtake production. We have no choice about that.”

“To some degree, the sacrifices will be painful—but so is any meaningful sacrifice. It will lead to some higher costs and to some greater inconvenience for everyone. But the sacrifices can be gradual, realistic, and they are necessary.”

“We must not be selfish or timid if we hope to have a decent world for our children and our grandchildren.”

- Jimmy Carter, Energy Address to the Nation, April 18, 1977

Will Obama and his ilk learn the lessons of history?

One such lesson is don’t count conventional energy out. In the 1970s, oil and gas shortages experienced in many parts of the U.S. were erroneously blamed on resource exhaustion rather than government price and allocation controls.

These shortages can be traced back to two presidents who made damning decisions that cost their country plenty. President Eisenhower fathered the natural gas crises of the 1970s when he unexpectedly vetoed a natural gas wellhead decontrol bill in 1956 (1); President Richard Nixon fathered the oil crisis with his wage and price control order of August 1971.

Peak oil, peak gas? The speech below is just another data point of warning against those who are wed to the fixity/depletion view of minerals rather than open-ended resourceship.

——————————————THE SPEECH————————————–

Tonight I want to have an unpleasant talk with you about a problem that is unprecedented in our history. With the exception of preventing war, this is the greatest challenge that our country will face during our lifetime.

The energy crisis has not yet overwhelmed us, but it will if we do not act quickly. It’s a problem that we will not be able to solve in the next few years, and it’s likely to get progressively worse through the rest of this century. [Read more →]

July 13, 2011   5 Comments

Welcome Back, Carter

The 100th birthday of President Ronald earlier this year brought forth a flood of nostalgia. Americans rightfully love their great man. But enviro-revisionism from some slammed Reagan for his reversal of President Jimmy Carter’s energy program. As Joe Romm puts it, Reagan “almost single-handedly ruined America’s leadership in clean energy.”

Such criticism reflects a extremely selective memory and a fundamental misunderstanding of the nation’s energy challenges.

Carter Was Pro-Coal, Nuclear Too

In recent years, true, some of Carter’s energy policies have been rehabilitated in the name of “energy independence” and addressing the alleged human influence on global climate. The implication—not always stated explicitly—is that Carter’s energy plan was primarily about renewable energies. The solar thermal panels he had installed on the White House roof, indeed, epitomized the differences between him and Reagan—who had the panels removed.

But selective memory comes into play, especially in overlooking the Carter-era push to increase coal and nuclear in power generation. This policy arose from his misguided view that the natural gas resource was “simply running out,” which is clearly refuted by the fact that more than three decades later the industry finds itself in a gas glut.

Coal was the energy future for the next decades in Carter’s energy thinking. The Powerplant and Industrial Fuel Use Act of 1978 , for example, restricted gas burning in the named facilities, targeting coal and fuel oil for the “low priority” market to save natural gas for “high priority” homes and commercial establishments. Gas distribution companies, organized as the American Gas Association,  supported the law. (1) Exemptions were granted in the law’s early years, however, and it was effectively repealed in 1987. (2)

Running Out of Gas?

Still, the fired 39th president of the United States might be praised for relaxing price controls on natural gas, except that it was done from the obvious economic distortion of artificial shortages–and because he thought higher prices would husband a “depleting” resource. [Read more →]

April 26, 2011   5 Comments

Jimmy Carter Was Better than This! (Why can’t Democrats embrace a free energy market?)

As a Democract, I have asked myself how it is that the current administration could be so consistently wrong on energy policy. There was a time in the days of Bob Kerr, Lyndon Johnson, Sam Rayburn, and Bennett Johnson that energy policy was bipartisan. In fact, those Democratic wheel horses from the great Southwest made sure that the policy–particularly as regarded oil and gas– was somewhat rational.

Carter Was Pro-Drilling Compared to Obama

The last Democratic President to acknowledge the need for exploration was Jimmy Carter, under whom I served as Deputy Assistant Secretary for Oil and Gas. Carter pushed both an offshore 5-year leasing plan and production from the Naval Petroleum Reserves. I know–I was in charge of both.

So despite the Windfall Profits Tax and much hyperbolic rhetoric, President Carter had a foot, or at least a few toes, in the pro-production camp. And it was none other than Carter who set up the Arctic National Wildlife Refuge (ANWR) for drilling (after adequate study) as one of his last acts in office.

The 39th President also initiated both the decontrol of gas dating from the 1950’s and the (phased) decontrol of crude oil and oil products that began with Richard Nixon in 1971 which Reagan simply accelerated with his famous decontrol executive order of January 1981.

Democrats vs. Drilling

But no more! Democrats today seem to want to fly in the face of reality by espousing phantom sources of energy and working at cross purposes with American interests:

Democrats today tend to:

  • Believe in Peak Oil and the imminent end of the hydrocarbon age
  • Accept Global Warming Alarmism unquestioningly
  • Exaggerate the decline in the state of the environment when it is actually improving
  • View hydrocarbons as a threat to modern civilization rather than its creator and preserver and to viscerally oppose oil and gas exploration
  • Exaggerate the environmental impact of oil drilling both on and offshore

All this leads Democrats to support and subsidize trendy new sources of power (e.g. switchgrass!) without acknowledging how limited or how environmentally damaging they are when implemented on a large scale.

This has only a little to do with “free market” ideology. I assert that a centrist–or if you like a moderate liberal–who believes in moderate government intervention (securities regulation, social security, Medicare, single payer health, etc.) can: [Read more →]

March 27, 2010   12 Comments

Secretary Chu, Repeat After Me: “Consumers Respond to Price Signals, Not Moral Exhortations” (remember Jimmy Carter?)

Thirty years after President Carter declared that our energy crisis was the “moral equivalent of war,” forever known as “meow,” we are faced with another federal potentate who is sure that he knows what is best for us. At a Smart Grid conference in Washington, D.C., Energy Secretary Stephen Chu opined that “The American public … just like your teenage kids, aren’t acting in a way that they should act.”

Just as President Carter declared that our country’s failure to conserve natural gas and oil was a symptom of a “malaise,” not heaven forefend, the low prices for fuels sold at (federally) regulated prices, so does the current Energy Secretary believe that our citizenry is incapable of making rational decisions about energy use.

Why would the smartest guy in the room (read: central planner) say such a thing–a mistake his press office now says?

Incentives Matter

We consumers respond to economic incentives all the time. If the government offers an incentive to get rid of a car that was already paid for, then we will take the $4,500 and walk away with a new one; when the price of oil and gas rise people put on sweaters and turn down the thermostat, install new windows and think about shorter commutes to work; if the government encourages banks to lend money at very low rates to anyone with a pulse, then people will borrow money to purchase houses they cannot afford; if the government pays companies to generate electricity using wind then they will try to do so regardless of its specific utility in the energy mix. Incentives run the world of personal choices. People can only make rational decisions about the real alternatives that face them, not about some theoretical concerns far in the future.

Obviously, the Secretary thinks he was the only person to grow up in a household where dad told us to turn off lights, shut the refrigerator door, close windows in the winter and other staples of energy-conscious behavior. Only it was not really energy-conscious behavior that motivated dad, it was the gas and electric bills at the end of the month.

I’ve got news for you, Mr. Secretary, a lot of us grew up with this dad, made fun of him at the time for his “light bulb fetish,” and now tell our children exactly the same things (and don’t track mud on the floor, while you’re at it!). [Read more →]

September 25, 2009   3 Comments

Obama’s Chu–Echoing Carter’s Schlesinger–Sees Peak Oil and Gas

In hearings recently held by the House Science and Technology Committee, new Secretary of Energy Dr. Steven Chu remarked that energy- intensive companies were seeking to save energy because it could result in large savings (so what’s new?). But then the DOE head said, “the more forward looking companies … see in the long term energy costs just increasing because in the long term, as noted before, oil, natural gas production will eventually peak and decline, plateau and decline” (emphasis added). [Note: this is a paraphrase from the recording, at about 1:32.]

Apparently, Secretary Chu has taken to heart the arguments of the Hirsch report, which was essentially a survey of expectations by various forecasters, primarily peak-oil advocates, [Read more →]

March 31, 2009   No Comments

The 70s: Bad Music, Bad Hair, and Bad Energy Policy (What Obama can learn from Carter)

Many in the energy business, whether or not they support President Obama’s positions on energy and the environment, are likely to think, “Look, the US is a big ship. It cannot be turned around in a couple of years, and even if they tried, you can right the course at the ballot box.”

Actually, you can’t. The United States is still a nation of laws, and without strong political support, the acts of one administration cannot be easily reversed or undone by the next.

But there is more to the story than simple inertia and political head-counts. Each new administration enters with an agenda of positive goals. Spending time and political capital on your predecessor’s agenda can often find its way to the bottom of the to-do list. Moreover, a new president has only a limited circle of advisers. They cannot know everything about what the last guys did (Hayek’s revenge). [Read more →]

March 25, 2009   6 Comments

Beware of the New "Limits to Growth" (and looking for ReaganVision?CarterVision)

Government policies that arrest economic recovery and diminish economic growth reduce our carbon footprint. Indeed, human misery and carbon reduction are positively correlated in a growing world where consumers demand red-meat energy–oil, gas, and coal. The Malthusian wing of the Obama Administration knows this, and they might just be hoping that the recession will last long enough so that folks question their long-standing belief of economic growth. Rising expectations among the masses is the bane of interventionists and Malthusians everywhere.

So get ready for the end-of-growth mantra from the Left as time marches on and Obama’s economic recovery plan keeps the economy from recovering. [Read more →]

February 25, 2009   17 Comments