Energy Conservation (& Efficiency)
Richard Nixon’s domestic advisor, John Ehrlichman, once said, “conservation is not the Republican ethic.” Ronald Reagan joked, “conservation means we’ll be hot in the summer and cold in the winter.” And Vice-President Dick Cheney declared in 2001 that, “conservation might be a sign of personal virtue, but it is not a sufficient basis for a sound comprehensive energy policy.” During the last three and half decades there is a clear pattern of hostility, on the right, toward energy conservation (and government efforts at improving efficiency, which is a form of conservation), specifically toward using the federal government to encourage energy conservation; this hostility has not been shared by the left. Both John McCain and Barack Obama embrace various measures to improve energy efficiency, but it is interesting to note that neither candidate dares to mention ‘energy conservation.’
This is a product of the political lessons drawn from the energy crisis of the 1970’s. Then, as now, policy makers understood the energy crisis as a supply and demand problem. The solution to which would seem to suggest policy’s that reduced our demand for oil while simultaneously increasing our supply. But neither Nixon nor Ford were comfortable using the federal government to reduce energy demand. It was a Democratic Congress, over Ford’s objections that passed tough automobile fuel efficiency standards. Café standards remain, to this day, the federal government’s primary method by which to reduce domestic oil consumption.1
Jimmy Carter embraced energy conservation as the cornerstone of his energy policy. These plans included taxes on inefficient automobiles with subsidies for efficient vehicles; they also included raising taxes on gasoline and a windfall profits tax on oil companies with the proceeds to be invested in alternative energy. Most of these plans died in the Congress. But Carter also directly appealed to the American people to consume less energy, arguing that this effort was “the moral equivalent of war.”
The energy crisis of the 1970’s came to an end when the west effectively began producing new supplies of oil outside of OPEC’s control (most notably from Alaska and the North Sea). While one can certainly argue about the impact a windfall profits tax might have had on the private sector’s ability to secure new sources of supply, energy conservation had a tremendous impact on our energy security. By 1985 café standards alone were credited with reducing U.S. demand by 2 million barrels per day (the equivalent of Alaska’s oil production). Overall, by 1985 the U.S. was 32% more oil efficient than it had been in 1973.
However the enduring political lesson of Carter’s experience was framed by Ronald Reagan and has remained the conventional wisdom since the early 1980’s. Instead of recognizing the impact of conservation on U.S. energy consumption Reagan merely enjoyed the benefits while attacking Carter’s conservation efforts as a failed liberal project. After Carter’s experience there was a certain political logic in the Reagan administration’s desire to forswear federal responsibility for energy policy and to rely on the free market, for this allowed Reagan to position himself as an optimistic defender of persistent American habits and expectations. Reagan saw in Carter’s efforts to sell his program a dour repudiation of faith in a future of unbounded consumption. Efforts to reduce energy consumption or improve efficiency appeared increasingly unnecessary as the price of oil declined in the 1980’s and remained low through the ‘90’s.
Low oil prices encouraged conservatives in the 1980’s and ‘90’s to chip away at café standards. The Reagan administration actually lowered the standard in the 1980’s; when Republicans took control of Congress in 1995 they explicitly banned the federal government from pursuing higher standards. The problems with a purely free market approach to energy conservation have become evident as the nation’s dependence on foreign supplies of oil have increased and as politicians have found it increasingly difficult not to respond to constituents angry about high prices. However, the enduring political reality has been that until very recently, policy-makers in both parties would focus on supply but not demand. Indeed, for some time discussing demand was a sign that one was un-serious, as Dick Cheney’s quote indicates.
The breakdown of that conventional wisdom is evident today in the platforms of both parties and their respective nominees. John McCain promises to: green the federal government spurs the design of a new generation of plug-in hybrid and electric cars, effectively enforce existing café standards and provide $5000 toward the purchase of a zero carbon emission automobile (although such a car is not currently available for sale). Barack Obama offers to do much the same and as well as push for specific tax credits for the purchase of advanced technology vehicles ($7000), an increase in café standards of four percent per year, a mandate that all new vehicles are flex fuel vehicles (McCain supports this goal but only ‘calls on automakers’ to make a more rapid switch to FFV’s), set new national building efficiency standards, and weatherize one million homes annually.
The biggest difference between McCain and Obama rests on their willingness to use the federal government to influence energy demand; this is hardly surprising given the broad ideological differences that have long existed between Republicans and Democrats. Both of their plans have the potential to reduce the nation’s energy consumption, but it is hard not to envision that this would be a goal more aggressively (and successfully) pursued by Obama. If the past (and the experiences of Europe and Japan) teach us anything it is that conservation can produce significant reductions in energy demand and that the U.S. has successfully managed to reduce demand in the late 1970’s and early ‘80’s. If the United States is to free itself from the cyclical experience of high and low prices and the resulting economic and national security concerns that this produces, the next occupant of the White House will face the challenge of not only implementing energy conservation policies but the politically difficult task of defending those policies when prices decline.
Dr. Robert D. Lifset
Donald Keith Jones Assistant Professor of Honors
Joe C. and Carole Kerr McClendon Honors College
University of Oklahoma
1. Since oil accounts for roughly forty percent of U.S. energy consumption and since oil policy has long been a concern of federal policy-makers, this comment will focus on oil and not address conservation efforts in the utility sector which were largely driven by state and local governments; ‘café’ is an acronym that refers to the corporate average fuel economy standard, the law currently requires manufacturers to meet a 27.5 miles per gallon standard.