“Be bold, Mr. President. We may make mistakes, but we are ready to experiment.”
Posted July 15, 2009 at 3:16 pm 
Filed in: Today, July 15, 2009, marks the 30th anniversary of President Jimmy Carter’s infamous “crisis of confidence” Oval Office address. The speech is more commonly referred to as the “malaise speech,” although Carter never used that word during the talk. The context for the speech was a weakening U.S. economy with rising inflation, sluggish economic growth and high unemployment-and of course the beginning of the second oil crisis of the decade. According to the BP Statistical Review, oil prices averaged $94.13 per barrel in 1979 (2008 dollars), which was the highest real price since the Civil War.
The speech was Carter’s attempt to address what he saw as growing social, moral and political decay in the United States. At the outset the President painstakingly outlined the details of those conditions-arguably in too great of detail, for the speech helped lay the foundation for his political downfall. We don’t need to go through all of that here, but the section that reads most jarringly today is a series of quotations Carter had gleaned during a 10-day trip meeting average American citizens, businessmen and political leaders face-to-face. In essence, one gets a clear sense that Americans were desperate for leadership, especially on energy policy. Some standout quotes include:
“We can’t go on consuming 40 percent more energy than we produce. When we import oil we are also importing inflation plus unemployment.”
“We’ve got to use what [energy] we have.”
“The real issue is freedom. We must deal with the energy problem on a war footing.”
In other words, to say that the concerns of Americans in the 1970s still resonate today is probably an understatement. Mired in yet another recession that was birthed-at least in part-by an oil crisis, we find ourselves making similar proclamations today. In 1979 U.S. net petroleum imports averaged about 8 million barrels per day out of total product supplied of 18.5 million barrels per day. In 2008, U.S. net imports averaged 11 million barrels per day out of total product supplied of 19.4 million barrels per day. Domestic oil production has declined, but the most promising areas are held off limits, either by official restriction or official inaction–take your pick. And for all intents and purposes, this nation has no real energy strategy. We are certainly not on any kind of war footing-not when energy security takes a back seat to a complex and contentious cap-and-trade bill that, while necessary, is completely watered down with give-aways to industry and will not eliminate one drop of oil consumption.
We would argue that not all that much has changed on energy since 1979′s crisis of confidence of speech, certainly not for the good. Fuel economy rules and Fuel Use Act made some incremental changes. Oil use in electric power is down to one percent from 1978′s 15 percent. But we still use a gargantuan amount of oil and we still import about half of it. Granted, the U.S. economy is much bigger today, and so the oil intensity of our lives is much lower than it was in 1979–probably by about 50 percent. But that’s not much consolation if you care about greenhouse gas emissions, transfer of wealth or the trade deficit.
This predicament is disturbing, especially if you keep reading Carter’s speech. About midway through the address, the President turned to his vision for the path forward, even laying out a detailed six point plan:
“Energy will be the immediate test of our ability to unite this nation, and it can also be the standard around which we rally. On the battlefield of energy we can win for our nation a new confidence, and we can seize control again of our common destiny.”
Here, in summary are the six points:
Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 — never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade — a saving of over 4-1/2 million barrels of imported oil per day.
Point two: To ensure that we meet these targets, I will use my presidential authority to set import quotas. I’m announcing tonight that for 1979 and 1980, I will forbid the entry into this country of one drop of foreign oil more than these goals allow. These quotas will ensure a reduction in imports even below the ambitious levels we set at the recent Tokyo summit.
Point three: To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation’s history to develop America’s own alternative sources of fuel — from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun. I propose the creation of an energy security corporation to lead this effort to replace 2-1/2 million barrels of imported oil per day by 1990. The corporation I will issue up to $5 billion in energy bonds, and I especially want them to be in small denominations so that average Americans can invest directly in America’s energy security.
Just as a similar synthetic rubber corporation helped us win World War II, so will we mobilize American determination and ability to win the energy war. Moreover, I will soon submit legislation to Congress calling for 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.
Point four: I’m asking Congress to mandate, to require as a matter of law, that our nation’s utility companies cut their massive use of oil by 50 percent within the next decade and switch to other fuels, especially coal, our most abundant energy source.
Point five: To make absolutely certain that nothing stands in the way of achieving these goals, I will urge Congress to create an energy mobilization board which, like the War Production Board in World War II, will have the responsibility and authority to cut through the red tape, the delays, and the endless roadblocks to completing key energy projects.
We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it.
Point six: I’m proposing a bold conservation program to involve every state, county, and city and every average American in our energy battle. This effort will permit you to build conservation into your homes and your lives at a cost you can afford.
Taking score on those points is disheartening. Point 4 was largely addressed with the Fuel Use Act, but look hard at the rest. President Carter put forward an ambitious agenda. But the subsequent crash in oil prices (1985), bureaucratic inertia, and a failure of leadership have left our energy security needs largely unmet.
So on this most frustrating anniversary, we urge America’s leaders–and the President in particular–to take the same course that an average American urged President Carter to take 30 years ago today:
”Be bold, Mr. President. We may make mistakes, but we are ready to experiment.”
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