The Energy Crisis
The"Energy Crisis" Y o u were right all along. The "energy crisis" doesn't exist. It is imaginary. There is a crisis in oil, although not the one you might think. But in energy, there is only...
...tremendous untapped reserves of power from water and sunlight...
...Sometimes, in our obsession with the intricate, we overlook what is hiding in plain sight...
...Remember, during 1973, year of the "Arab oil embargo," U.S...
...The status-quo embraces OPEC's price because it makes all forms of energy more profitable...
...Another Chinese fire drill was staged in Washington...
...The Saudis compensated by stepping up production to full-tilt, covering the loss of Iranian oil...
...We transform studied bewilderment into a virtue, as President Carter has in presenting himself as the candidate of complexity...
...But simple solutions do exist...
...Sound good...
...How, without pretending that energy disaster is imminent, could reformers justify the ubiquitous social controls they seek...
...Politicians, regulators and businessmen began thrashing about in pantomime panic, predicting doom...
...If such logic were a horse, it would be taken out and shot...
...The Editors...
...Plentiful energy, with no doubt about long-term supplies...
...Consider what occurred during the "Iranian oil crisis...
...They are not fools but, believing the crisis to be real, have persuaded themselves that a society without energy would actually be a pleasant place to live...
...and most of all, an astonishing bonanza of cheap, clean natural gas, the fuel that's supposedly vanishing...
...This unlikely coalition between reformers and status-quo defenders is best revealed by their acceptance of OPEC's monopoly price as the "true value" of energy...
...untapped "reserves" of conservation from efficient machines...
...The reasons is this: There are two dominant forces in the energy debate...
...Of course it does...
...Early in 1979, OPEC's artificial price for oil was $16 a barrel...
...And energy companies that were profitable at $16 had little trouble adjusting to the idea of doubling their income...
...Another artificial facet of the "energy crisis" is this bit of Wisdom: "There are no simple solutions...
...OPEC was making money, and American oil companies were making money...
...The"Energy Crisis" Y o u were right all along...
...Ideas which involve ample energy and lower prices are actively opposed...
...Reformers endorse OPEC's price because it discourages consumption...
...Taking advantage of the confusion, OPEC doubled its price to $32 a barrel, which was quickly enshrined as the "true value" of energy...
...Many people on this side actually don't mind subservience to OPEC, since they get a piece of the action...
...It propagates itself into energy "solutions" like the synfuels program, and laws which actually forbid the natural gas bonanza from being exploited...
...And it lives in fear of simple solutions...
...The genuine crisis is that oil costs too much...
...But comical government oil-allocation policies created gas lines in the U.S...
...Then the Shah fell...
...Yet the price has nothing to do with the "value" of energy...
...So world supplies were not imperiled...
...They are not malevolent, but seek to preserve existing arrangements, from the personal influence of individuals to secure, government-guaranteed profits...
...Since energy is abundant, many oil-users can switch to something else...
...The U.S...
...Trumped-up energy prices are the driving force of inflation, meaning the bulk of the world's economic problems have an artificial origin...
...But in energy, there is only abundance...
...it does mean there is no reason not to use as much energy as you legitimately need...
...But fully half our consumption—more than we import—goes to factories, utilities, buildings, and other sit-still users who don't need oil...
...OPEC extortion not only makes oil needlessly expensive but creates an atmosphere in which other energy suppliers can charge artificially high prices...
...Suppliers of other energy forms were making money too, especially since many were using contracts that indexed their price to OPEC's price...
...Reformers thought it served everybody right...
...That winter, there had been a mild glut on the world oil market...
...One force is defenders of the status quo—Big Oil, utility monopolies, entrenched government programs...
...Iranian oil production ceased...
...Now that's a crisis...
...These apparently opposing groups operate from a common premise: People must be led to believe that energy is disappearing, and higher prices are inevitable...
...In such an atmosphere, ideas which rely on scarce energy and ever-higher prices are endorsed...
...They dream of relaxing chats by the fireside in a book-lined den, and do not appreciate what true energy scarcity would do to the frostbitten fingers of the poor...
...Here is one: First, open up the natural gas market so the domestic surplus can manifest itself...
...Saudi Arabia curtailed its production, to keep prices firm...
...How, without maintaining the illusion that energy must be ever more costly, could industry possibly justify the extraordinary cost of nuclear reactors...
...The crisis in oil also has nothing to do with "running out...
...Yet you've never even heard it discussed in Washington...
...Countering them is a force of reformers— consumer groups, academics and journalists, young politicians...
...This does not mean you should mow your lawn with a flamethrower...
...Instead, in our imitation-doomsday system, it's syndicated for stud...
...It is set by a monopolist, in the classic monopolist's fashion...
...Then, to escape the OPEC blackmail price, anyone who can convert off oil will do so...
...A monopolist controls oil, forcing prices to an artificially high level...
...Our transportation system needs oil...
...has more coal than it could use in centuries...
...They can just as easily use something else...
...oil imports actually increased 12 percent...
...Where there is a crisis in oil, it has nothing to do with gas lines, which are the product of clumsy regulation and corporate hanky-panky...
Vol. 12 • October 1980 • No. 8
