The U.S. is Running Out of Energy.

(6 of 10)
The U.S. tried to build an LNG supply line once before but, in typical fashion, abandoned it. During the last natural-gas shortage in the 1970s, when lawmakers voted to ban its burning to generate electricity, they also encouraged the establishment of the LNG industry with taxpayer-guaranteed loans and grants. Special tankers, the most expensive ships in the world at the time, were built along with four terminals and re-gasification facilities at Cove Point, Md., near Baltimore, as well as in Georgia, Louisiana and Massachusetts. The first LNG shipments arrived in 1978. In April 1980, Morris Udall, the Democratic Representative from Arizona, told the House that a Congressional Office of Technology Assessment report concluded that LNG imports, "if encouraged, could double by 1990 and meet as much as 7% to 13% of U.S. natural-gas needs."

It was not to be. A series of events conspired to derail the policy. The Algerians, who shipped the LNG, jacked up the price. The Carter Administration and the natural-gas and pipeline companies balked at paying more. After months of fruitless negotiations, the deal unraveled. The ships went elsewhere. Cove Point and two other plants closed. It was the end of the LNG experiment. But the shortage has triggered a scramble to reverse course. Today Cove Point is being expanded and will reopen soon. The plants in the three other states are already open, and plans are on the drawing board for two dozen more.

--OIL PRODUCTION AND IMPORTS: PROMISES, PROMISES. In 1973, with the country importing 6 million bbl. of crude oil and petroleum products daily, President Nixon pledged that by virtue of his Project Independence "in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving." He advanced a catalog of energy proposals that covered everything from drilling on the outer continental shelf to building more nuclear power plants, from expanding the use of coal to conducting research on potential new sources. In the end it didn't work, and the U.S. failed to come close to his goal of energy independence. While the yearly numbers rose and fell, by 1980 net oil imports had increased 400,000 bbl. a day over 1973.

After the second oil shock hit America in 1979, Washington's wandering attention was focused again on energy. Following Nixon's lead, President Carter pushed development of synthetic fuels as part of his strategy to slash imports. When he signed the Energy Security Act into law in June 1980, Carter said it would "encourage production of 2 million bbl. a day of synthetic fuels by the year 1992." That didn't work either: synthetic-fuel production ended up slightly in excess of zero, and oil imports totaled 6.9 million bbl. a day that year.