ENERGY: Back on a Dangerous Binge

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Shortly before President Ford's nomination in Kansas City last week, his Democratic rival Jimmy Carter met with advisers in Plains, Ga., to discuss what U.S. energy policy should be. After four hours of talks, Carter emerged to report a consensus: the nation still lacks a "comprehensive, long-range, understandable energy policy." Though that is a charge that few Republicans could or would dispute, energy probably will not be much of an issue in the coming campaign. In the 33 months since the shock of the 1973 Arab oil embargo, public concern about that issue has slid from white-hot worry to detached interest to what now seems to be near total apathy. A recent Gallup poll indicates that only 2% of the voting population regards energy as the most pressing national problem, above such other matters as cost of living, drug abuse and moral decline. Indeed, energy is only briefly mentioned in the two parties' campaign platforms.

That is a sweeping change from the near panic of late 1973 and early 1974, when motorists were lining up at fuel-short gasoline stations, many American towns were extinguishing Christmas lights to conserve electricity, and a new Washington energy bureaucracy was drafting a program to encourage conservation and the development of domestic fuel sources so as to eliminate dependence on oil from the Organization of Petroleum Exporting Countries by 1985. Today, Project Independence is largely dead; federal energy analysts concede that there is no way for the U.S. to become totally independent of foreign oil.

Increased Dependence. In fact, the U.S. has become much more deeply hooked on imported crude, and the trend appears unlikely to be reversed. Imported oil presently supplies an astonishing 41% of U.S. needs, v. 29% before the embargo. And because Canada and Venezuela have been cutting down on oil exports, almost all of the recent increase in U.S. needs has been supplied by Arab countries; their shipments to the U.S. have doubled in the past year and now account for more than 12% of American consumption.

How did it happen? The cause of the renewed U.S. oil binge is the economic recovery combined with a reckless return of American extravagance when it comes to energy. Even before the vacation rush began this year, motorists were using about as much gasoline as they had been in 1972, before the recession and the quintupling of foreign oil prices that drove the cost of gas to 60¢ or 70¢ per gal. at the pump (see chart).

The use of electricity has surged too. Some utility men even fear that generating capacity may be strained as the economic pickup proceeds, bringing back the brownouts and occasional blackouts of the early 1970s.

In dollar terms, the renewed energy binge will be costly. The bill for oil imports will rise from last year's $27 billion to $35 billion this year. The U.S. economy will pay for this increase partly in a transfer of assets to OPEC countries and partly in a loss of some of its consumer spending power needed to continue the recovery (see following story).