Energy Crisis: End Of The Beginning?

We are heading toward the most acute shortages of energy since World War II. Our supply of petroleum this winter will be at least 10% short of our anticipated demands and it could fall short by as much as 17%. We have been accustomed to an overabundance of cheap energy that day has ended. We meet here this morning in an effort to get the facts about the energy crisis. The facts are we do not have the facts. We don't even know how much of a real energy crisis we actually have. This is what we will achieve in 1974. We will break the back of the energy crisis. The facts as I see them and as I honestly believe them are that we can't solve the energy crisis in 1974 or 1975.

Now the back of the energy crisis has been broken. Is the energy crisis indeed over as the President claims? Are we deceiving ourselves? Have we learned anything from the crisis? And if so will the mistakes of the past save us from mistakes in the future? The energy crisis, end of the beginning? Here is NPAC correspondent Paul Duke. Good evening, the end of the Arab embargo has eased the country's energy shortage and with it the country's hardships. With the oil tankers again arriving from the Middle East, the long gas lines have disappeared and life seems almost normal once more. But the effects of the five-month crisis have not disappeared and they suggest in fact that Americans must face up to the hard reality that in some ways life will never again be the same.

There is first of all the big increase in prices, fuel for heating homes up 50 percent over last fall, gasoline up 26 percent, electrical rates up an average 7 percent but in some cities more than 50 percent. Big increases in the cost of energy-related products, fertilizer almost 100 percent, for example. Profits are way up too. In recent days the major oil companies have reported big jumps in first quarter earnings compared with the same period last year. Exxon profits up 39 percent, Gulf 76 percent, Texaco 123 percent, Conoco 130 percent, and Occidental over 700 percent. There's been the effect upon jobs upwards of 500,000 persons laid off during the crisis. The auto industry was hardest hit followed by heavy layoffs at service stations.

Airline workers were severely affected as were the recreational and tourist industries. But the impact on our buying patterns may be more lasting. Detroit reports smaller, compact cars have gained an additional 9 percent of the car market. And a positive benefit, the lowering of the national speed limit to 55 miles per hour has reduced traffic fatalities with the government now estimating 6,000 lives may be saved this year. We see the energy crisis as a blessing in disguise, as something which has awakened the country to the need for fundamental changes in lifestyle. Blessing or not, it has raised some disturbing questions about our values and our future. And tonight in this hour long report, we examine the controversies and the conflicts, and hopefully provide some answers to vexing questions. Will the prices keep going up?

Are the profits too high? Can we go on living in the old wasteful ways? Can the world's richest nation, with only 6 percent of the world's population, go on consuming one-third of the world's energy? Do more shortages lie ahead? And why didn't we see the shortages coming? It's not easy to assess the blame. The roots go back a long time. In the 1960s Stuart Udall was secretary of the interior for eight years, and he acknowledges that he didn't foresee the bad times. Did you have any idea that we were headed toward this kind of crisis? Not really, because in the 1960s we were wrestling with problems of surplus for the most part. There was always a surplus capacity down in Texas. They acted as the national surge tank for oil. I look back now and I could see the signs then. We were concerned that we were going to hit the point where our consumption would be

at a rate that we couldn't sustain it. But there was still the picture well as somewhere off in the future. There's enough oil for our lifetime. I got alarmed three years ago when I saw two things happen, U.S. production peak for the first time, and the world market developed a situation where it was clear that prices were going to go up and that we could not continue to import all this oil that we were planning to import. The people that were doing the estimating, the petroleum geologists, tended to be super optimists, I call them. They always took the highest figures. I think they misled the country and I think they misled me. I know that. Dr. King Hubbard, a distinguished petroleum geologist who's predicted the whole course of U.S. petroleum in the last 20 years was in the department. I didn't even know he was there. It was just the idea that you would take the highest estimates, take the most optimistic

estimates and base national policy on that. I think this was a very improved and unwise thing to do. Do you regard the government as the chief villain in the energy crisis? Well not really except that the government's supposed to look out for the national interest. If we're going to have an national energy policy, the government ought to make it and not the oil companies. The oil companies really have had great power. This has been the most freewheeling area of our whole economy. The oil companies clearly are the most powerful industry in the country and they really made policy and so I guess yes, the government does have a responsibility because we didn't have an national energy policy in the 60s, we don't have one now. Would you say that the politicians have failed us then? Well the energy crisis sort of boggles the minds of politicians. In this post-war period it's been the politics of more, elect me and there will be more for

everybody and all the politicians play this. And suddenly to have a society of scarcity, to have to tell people less is more, this sort of buffaloes, congressmen, senators, presidents, but I believe that nobody really thought that this could slap this country down or stop us in our tracks the way it did last winter. You'd all is right, what happened during the winter was a rude awakening for Americans long accustomed to a culture where growth has been the golden goal. So when the Arabs turned off the spicket, we weren't prepared to cope with the consequences. There was bewilderment and frustration and anger and among those on the front lines such as the truckers there was even violence and some death. A trucker's strike raised the specter of economic paralysis for much of the country and a revolt by service station operators threatened a gas blackout in some areas. But for most people the crisis meant waiting and fuming in long gas lines.

In 22 states, car owners bought gas only on odd or even numbered days. The weights were longest in February when thousands of service stations ran out of gas. And as Jim Lera reports, the crisis affected almost every facet of life in one typical town. We went to Nashua, New Hampshire because of its location and its character. This area was hit hard by oil and gas shortages because there are no refineries in that part of the country and it depends almost entirely on imported fuel. And it's colder in New Hampshire in February than in many other parts of the country adding still another crisis factor. The special nature of Nashua also interested us is the fastest growing city in the northeast, caught in a struggle between being a relatively quiet country town or a fresh air suburb of Boston 45 miles away. But Nashua still looks the way it has for almost 125 years, a picturesque New England mill town.

Yet the postcard view of the river is deceiving. Nashua's population is 67,000, a 50 percent increase in 10 years. The great textile mills of that earlier time still dominate the skyline, but instead of spindles and looms, they now house modern industries, making electronic gadgets and plastic toy lawn mowers. Nashua also kept its main street, the kind Sinclair Lewis once called the climax of American civilization, a homey busy thoroughfare of commerce and small business. The type of main street were old timers, trade busy body gossip and strong opinion, and in mid-winner on main street there was primarily one topic of conversation. But all these things and considerations, you're kind of going to work and travel a hundred miles which are kind of today and think that you're going to get all the gas, think you can because you're kind, 95 percent of people don't want to walk today, they want to ride.

Yeah. I'm old man now and there's so many cars on that all day, you've got to be, you know, I'm in. Yes, I know there is. I know there are many people who have a car, it's way cold. The older folks had seen Nashua through many crises, wartime, floods, fires, the shut down of the mills, but this was a new kind of emergency. It cracked the assumption that cheap gasoline and oil would always flow and when the oil trucks began rolling into town less often, Nashua knew the energy crisis was real. It's time for the show now, on W.S.A.M. Here is Ed Vicious now. Here we are, the evening edition of Open Line. Ready to accept your calls, and you'll lay it on the line. Today was an odd day. Today was the one for the odd fellows. Downtown, like the Mercury Open, why would you like to join us? This gas situation in Nashville is real. Believe it or not, there are 43,000 cars and trucks in the city of Nashville alone.

The 60 stations in Nashville have a total of 86,000 gallons of gas per day to sell. It doesn't take a genius to figure out that allows two gallons per day per car. If the federal government is going to allocate gasoline and they damn well about it allocated equally, and this is really what it all comes down to. When a guy comes in for gas, sell him up. He won't go into somebody else's line. He created their own line in the city by only giving them a little bit of gas. Fill him up and they won't be back. This gas thing is a ridiculous thing. And most of us, I think, believe it, and I think most of us are right. There's no such thing right now. Only trouble is, there's nobody in Washington doing any fighting for us. I agree with him. Something's rotten in Denmark. Something's been rotten in Denmark for a long time. Hello? Hello, Ed. Yes. We're here from Congressmen. They're talking about gas, right? I still think the free end price system would work if the government would get out of it. Well, we'll continue in just a moment. This portion being brought to you by downtown like the Mercury.

If the gasoline shortages got you scared, partner, get a horse. Your four dealer has three little thoroughbreds named Pettel, Maverick, and Mustang, too. There is who, either, is dependable and economical. I guess the regular. I don't know what I'll put you with. Lou Dubby, a gas station owner for 30 years on Main Street, saw it differently. It's just very good. Less hours. We can get more work done inside afterwards. I have more time for my family. If you work nights and days and Sundays, holidays, everything else, now you don't. I just had three days off. Went to a wedding and had a beautiful time. Never worried a bit. Very good. I love it. I'm losing almost $20 worth of business. And then calls with this gas shortage. What I used to take home, $40. Now I'm bringing home, maybe roughly, $29. That's after the expenses. I mean, I'm going to probably have to get a five-time job.

I mean, I'm not making enough money for my family. For Ken Dion, the gas shortage threatened and already precarious livelihood. We just make so much and go by what we have. We don't have, we don't make. We can't spend it out. We don't have it. Just a big fuss. Dion, the father of four, had been driving a cab for nine years. It's all he knows. Hey, Julie, you got to die. I'm going downhill for a bit and I don't understand why. My wife says get out of it. I mean, we're trying to live on just Kenny's one income. And we've got four kids. In other words, there's six of us here. I mean, it isn't so much as us. I mean, we're grown-ups.

We can handle it. But what about the kids? Sue Dion bathes her children in the kitchen sink with water heated on the stove. They turned off the water heater to save money. But they couldn't turn off the furnace and a 90% cost increase for heating fuel. When their tank ran dry, the Dion's turned to the city welfare department to keep their home warm. And in the old, uninsulated rented house, there wasn't much they could do to save on fuel. The only thing that we can do about the heating situation here is I've got one room shut off. And I have taken clothes that we don't wear anymore. And I've put them around the cracks of the doors. And the draft coming in, we're heating the outside. Okay, we get 100 gallons of oil in the furnace today. We're going to have to fuck out 3770. So, at the price that it is in the amount of money that he's making, we just can't make ends meet. That's hard.

But remember. They get mad about the prices for a lifetime. Every time the price went up, they get mad. But it's just one of those things, you know? Like, in May, we were 29 and a gallon. Now we're 36.5, which is quite an increase, obviously. Nashua didn't run short of heating oil as many had feared. But dealers like Bob Bowdry, whose family had been in the business for 70 years, weren't taking any new customers. And Bowdry didn't give the government allocation program much credit for preventing a worse situation. I think we hadn't had the good weather that we had. We really being touchy. The thing that really is bad news, really bad news is the older people who are on fixed income, social security or pension. And it's just unbelievable. Some of them are keeping their homes like 60 degrees and just the fact that it is so high to buy the oil. And they're making choices whether or not to eat or whether to have it at 62 or 65. You know, like anybody selling products to services, we want to sell.

That's our livelihood. But we're in a position now that we just can't get enough products. We can't increase or grow, right? As far as the gas for the car and all for the heating the house, we're just not making it. We're not making enough. Are we going? We're just not making enough. They buy that. No, no. We're just going to have to forget one bill. That's all. No, wait, one bill. We can't forget though. We can't forget the oil. We've got to have heat. We can't forget the car because we've got to have the gas in order for you to get the calls. Well, then it looks like someone has to get a minute job besides this one. Well, yeah. You can't find them in the job being placed else because nobody's higher. No, it's going to have to do the best we can. Indeed, jobs were hard to find. As the oil shortage worked, it's caused an effect way through Nashua. The MCO division of Ingersoll ran produces machinery for making plastic cups. When the plastic cup companies couldn't get enough petroleum-based chemicals for their product, they slowed production and stopped ordering machinery.

MCO laid off 80 workers. J.F. McOwen Company makes Tom again shoes. The gas shortage curved people's shopping trips and sales slump. McOwen slowed production and went to a four and a half day work week. The crape sold on many of their shoes used chemicals derived from oil. McOwen's chemicals suppliers cut the amount of oil derivatives in their mix. And the new crape sold fell apart. And McOwen engineers went back to the drawing boards. Minor industries in Nashua makes plastic toys, and it, too, depended on petrochemicals. The cost of their raw material went up 300%. In addition, they must scramble for the raw plastic in a quasi-black market where availability is not always certain. In mid-February, the quality of their product went down. Some lines of toys were discontinued. The company couldn't raise their prices because of the competition from the far east. Meanwhile, their fuel bill tripled. It wasn't just higher oil prices.

The gas service company cut off new commercial accounts completely, and its sales staff discouraged natural gas for homes. Though customers used 4% less this year, they faced a 14% price hike. Some people turned to electricity. This canceled out power savings from homeowner conservation. Since New England is heavily depended on high-priced imported oil for its power plants, customers soon discovered a new floating surcharge on their bills. The utility got a 7% price rise and was seeking another 6% hike. And while experts talked about exotic future energy sources, many Nashuans were ready to return to the past. And this produced an unexpected flurry of business at Thomas Good's hardware store. People were very, very concerned about running out of fuel. And it has put a tremendous demand on our ability to supply certain types of merchandise. One of them being axes, chainsaws, all the related materials in order for people to cut and limb, provide their own wood. And of course, the stoves which we have here have been a tremendous rush on these this year.

Much greater than we could ever keep up with. Because, again, people were very fearful, I think, of running out of fuel. And we're preparing well in advance for it. People didn't just go after wood to stay warm through the winter. A bar's clothing store on Main Street had a run on long underwear. It couldn't meet the demand. Let us pause a moment to pray. We praise you a lot in this energy crisis. We ask you for courage and faith in our fellow men. That we might use the talents that you have given us, like creativity and ingenuity and practicality. We ask you also for courage that we may use these talents to meet the challenge that is ahead. Amen. Father George Searwell seemed to strike the right note as the Nashua auto dealers gathered one morning for a pepper alley. Washington's birthday is traditionally the biggest sales day of the year in Nashua.

But the assembled salesman heard a discouraging message from dealer Jim McKay about this wetter of their discontent. What are the real problems we've got? Let's look at it as it is. We've got big car inventories. Boy do we have big car inventories. We've got shortages of the cars that people want the most. We don't have enough small ones. Is the customer going to continue to stay away? We know he isn't because when you really look at the problem he's out there wearing out cars, isn't he? He's not wearing out shoe leather. He's wearing out cars. There's no other place to do it but to drive. And so that alone gives us the confidence that we know that we're coming back. We're starting right now. You're famous for making comebacks. You're always making a comeback, like Sinatra. You're always coming out of, you're always retiring and coming back. Cardials are unnoted for, for their comebacks. But we don't have any place to come back from because we've never been away.

It's a customer that's been away. The customers were also staying away from the buses. The city dropped bus service last year but did subsidize a downtown line to ease the gas shortage. But most buses ran with few passengers. The city government was hard hit by both shortages and higher prices. Second reading of the Results Relative to Volunteer Emotency Plan. But consumers and service station dealers on a sale of gasoline. School buses were the biggest problem since they were not included in the city's fuel quotes. It took an emergency delivery to keep them running. The police department also exhausted its supply and police cruisers were forced to wait in the gas lines with everyone else. After local gas station owners took the lead, the councilmen did approve the odd even system, the first city in New Hampshire to act on its own.

Carries and Resolution is adopted. Is Asana wish to address the board? Yes, Mr. President. The life is thanks to people's measure for cooperating and working out the odd and even arrangement. It hasn't been rather respectable. I haven't got any complaints today. I'm more convinced than ever that home rule or action on a local level can more readily solve problems. In this instance, Asha has led the way. Asha, trust open line. Hello? Yes, Mr. Lee. Yes. I just had to call and say, hooray for that order you can plan. Is it working? I think it is terrific. Where you are, you'll see today. You're naughty, aren't you? More ways than one. I just say it is great and I think it's perfect. This is getting ridiculous because you're not happy tonight. No. You know, the people have been being taken right over the racks and it's about time we start thinking.

And all I could say is I really don't think it's fair. There's too many people getting greedy, I guess. And you know, we all work together. I think we can help the situation out. I, for one, would like to see the people say, get out of the business world government. Asha, trust open line. Hello? Well, what's happening now? Everybody's getting at everybody's strokes here in the city in Asha with gas station operators and the people themselves. Look at what's happened to the prices on gasoline. You just have no way of knowing how much of that green you're going to need. Well, maybe you can blame yourself if you do not write your representative or your senator and tell him like it is. You have to keep after these people and you got to write to them quite often. Maybe once a week if it's necessary. And you've got to almost threaten them and tell them that they're not going to get your vote if they don't do something. Now, they're all making big to do over the oil shortage. But nobody is doing anything about it. Nobody.

They'll never, never, never stop. You know, keep, keep beating the drums and wait on the line. So if our gas station would cooperate and get open and give what they can give, there wouldn't be so many people complaining like I do. And historical film of sorts. The remarkable thing about this one is that the story is only two months old. What's happened in Nashua since those tough days of February, now that the energy crunches is eased? Well, we went back last week to find out. On the industry side, MCO has not rehired those 80 workers. The toy company is still fighting a price problem. And the shoe factory is still without a complete answer to its sticky craped soul's crisis. Otherwise, the April story varied with the individuals and the perspective. Our first stop was on Main Street at Lou Duby's service station, where both Lou Duby's life, as well as those of his customers, have gone through another change. Well, it's right back to normal, but we were before the energy crisis. Seven days a week, nights, holidays, Sunday, everything. Now we're looking for customers.

Where we used to turn them away, now we're looking for them. Because everybody's got plenty of gas. What about the long weekends you were taken before? You personally? Gone. Now I can mean every Sunday morning. I can mean Saturday mornings. I even work some Saturday afternoon. Gone. No more five o'clock at night. It'll six, six thirty. The city government's point of view is the energy crisis over in Nashua. Now here in Nashua, the energy crisis is certainly not over. It has lessons to a great degree, but we're still experiencing some receipt of only 90% of our needs. For example, here in a city, our monthly needs are approximately 30,000 gallons a month. Latest allocations show that we're receiving. We'll receive approximately 27,000 gallons this month, which still leaves a short. And as a result of this, obviously have to curtail some of our normal uses. You still on your broadcast, say whether it's an odd or even day or even a bad even, even speak to the gasoline situation anymore?

Don't even touch upon it. Oddly enough, except now and then somebody else say, well, it happened. It's just what they wanted to do. They got the prices up there. Now the prices are up there. You know, it's nothing more than they said when the meat situation. So what's next? The time of the energy crisis, I had to get out of the cab because it was really affecting me bad. So I came to work in the plastics, thinking that maybe you get ahead a little bit, which I have. Why did you go to work? Well, because the amount of money that he was making, he just wasn't, you know, making ends meet because we still had to pay the, we still had to pay the oil bill. I mean, the weather got a little bit long, I mean. So I just got a baby sitting there and said I'd go to work too. Between what both of you are together, what both of you are making now is it has helped your overall life, right? Yeah, it's helped. I mean, we still got the bills and stuff like that, you know, on our back. But I mean, at least the money is coming in and I mean, we can do something about it before. Gosh, you didn't know from one day the next thing we're going to have a meal for the kids, but Bill's going to pay it or bought into cool or what? At least now we get something that we can fall back on anyway.

When we were up here in February, you painted a rather jury picture for the car business. How is it like now? What's it like now? Jim, the car business has got as much bounce this spring as any spring I can remember. And this is, it's kind of come back probably faster. I'm just talking now about the feelings we've had the last two weeks. And any time I've ever seen it come back from an average period. How are things now for you compared with the way they were in February? Well, essentially about the same. We're still on allocation. And other than, you know, the weather is getting great, you know, the spring is coming. But the allocation program is still in effect. And price controls for petroleum prices still in effect. So things really haven't changed a lot. The people generally in Nashville, are they feel that they're back to normal as far as energy crisis is concerned? I think they sort of have a false security. They did things on back then on which they are. And I don't think they will be for a while.

I couldn't even say how long. Because essentially what happened during the winter was the herbs did us a favor really by shutting us off. Because they made us realize now while there was still time that this situation did exist. The shortfall between supply and demand. And I think people are during the winter were extremely aware of the fact that they were using energy. Whereas before they just didn't even think about it. It wasn't part of their thinking at all. And now I think they realized that, like I said, they are using energy. And I think they're thinking either using it wisely rather than before where they really didn't care. If Nashua is any indication, most Americans are now taking a much more relaxed view of the energy shortage. At the height of the crisis, most people did cut back their thermostats and gas consumption dropped by 20%.

But the conservation mood began changing as soon as the Arab embargo was lifted March 18th. Even before the first tankers reached Atlantic ports, President Nixon lifted the Sunday ban on gas sales and downgraded the emergency from a crisis to a problem. Overall, sales of gas are now almost back to pre-embargo levels. Highways are becoming crowded again even on Sundays. Big car sales are going back up and car pools are going back down. This back to usual trend worries some authorities who believe the country may have missed a notable chance to make some basic changes, changes that would reduce automatically consumption and thus conserve fuel. David Freeman, one of the nation's leading energy experts, sees a return to normalcy as a return to complacency. Is the crisis over? No, the crisis didn't come with the gas lines and it didn't leave with the disappearance of the gas lines.

It's been building up in a sense since Henry Ford invented the Model T and the Wright brothers invented the airplane and I guess 1974 turned out the year when it really came home to us. 1974 might go down in history as opportunity lost. We had a situation where the Arab nations were unkind enough to telescope the future for us and teach us a very painful and surprising way, the lessons of a wasteful energy society. In my view, they didn't do us a favor by ending the embargo as soon as they did. This country was really on the verge of entering a new era and the jury is still out on whether we've learned the lesson from the embargo or not. I'm afraid that the signals we're getting from the White House, that the back of the crisis is broken, that the situation on gasoline is normal, are the wrong signals and I guess I'm afraid that the country is going back to sleep again.

How do you turn the country around? Well, I think that the country just about got turned around in the last three or four months. Many of us were literally talking to the wall in years past because you had to be kidding talking about energy, frugality, everybody knew there was plenty of oil. You went down to the filling station and they flooded you with the green stamps and glasses and anything else to get you to buy more. So we were really whistling in the dark, but this winter, all of my friends and every audience I spoke to suddenly became believers and that's the reason it's so frustrating to me to see this wealth of enthusiasm for moving in a new direction, dissipated by these mixed signals, but I think that the country is still very much on the historical growth rate.

If indeed we are sliding back as Freeman fears, what is the answer and more specifically what should the government be doing? President Nixon's answer is an all-out program to achieve self-sufficiency in energy by 1980, but some people believe this is unrealistic and perhaps even unwise. For now, there are other more basic questions. Should the oil industry be regulated and should Congress take away some of its tax benefits because profits have been increasing? Should the government set up its own agency to compete with the industry and to assure more competition? Or should we move in the opposite direction and deregulate natural gas to encourage more exploration? Should the consumer bear the main burden through high prices? To explore all of this, we have with us John Sawhill, the just named director of the Federal Energy Office, Howard Hardesty, Executive Vice President of Continental Oil Company, and Lee White, former Federal Power Commissioner, and now a consumer advocate on energy matters.

First, Mr. Sawhill, has the experience of the past few months been a missed opportunity as Mr. Freeman and some others now suggest? I don't think the experience has been a missed opportunity. I think the embargo awakened the people of this country to the fact that we really do have a serious energy problem, that we have a significant imbalance between demand and supply, and that we are going to have to launch a major comprehensive program to try to balance our energy budget. And this program has got to entail a vigorous conservation program as well as an all-out effort to bring on new energy supplies. Mr. Hardesty, well Paul, I get concerned from the figures we've seen in the last ten days ever since the embargo has been over and the gasoline lines that the service stations have disappeared, we're seeing a resumption of very heavy demand for gasoline. And if the figures that we have seen in the past week would continue on into just the near-term future, I think we're heading into some other dislocations, perhaps problems that means that we have not learned from the rather tragic period we went through in the first quarter of the year.

You agree with Mr. Freeman? Well, in that one statement, I hope we'll capitalize upon the problems we had in January, February, and early March to realize that we do not have gasoline and inexhaustible supplies, and that we got through this period really by the sacrifice of a good million Americans who gave up and said, I'm going to Carpool, I'm going to Mass Transit, I'm going to change my way of life. Now that the lines have disappeared and seemingly the embargo is over, everyone thinks we're back to where we were in 73, and that is not the case. If we do not conserve and make that a major ethic in our life and what motivates us, we can be in trouble again as a gasoline season peaks. Mr. White? I don't want to break the pattern, I'm with the gentleman completely, I don't expect Mr. Sawhill to comment, but I think it was most unfortunate that President Nixon sort of unilaterally declared the crisis ended.

It is not ended in the sense of a severe problem that we face, and it's a long-term problem, it's not really now that we've gotten through the winter, we've also got to get through the summer. And there's another winter coming and then another summer with good luck, so that if anything comes out of this unanimity, it is that we have got to steal ourselves for a long period of time, and we've really got to face up to a tough situation and make the necessary adjustments in our lifestyles. I think it's all to our national benefit that we do so. Paul, that's just not an individual sacrifice it has to be made. There have to be sacrifices too by business and industry. And I think we've seen in the last two or three months some rather significant savings and energy consumption, more efficient use of it. So it's not a pattern in which you say, excuse me Mr. Consumer, you're going to have to drive your automobile last.

It's got to be in across the board, real dedication to making more efficient use of what now we recognize as our limited natural resources available for today's consumption. Well, our office intends to launch a very major program in the near future to ensure that we do launch and across the board conservation effort. For example, I expect to meet with the leaders of the major energy consuming industries in this country, like the steel industry and the aluminum industry and the paper industry and the cement industry. And I'm going to ask them to set energy reduction goals for their industries. I also expect to talk to the leaders in the automobile industry, and I'm going to ask them to set efficiency goals for American cars. It seems to me that we have to be able to achieve 17 miles per gallon by 1980 and perhaps 19 miles per gallon by 1985. And that's up from about 13.6 miles per gallon, I believe today. So I think across the board and industry as well as in the consumer sector of our economy, we can conserve and we will conserve.

And yet your predecessor, a short while ago, I'm referring to Treasury Secretary Simon, Mr. Sawhill, he suggested on national television that people could go ahead and plan their vacation. And that with some conservation, we could live in a normal fashion in this country. Now, are you disagreeing with what he said? No, I don't think I'm disagreeing with what he said. Mr. Simon and I have felt from the beginning that the way to manage the energy shortage that we found ourselves in, not only the shortage last winter, but the smaller shortage that we'll be facing this summer, was to do it in such a way that would preserve jobs. And we've got to preserve jobs in the recreation industries in this country, just like we've got to preserve jobs in the steel industry and the aluminum industry. And so I think what Mr. Simon was saying was that if, and it's a big if, Americans can continue to conserve if they can continue to observe the 55 mile an hour speed limit and continue to practice carpooling, then there will be sufficient supplies of gasoline available for vacations. We don't want to stop people from taking their vacations. We just want them to take their vacations in a more energy efficient way.

Federal Energy Office has the responsibility to regulate the prices of oil and we are regulating those prices and we will continue to regulate the price of old oil in this country at $5.25 a barrel. Our authority runs out next February, February 1975, but until then we are going to continue to regulate prices. Our view, and I think this reflects the attitude of consumers across the country. It's a little difficult to know, but I think it's a fair assessment of the way most consumers see the situation. Very steep increases in prices, and I'm talking about increases in gasoline of somewhere between 30 and 50%. The same way with heating oil with electric utility rates going through the ceiling as a result of the high cost of crude oil has come at a very awkward time. The consumers have been asked, and properly, by the administration and by everyone else, to restrain themselves. They've been asked to delay the achievement of environmental goals.

At the time, the profits of the petroleum companies are extraordinarily high, increases over last year and over quarters of last year are pretty significant, and it gives the people in this country, I believe, a sense of concern over really how is this thing working? And I hope and believe that there will be some response on the part of the administration to these national concerns. Do you feel now, Mr. White, that the government's chief policy for discouraging consumption is rising prices, rising prices which drivers must pay for the gasoline to put in their cars, for example? It's been the absolute bedrock, starting with President Nixon, going to Mr. Stein, Secretary Schultz, Secretary Simon, and I stop right there, because we have a brand new energy administrator, and I suggest I think he is trying to look at this with the most realistic set of eyes that God ever gave to anybody, and hope springs eternal. Let's take a couple of exceptions to Mr. White's statement, Paul. In the first place, one of the most stable elements in the entire American economic scene, so far as pricing has been concerned, has been the price of gasoline.

And it's price that has risen in the last six months, has risen basically in response to the escalated demands of for our foreign imports of oil that has come in. And you can take a five-year or ten-year average, and you'll find that its price in relation to other major commodities in this country has not, that is gasoline, has not risen nearly as rapidly as others. And there's only one way in which we can go out here and solve our supply problems, and that's exploring foreign developing new reserves, and that is what these profits are going to permit your petroleum industry to do. And you have the most aggressive program going on today that we've had literally in the history of this country, and it has been triggered. So you're suggesting that the prices should continue to rise. No, I'm hoping that prices will not continue to rise. They have not risen that dramatically, although they've been painted as having risen that much.

But what I'm saying is that prices, I hope, are going to level off simply because we're finding that's true in the international oil scene. That's all dramatic. 30%. Good heavens you've had an inflationary factor in ten years of more than 30%, and that the real cost of gasoline has gone down in terms of constant dollars. I think what we're seeing here is the difficult decision process that I have to go through, where on the one hand you have the consumers of this country, naturally interested in keeping prices lower, and you have the oil industry naturally interested in earning sufficient profits so that they have the economic incentive to go out and explore for additional reserves. And so the federal energy office is really in a position of trying to balance off these different points of view. But isn't it true, Mr. Sawhill, that the rise in prices hurts the very groups which have not wasted energy, namely the poor people and the low income groups? They're the ones who are having to share most of the burden, isn't that true?

Yes, I think they do have to share significant burdens from this, and that's why we have to be particularly attentive to their problems. In the federal energy office, we established a special impact office to try to really understand what the impact of rising prices was on these very low income groups. And I must say that not only includes poorer people, but it also includes older people. And we have been working very hard to try to understand exactly what that impact is. That doesn't mean I feel that we should roll back prices to help a particular group in our society. It may be it's better to help that group through some kind of a subsidy or welfare program as opposed to interfering with the price mechanism. How much higher do you suggest if that is the approach? We better hurry up and get it in place because right now there are people who are coming right up against budget ceilings. There are many, many families in this country who make less than $8,000 a year. And when you start putting heating burdens on them and electric burdens on them and the gasoline burdens on them, together with the double digit inflation is going on with food and all other items, I think we're coming into a very difficult area.

One of the problems that has bothered me is the parent dichotomy. The administration says it's got two problems. One, an energy series of problems and the other an inflation problem. And I'll swear they come right together. And to argue, as Mr. Cole did on a national television program, the president's domestic affairs adviser, that the way we're going to get prices down and control inflation is by deregulating natural gas. Well, the price can go up and we can get more supply. Baffles me. I don't quite follow that logic. Yeah, but Lee, you can take this whole period of regulation of natural gas prices at unrealistic levels and what have you done in our society? All you've done is encourage it, burn it up philosophy in which you got something which really was totally undervalued in context with other fields. Now that has taken place. And there's a very much unanimity of obtaining that that's the case.

What we were able to do was to bring a network of pipelines across the country, which we could not have done if there were not industrial goods. And what have we turned around? We're dumping natural gas under boilers when it's too precious a fuel. It should be conserved for higher end uses. And it was all encouraged exactly. And that's because it was encouraged by instance bill would extend regulation to the interest rate market. So we won't have that. Regulations of our natural gas has been conserved has proven to be a total failure. All you've done is to put us totally into the hole in the natural gas picture. And if you're going to try and stretch a regulation of other products from your history of regulation of natural gas, all you've done is encourage waste and you have not brought on new supplies. And market mechanism is now at work in beginning to bring in new supplies. Some of those Stevenson's bill would also put the federal government in competition with the oil companies. What do you think about that? As you peel back the cover of Senator Stevenson's bill, you're going to find that it's a massive giveaway of this nation's valuable resources for the benefit of a few at the expense of many. It will not produce one more barrel of oil or one more cubic foot of natural gas.

And it will, in my opinion, certainly deter the efforts of an industry that has served this nation better than any other industry in any country in this world at the lowest cost as a people. We're one sixth of the world's population using one third, one third of its energy at one twelfth of its cost. And that's what's energy has done throughout our history. And this business of moving into increasing federal regulation of a new oil and gas corporation to go out and to take off the top is one that will be a depressant rather than encouraging new resources. If you like a contrary view, I think I can find one. Very briefly. The people in this country are very wealthy. They own enormous oil and gas deposits. And it seems to me that a portion of them ought to be developed because they are needed, not because there is a set of economic conditions and a profit motive. We have seen ourselves under this fine system trapped in a situation where we are dependent upon foreign sources because our tax laws for 25 years not only permitted but almost made a mandatory for the multinational corporation to go abroad. If you don't mind, I'd like to finish.

When the United States has to depend on other countries, I think that the president has got a point when he's talking about not being overly reviant. And if the domestic corporations won't, I think we ought to have somebody who is here looking for oil and gas because it's needed, not because it maximizes profits. I could throw in a little different point of view and that is I testified today before Senator Stevenson and basically I think that his concern is that the oil industry is not competitive. He looks out and sees these very large oil companies and he feels that there is no competition in the industry and so we get prices which do not really reflect what's going on in the marketplace. I think that the recommendation for a federal oil and gas corporation is for something that will show us what cost really are in the oil industry. I think the problem with that approach is number one, this federal oil and gas corporation would be subsidized to the tune of $50 million a year for 10 years so that's $500 million. I also have access to the choice federal lands so that leasing by the independent sector of the industry would be at a disadvantage.

I think one of the things we've got to do is really try to understand a little better, at least better than I do at this point, about the competitive nature of the industry and take steps to ensure that there is competition. When I intend to do this, I intend to practice price and allocation regulation in such a way that we do protect the independent segment of the industry and we do have that competitive force. My feeling is at this point, however, that to go all the way to create a separate government corporation would be a mistake. I saw Hill earlier when we started this discussion, Mr. Hardesty painted a bleak outlook that people are now going back to the old ways. What is the outlook for the remainder of the year? Are we faced now with more shortages? Are we going to have another real crunch as we had just a few months ago? Well, we're not going to have a crunch as we had a few months ago, but we could get into a situation where we're experiencing spot shortages around the country if we don't practice conservation. We're going to use more gas than we will have available and we may get into spot shortages. So I think the answer to your question is in the hands of the American people.

I think we can all agree on that, even if we can't all agree on the basic policies here. Thank you very much, gentlemen. So, we come down to the one thing all the experts say is essential. Indeed, the only thing on which an oil executive, a consumer advocate, and the head of the Federal Energy Office can agree. We must take steps to bring supply and demand into balance. But even more, we must make certain basic changes in the way we live to permanently conserve energy. Reli less on the automobile and more on buses and subways. Make the cars we do drive get better gas mileage. Make our homes smaller and better insulated. In short, move toward what Stuart Udall calls a revolution in values to get away from the wasteful ways of the past.

Well, I think we're wasteful because we were living in a period of super abundance and it's easy when anything is cheap and it's there not to use it in an extravagant way. But time has caught up with us. We're no longer the great oil rich nation of the world. We're rapidly becoming a Havanaugh nation. And we're entering into a period of worldwide scarcity, not only of oil but of other resources, where a thrift in efficiency and the elimination of waste, conservation become the key things that we have to do. Do you think that Americans can turn around that quickly when they've been so used to the glamour and the glitter of vigness and having whatever they wish? Well, someone said the other day that it's going to be hard to change Americans because they're not accustomed to running out of things and we're not. And self-denial will be hard, except I sensed last winter when the gas lines were long that people are willing to make changes in their lives.

If their leaders will tell them that they're in trouble and that we've got to change this country, but they haven't been told that yet. I still think there is a spirit of cooperation if we're told that we're on the edge of a big problem and things have got to change. It's good in one sense that this came along now because we're becoming soft and flabby and I think we need to change our values. We need to reassess everything we've been doing in this country. Do you think we can do it? Well, we may not have any choice, but to try, I believe in the next decade that shardages and the need for conservation are going to dominate American life. And that some leaders or leaders are just going to have to tell us the truth and lay out a program and we're going to have to carry it out. And the truth is quite simple. The embargo is over, but the crisis is not over. It is real and it is here to stay.

What may have seemed like only a bad dream to millions of Americans is now a permanent reality. We don't have enough energy to meet our needs and the frontier no longer is unlimited. Nor is there any easy answer, any sure salvation, any magic formula. All the bold talk about tapping new sources of fuel and achieving self-sufficiency by 1980 may sound good, but it can't be done no matter what the politicians may say. The cost would be too great anyway in terms of damage to our foreign policy and new harm to the environment and in the staggering federal subsidies that would be required. But what about the big profits of the oil industry? We're told they are needed to ensure new expansion of oil resources. But how do we know the money will actually go into more exploration? How can we be sure the public isn't being taken for a ride? Obviously, it's the government's responsibility to see that we're protected. But considering past experience, how can we be certain the government will protect us?

In any event, the latest government figures indicate our reserves of untapped oil and gas are much less than originally believed. And any extensive use of atomic or solar energy is too far in the future to think about. So there's no sense in deluding ourselves. We may as well acknowledge that we've been a spoiled society, used to having what we want when we want it. But now the age of abundance is giving way to the age of scarcity, and it means we must learn to conserve as well as to consume. It may seem like radical changes are called for, but actually not. What is called for are lots of relatively simple changes, which taken together can prevent more drastic changes in the future. Have we learned anything? Hopefully we have. But if we haven't, we may need those gas lines again to teach us the hard lesson that we must change because life will never be the same again. I'm Paul Duke. Good night.

Time for the show now, I'm the U.S. Amendment. But here is an ambitious now. National Trust Open Line, hello. Well, what's happening now? Everybody's getting at everybody's strokes here in the city of Nashville, the gas station, operators, and the people themselves. Look at what's happened to the prices on gasoline. You just have no way in knowing how much of that green you're going to need. Well, maybe you can blame yourself if you do not write your representative or your senator and tell him like it is. You have to keep after these people and you got to write to them quite often. Maybe once a week if it's necessary. And you've got to almost threaten them and tell them that they're not going to get your vote if they don't do something. Now, they're all making big to-dos over the oil shortage, but nobody is doing anything about it. Nobody. It'll never, never, never stop. You know, keep, keep, uh, beating the drums and, uh, laying on the line. So if our gas station would cooperate and get open and give what they can give, they wouldn't be so mean.

This program has been made possible by a grant from the Corporation for Public Broadcasting. This has been a production of Enpacked, a division of GWETA.