Energy Policy: The Fight for Decontrol
AMONG THE CHALLENGES with which Nixon and Ford administrations had to deal, none was more vexing, or potentially more momentous, than the shortage of energy resources that became critical in the fall of 1973.
The energy shortage was not entirely unanticipated. Everyone knew that supplies of oil and natural gas, upon which both industry and private households had become increasingly dependent, were not inexhaustible. Informed persons in government and industry had noted that oil production within the United States had peaked at 3.5 billion barrels in 1970, and then begun to fall. The share of American oil consumption supplied by imports had risen from 22 percent in 1968 to 29 percent in 1972. 1 Proven domestic reserves of natural gas reached their high point in 1967, and then slid into decline. 2 As early as 1965, James Schlesinger told his friend Charls Walker that the nation would soon be facing an energy crisis. 3
Yet for most Americans, the day of reckoning, if there was to be one, seemed far in the future. Oil prices increased only 10 percent from 1960 to 1970--less than the rate of inflation. Natural gas prices actually fell, chiefly because of federal regulation of the price of gas sold in interstate commerce. 4 For more than fifty years, proven reserves of oil and natural gas had usually seemed to be in danger of running down--but were always replenished by new discoveries in time to keep ahead of rising demand. Long before supplies of oil and gas were finally exhausted, the public had been led to believe, nuclear power would be harnessed to meet most energy requirements. Even