(00:00:00) the most appalling thing to me about the whole energy problem. And the reason that this is certified not just as a small as a short time shortage, but as a permanent problem the biggest problem, I believe that has loomed before the American people short of a major war in my lifetime. Is this problem? It is my thesis that it is a very big problem that there is no easy way out that the only way that we can cope with it is to make some very basic changes in our society changes that will dictate where we live and what kind of automobiles if automobiles at all that we own and drive the design of our houses our cities the whole business very broad basic structural changes because there are no there are no easy solutions. The appalling thing though is how little we have done in the last five and a half years come October. It will be the sixth anniversary. of the Arab embargo the sixth anniversary of OPEC because we allowed them to do it gaining the power and influence to have a cartel that worked. What has the United States of America done in those six years. Essentially what we've done is that we've squandered the time. We haven't made any basic decisions we quarreled with each other. The Congress is dawdled presidents have made recommendations and presidents haven't provided very vigorous or sustained or coherent leadership. The American people have argued. The thing that is most mind-blowing of all is that some national polls still show the 65% of the people believed that the energy crisis our energy problem is a hoax neither of us who are here today believe that We may have differing beliefs about how serious it is or how we cope with it. But this is a this is a real problem, but we have this tendency and I guess it's deep-seated in. In our country or the kind of society and civilization we produced, you know, I was talking to man the other day and he said well, he said I don't believe it's necessarily. The oil companies I don't I just trust the oil companies. I don't think we can believe them and I think they're manipulating the situation. But if you say they're not the big part of the problem. He said I still can't believe it. What he said how and why would we have built a system of interstate highways that is the greatest engineering project in history. Why would we have committed our country to the idea that we can all own Automobiles and that this will be our transportation system. Why would we have done something like that? If we didn't have the energy that was needed to make such a system work. He said I can't believe we do anything that stupid. Well that's one approach of logic to take to it. But the message that I have to you is that we did do a very stupid thing and I was there in the beginning present at the creation as they say walked in as a freshman Congressman in 1955 and voted for the interstate highway system. And there was not a single discussion not a word in the debate. I went back to look ahead. A while back about whether we would have enough energy. There was simply the Assumption then or several assumptions that were wildly wrong one was that we had another hundred years of oil. We were just in the infancy of the petroleum age another much more important and much more wrongheaded assumption now in terms of where we are, is that well, We are so skillful and so smart and so able to manipulate technology that if we run out of oil will create a substitute. That's what many of the economists and others were saying six years ago at the time of the Arab embargo. Well, so there this cartel is checking the price up will show them will produce natural gas from coal will produce the oil shale out in Colorado. We will develop synthetic fuels and in a few years will will show them. There isn't a single synthetic fuel plant in the United States today after 6 years Congress is now hastily passing because they want you to believe that they're doing something. A synthetic fuels Bill and even if they pass it and even if its success it won't help produce a drop of new energy for five or six or maybe 10 years. This is the kind of dream world that that we have been living in we've been living in the kind of dream world where some people would say There is no real shortage. It's the oil companies manipulating. They've got some ships waiting out there and they're waiting for the prices to go up people like to believe that It's night. It's it gives you an easy out. And so way of waving off the problem. We just straighten the oil companies up the the the problem would go away. It's nice and convenient. And so and so some people want to believe that others. Want to believe that an oilman the oilman have misled Us by creating this idea. How many times have you heard if we just decontrol they'll go out and they will find more oil and gas. They're out there. They're searching they're drilling more oil wells now than at any time in history except for a short period in the 1950s. They're finding small pools. They're digging in the bottom of the barrel. We're running out of oil and that's what it certifies. There is no production solution. But we've been saying for the last five years that there was a production solution. Again, a great mistake a great miscalculation that has been made. We've also had the idea as I mentioned a moment ago that there was a technological solution some easy way out. It's rather mind-blowing that until rather recently for a lot of people the solution was nuclear power. And nuclear power would provide us with maybe hydrogen to replace natural gas or it would provide the cheap energy for other synthetics and now a great question mark and a great Cloud hangs over nuclear power and should hang there. It's a problem industry. It's a problem where we haven't resolved the issues that must be resolved. And so we rock along we rock along from month to month and from crisis to crisis and now we find we have no control. Over our lives and we're disturbed by that and the people sit in gas lines. frustrated and angry and some of them are getting in fist fights and isn't this an incredible display in a great and powerful country such as ours but to all of these things suggest that's what I'm saying to you all of them suggest and imply in the strongest possible way that this is what I said earlier a big problem a long-term problem with no easy solutions. As a matter of fact, the only thing we can do in the short run other than to do what we've been doing in the last six years, which is to solve the problem by buying more oil and importing more oil. The petroleum realities of the last six years are these let me summarize it for you in a nutshell we have been using. We have been using twice as much oil and natural gas roughly as we're finding. That's the pattern. That's the long-term pattern. We're in the declining phase of what we should call our petroleum age. That is a reality. So what have we been doing as our own supplies decline? Well, we had one little blip we brought the Alaska oil. That's the largest field ever discovered in North America. We brought that online that helped us last year. Our Imports went down. That's the only year that that happened now, they're going back up again because we're running out so It's almost as though every month the Secretary of Energy and the Secretary of the Treasury went to the present United States and they said our oil production is going down. We've got to have more crude oil. Mr. President. We're going to have to import more from abroad we're going to have to pay more for it. And the President says well, we have to have that to protect our economy and protect our lives got style. We'll have to bring it in and the Secretary of Treasury says but we can't really afford it and he says print more money pay print more money and pay for them with a dollar the United States of America has been behaving in the last few years. Just like the city of New York did and didn't we laughs at New York they were living beyond their means they were borrowing on the future to pay for their present operating costs. That's what we're doing. That's the reason the dollar is going to be in serious trouble again, that's the reason the power and economic strength of our country is being drained away by this crisis. Oh, yes, it's real. It's very big. And we're going to have a recession in this country and a worldwide recession probably. And so so here we are in the soup. But still arguing among ourselves whether this is some little problem that involves manipulation by an industry or whether it's a problem that will require us to make some very big and basic changes in our lives. Now. I have a whole lecture and this is an area to where I think dr. Martell and I have a lot of agreement and we can get into that at question time about all what Wes what must we do what are the changes that all of us must make will save that until later but it is fact I believe and I think the events of yesterday certify stronger than anything that I could say or any logic or any facts that I could arrayed before you we are at the mercy. For the first time in the history of the United States. All events over which we have no control over countries, which can make decisions that will push us into a recession. That will affect our whole economic future and we have no control and we're doing nothing about it. Now. That's that's a rather appalling an extraordinary thing Richard Nixon for whatever else one may say about him and he was president when the Embargo hit and he had a plan. And one part of that plan was essentially, correct. He said we ought to move away from dependence and move in the direction of self-sufficiency and he called his plan project independent. And he said that we were going to do all these things go back and read his speech if you want to study how stupid and incredible. Our performance has been the by 1980 we would be independent. From an energy point of view from the OPEC cartel and we could go tell them to jump in the lake. We're coming up on 1980 and as I've said and pointed out, we're not becoming more independent. We're becoming more dependent everyday and in 1972. We paid two or three billion dollars was the price of imported oil and next year. It will be in the 60 to 70 billion dollar range. No wonder no wonder we're in trouble and think think of the drain of that wealth. What what could we do with that wealth? Fifty or sixty billion dollars within our own country in making some of the changes that we're going to talking about talking about later in producing new jobs and making the kind of structural improvements and alterations that would get us in the direction of this new Energy System. We've got to develop this is this is only part of the problem. So we are again to use a Nixon phrase a pitiful helpless Giant. Even a stupid pitiful helpless giant refusing to respond. To a crisis that is an economic crisis and a political crisis and a human crisis. Thank you Stewart Udall environmentalist author and former Secretary of the Interior next Leon Martell Executive Vice President of the Hudson Institute speaks in opposition to the debates resolution, which is there is an energy crisis in the United States. Ladies and gentlemen. Let me Begin by setting forth for propositions about energy in the United States today. And then in the remaining time offer you some evidence in support of these propositions. The proposition one addressing and perhaps in a sense interpreting. The statement of the resolution of the debate is simply that there is no shortage of energy in the United States today if in the if is very important if we choose to develop the supplies that we have for our supplies are abundant. Proposition 2 is also rather obvious is that there is an energy problem in the United States and that energy problem is due to the fact that we import from foreign sources one half of the energy that supplies one half of our energy needs. In other words a quarter of our total energy supplies are imported and so they are subject to the whims and Caprices of others to their higher prices as we learned from Geneva within the last few hours to their being cut off and it is this dependence that has magnified our problem. And it is this dependence which is put us into our present difficulties, which began as you recall with the immediate and radical cut back in oil supplies from our second largest foreign support supplier the country of Iran last winter. proposition 3 is that there could be a genuine crisis tomorrow. It would only be a petroleum crisis. Other fuels are not threatened with exhaustion within an economically rev relevant time Horizons and yet this would be a very serious crisis even though it would just petroleum because petroleum provides half of our energy needs today. And finally proposition for is that there need not be a crisis? That our long-term energy Supply is assured and that with appropriate public policy are short-term. Supply can also be assured as well. Let me briefly say just a few words about the long-term Supply and then I'll spend a little bit more time on any evidence supporting these propositions regarding the short-term Supply. As I said our long-term Supply is assured and we project in our studies that Hudson Institute that by the middle of the 21st Century. Perhaps even sooner we will have coming online Eternal sources of energy. Sources that never run out the sources that mean an effect that the problem is solved and it's all for all time. We're home free and it may very well be that future Generations will look back with barely concealed amusement at our concern during these decades for energy crisis. They'll wonder what all the shouting was about. These long-term sources will be some combination of the two natural sources of solar and geothermal and the man-made source of fusion nuclear fusion, the combining of Adam's not fission, they're splitting which of these three solar geothermal effusion comes first, which is the most important which is the leading source is unknown now because this will depend on progress that has made in research and development in these sources and it will depend of course on Capital cost of installation required to produce energy from them. But they are coming and when they come online energy essentially is free and free forever. The difficulty, of course the difficulty that we recognize today difficulty that puts us in the problem that I mentioned before is the short term is getting from the here. Of dependence on fossil fuels particular hydrocarbons to the their of Eternal sources, but we believe that an appropriate strategy should have two major elements to it. The first element is to increase the production of oil and natural gas and we have to do that for the very simple reason that represents 75% of our energy needs today and that goes into an infrastructure that is based on those sources. You can't rip it apart and run it by Solon. You can't put the sun you can put geothermal. You can't put fusion into your car today tomorrow or any foreseeable time in the near future. And so we must then is the first element in that solution increased production of oil and natural gas and as I'll explain in a moment we have the resources to do so And secondly, we must use presently available alternative sources. When they're safe and economical to do so. You let me say a few words about increasing our oil and natural gas. We do that two ways first. We look to enlarging our conventional sources of oil and natural gas and we do that by continuing to promote and if necessary through government assistance incentives, and so forth support exploration in offshore areas and other remote areas. Now the United States has been well explored and well drilled for oil and natural gas. And so we have to look beyond our own borders our own Shores and encourage and assist the developing nations, which are largely unexplored and unexploited in their conventional sources to do the same in return to be the markets for their produce. And secondly, we must enhance recovery in the areas that we've already discovered and developed historically only 30 percent of the oil is taken on the average from a well the rest of it remains in the ground remains in the ground because it's too costly to recover it that higher prices that recovery becomes possible enhanced recovery. It's called and so we must increase our efforts in that area to get at least another half out of those Wells that are lying and non-producing the day. We also have to develop unconventional sources of oil and natural gas because the conventional sources will not give us enough. Unconventional natural gas is available in several important sources in the United States. The Geo pressurized zones in the Gulf of Mexico the tight Sands of the western states devonian Shale in Appalachia and the coal seams of coal mines, perhaps we have 200 times in those sources are current proven reserves of natural gas a considerable Source unconventional oil is also available from Shale from oil shale the US Geological Survey has estimated there might be some two trillion barrels of oil available from Shale and that's compared to the proven reserves in the United States of 30 billion barrels of conventional oil. And also we must seek oil from coal through coal liquefaction. They are almost a trillion barrels exist. Depending how much is used for gasification making gas out of it and for other purposes. So the oil is there the problem of course is the cost. This is an area then. With the government must step in as the only candidate to develop these sources and the Congress and it's rather fitful way is mr. Udall referred a few moments ago is finally being recognized this we have a Spate of bills now all dealing with synthetic synthetic production. But if the president went before this country and the world and said look, I've got a program that's going to ensure us supplies of oil and natural gas throughout this transition period to Eternal sources and said here's my program. I'm going to start with pilot plants and they're going to improve the technology and lower the cost of production and I'm going to follow that with demonstration plants which are going to provide small-scale production still not economically feasible, but some production and then I'm going to make plans just plans for large commercial plants for the 1990s, and I'm so sure this program that I will write a contract now with any consuming nation was Japan with Germany with France within consuming Nation for delivery in the 1990s at prices that will be guaranteed. That's the extent that more conventional oil and natural gas becomes available. What are the extent that demand low is more rapidly than we project because it become more efficient to that extent. We could have a smallest and thetic fuel industry in the 1990s. If not, we can turn up that since synthetic fuel industry and more fully Implement our plans now announcing a program like that to the nations of the world. And that were prepared even to sign long-term contracts in the basis of this activity. Would be a startling demonstration to the oil-producing Nations and it would give courage to the all-consuming Nations. He would show OPEC and the other nations that there's a downside risk to the price of oil that a barrel of oil in the ground is not the best bank in the world. The second element of that short-term strategy and the supply side is to look to presently available alternative sources when it is economic economical and safe to do so and the only presently available ones of sufficient scale at this time. There are a lot of small sources that can contribute but the only alternative sources at the present time the sufficient scale to help us with this problem our coal and nuclear fission. So let's take a minute to look at each of those. Coal supplies 18 percent of our energy. We have a trillion and a half short tons of it in the United States enough literally the last centuries and the president and others have called for it's much greater use. But as we know there are problems in using it it is labor-intensive to extract it. And so it is costly it is also hazardous to mine coal still is a lot we can do with it for under the boiler. Use that is to produce hot water to make Steam to make look electricity. It's probably The most efficient fuel we have it's less wasteful than oil and natural gas and by using more low sulfur coal now, which is abundant in the west and scrubbing developing the technology for scrubbing high-sulfur coal further as well as using fluidized beds and other techniques to remove Ash and particular dates. We can remove or reduce any way many of the environmental consequences of burning it, but the greatest future I've already indicated the greatest future for coal is probably its liquefaction and gasification to provide those more flexible fuels of oil and natural gas. And finally, what about nuclear fission? Now there are now 70 nuclear power plants in the United States and they Supply about three percent of our energy. By the end of the century with the plants that are now in the construction and the plans for which firm orders exist. We could probably have a four-fold 425 fold increase in energy from nuclear fission about 12 to 15 percent of our energy sources are almost 40 percent of our electricity here in the in the district that NSP District the nuclear power plants that you have the three units supply of present 43 percent of the energy needs of the Minnesota Dakotas and Western, Wisconsin area. Yet as mr. Udall has already hinted has already explained. It is a dangerous technology. It is a technology as we've seen just very recently in Harrisburg fraught with problems as a result few new plants will be built but just become too expensive to build in terms of the safety factors the regulatory time involved and so forth those that are built on are presently under construction will undoubtedly be completed but they will be increasingly expensive. So this does not become an attractive alternative in the future. Although it is definitely part of that transition from fossil fuels to Eternal fuels and the plants that are built will not be dismantled in other countries that will be an even more important source of energy. And so for all of those reasons, then at least to understand it it kind of bought ourselves a Faustian bargain here. We must stay in the business. We must stay in research and development. We must stay in the nuclear industry in this country. so regarding the short-term argument then the position here is that we'll the adequate development of hydrocarbons conventional and unconventional and The Prudent use of alternative sources coal and nuclear. We can have sufficient energy for the transition to the long term the era of dependence on Eternal sources, Leon Martin gets an Institute following the two speakers talks time was provided for cross-questioning first Stewart Udall is question of Martel. Leon aye the first question I want to ask you because here we are today with the shocking events of recent weeks with the sudden shock of yesterday not sudden. It's been there on the horizon. How can you say the short term is assured? When there's no evidence coming out of Washington that the government's going to act to do anything in the short-term. Okay. Well the short term candy should because the supplies are there. My argument is that it isn't a physical limit that we're facing. It's really a political limit. It's an inability to recognize that we have available sources and that with appropriate public policy programs. We can exploit those sources if the source is weren't there. If we really were dealing with a genuine shortage if they were absolute physical limits than obviously nothing could be done to solve the problem. But the fact is that the supplies are available if we Institute the public policy programs to carry them out and to provide them to us and that's the point. Dr. Martell, it's your turn to direct a question to mr. Udall. Let's do it. We share the same revulsion about being no more than puppets 220 pack into the oil produces the events of last night Illustrated, but I wonder what specifically you right might recommend to let us cut the strings those puppets in the standalone. Well in the in the present predicament that were in our choices are we've allowed the choices to be narrowed. We allowed ourselves to be put in a corner where we don't have very good choices. some have suggested in some days I tend to Lean towards this that in order to shock us into conservation and into making changes that we have a very stiff tax on crude oil and really raise the price of everything to force us to deal with the real world. But this obviously would have economic implications it obviously would hit poor and middle-income people harder, you know, anywhere you look the decisions are the choices are not good the second alternative which you're going to hear more talk about is rationing. You know if we're in a situation as we are right now with gasoline, whether it's not enough to go around in a democracy. What is the best and fairest and most workable way to solve the problem? We're doing it now by what is called rationing by inconvenience people getting up in where I live and as my wife did the other morning. I don't know why I didn't she let me off the hook at six o'clock and sitting in a gas line for an hour wasting valuable time wasting energy doing it. Maybe we ought to try rationing it certainly rationing would send a message. To all of us it would force us to look at our own lives in a way. We're not doing now and say, alright, here's here's our ration. How do I make it work? How do we make it work? And maybe this is the kind of shock treatment we need but this doesn't look like this is very likely because Congress just voted down a stand by rationing plan that the president had Congress doesn't want rationing. It doesn't want to tax. It doesn't want to do anything quite frankly and that's that's one of the reasons that I'm dismayed.