At an RFF seminar on October 5, 2016, panelists took up The Energy Crisis of the 1970s: Looking Back, Looking Ahead. The event featured the recently published book Panic at the Pump: The Energy Crisis and the Transformation of American Politics in the 1970s, by Princeton historian Meg Jacobs, who spoke at the seminar. In addition to a panel discussion of energy security and policy for research and development, RFF Senior Fellow Joel Darmstadter spoke to how the energy crisis of the 1970s spurred greater consideration of environmental challenges. A slightly edited version of his remarks follows.
The overriding focus at this seminar is the oil price shock and its political reverberations in the 1970s. It’s a story that, in her book, Meg Jacobs has admirably captured in both its substantive and colorful aspects.
But what I’d like to briefly pursue as well, is the extent to which an important, if secondary, turn of events—one that antedated, paralleled, and interacted with the energy crisis of the period—deserves to be recalled. I’m talking about a steadily growing environmental movement that expanded as tension mounted between the natural resource requirements of a growing economy and, concurrently, the urgency of pursuing an ecologically sustainable world order.
It’s worth recalling that a number of environmental concerns and policy initiatives had taken root some years well before the 1973–1974 Arab oil embargo:
- Rachel Carson’s Silent Spring appeared in 1962.
- The National Environmental Policy Act (NEPA) and the creation of the Council on Environmental Quality and the Environmental Protection Agency date from 1969. Provisions of NEPA enabled petitioners, in 1972, to successfully compel the (then) Atomic Energy Commission to apply that law to allow construction and operation of the Calvert Cliffs nuclear power plant.
- The Environment Quality Improvement Act and major amendments to the Clean Air Act of 1963 were adopted in 1970. The latter, in particular, led to major regulatory programs, though some (such as the banning of leaded gas) had to wait a couple of decades before implementation.
- Also in 1970, Earth Day made its inaugural appearance.
- I might also mention, with a touch of reflected glory, how, on the international scene, our late RFF colleague Hans Landsberg served as an advisor to the Secretary General of the 1972 Stockholm Conference on the Human Environment, one of the early international gatherings embracing that theme.
Further fortifying these legislative and institutional developments, the 1972 publication of Limits to Growth marked a concurrent analytical and intellectual effort. This work was destined to provoke intense debate for years to come over the core argument—that the major threat to humanity’s well-being was unchecked population and economic growth, which, in turn, meant a steadily encroaching impact on the finite capacity of the planet. A 2002 update of the study considered growing physical resource depletion and environmental degradation to be even more serious than assessed 30 years earlier.
In short, this list of landmarks, with its alphabet soup of institutions and laws, provides an instructive backdrop to the ensuing 1970s energy turmoil as it gave environmental interests an opening to press for a twofold set of concerns.
First, the fact that rising dependence on imported oil and sharp increases in oil prices were, in a major way, the result of rising US oil demand allowed a growing and vocal body of conservation-oriented voices—some coming from a technological base, others with more of a political bent—to make the case for realizing the substantial potential of cost-effective reductions in energy use. (Perhaps the most visible embodiment of energy-saving potentials being heard at that time, and since, was Amory Lovins.)
As I’ll elaborate momentarily, a second, more long-term (but quite visceral) bone of contention concerned the likelihood and worrying signs of, in effect, “running out”—the physical exhaustion of natural resources that, as argued in Limits to Growth, was perilous for society to ignore.
And, incidentally, this specter of depletion went beyond the separable notion of geologic deposits rendered worthless because of unacceptable environmental implications. In the case of coal, for example, the argument to leave the stuff in the ground, given downstream regulatory constraints on combustion gas emissions, would make the exhaustion issue moot.
No, the debate about peak oil or peak this-or-that strove for a somewhat more sophisticated level of discourse, providing yet one more opportunity to recall the legendary bet between biologist Paul Ehrlich and economist Julian Simon—Ehrlich, with a notable Malthusian predilection; Simon, with an unambiguous Panglossian perspective. In 1980, the two agreed to test the hypothesis that evidence of growing scarcity or abundance could be coaxed from trends in the real price of natural resource commodities over an extended period of time. With the composite value of five minerals standardized at $1,000 in 1980, the excess over that amount in 1990 would compel the loser (if Simon) to pay the winner (Ehrlich) the overage. With a total of under $1,000, the respective winner-loser roles would be reversed. With the 1990 total coming to $433, Ehrlich owed and paid Simon $567. (The commodities in question were copper, chromium, nickel, tin, and tungsten.)
A bit of comic relief on a somber issue? No question. But a significant outcome? Unclear. Consider just a few pertinent caveats. Other (and longer) time intervals could produce different, and maybe contrary, outcomes. Environmental externalities did not figure into the calculation. Were technological advances in resource recovery unique to these commodities? And, of particular importance, how might the inclusion of energy resources have tilted the betting outcome?
Indeed, around the same time, the applicability of “peak supply” to energy had its own day in court. It involved an episode from which multiple parties emerged red-faced. A 1979 RFF volume entitled Energy in America’s Future contained a table showing a time series of (inflation-adjusted) energy prices. For just calendar year 1972, the electricity column recorded—as it turned out, mistakenly—a one-year double-digit price increase of nearly 20 percent. This prompted four distinguished Stanford and Berkeley scientists (Ehrlich among them) to argue in a 1980 letter published in Science magazine that such escalation, preceding the 1973–1974 world oil-price explosion, was, in effect, a significant harbinger of growing scarcity.
What an errant decimal-point can provoke! A second printing of the RFF book reduced the offending entry to less than 2 percent (and, one trusts, prompted a less alarming interpretation). The numerical error was also noted in the same issue of Science (in a letter solicited from, of all people, Julian Simon). Two lessons: foresight, however enlightening, shouldn’t cloud empirical logic; and the importance of skillful editing can’t be overstated.
Do I suggest that visions of a beleaguered world of scarcity and misery recede with the horizon? I do not. Still, these examples point up a persistent and blurred picture of the depletion issue—one that deserves careful scholarship. But irrespective of whether resources are running out, my time here has.
