Since I started the Pickens Plan in the summer of 2008, I have reminded Americans that every President since Richard Nixon has promised to lead our country to energy independence and no one has made good on that pledge. As it happens, it was 40 years ago today, November 7, 1973, that President Nixon first called for action on an energy plan called Project Independence.
The proximate event for the speech was the OPEC oil embargo. OPEC, especially the Middle East members, wanted to influence American foreign policy with regard to Israel and used oil as the lever.
When the OPEC embargo hit, Americans began to recognize how vulnerable our dependence on foreign oil had made us. For the first time Americans understood our economy – and their ability to have easy access to gasoline – existed at the whim of countries that didn’t like us very much, and didn’t have any guilt about manipulating the American economy. For OPEC, it was all enjoyable.
In the midst of that, President Nixon said:
Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy sources.”
We landed men on the moon – and brought them back safely to Earth; we ended World War II with two blasts of atomic weapons; but 40 years later we are twice as dependent on foreign oil as we were when Nixon gave that speech.
Why? Because we never adopted a national energy policy. Instead we adopted a national military policy based principally on protecting the very oil – Middle Eastern OPEC oil – from which Nixon had pledged to release us. Instead of having an energy policy that emphasizes American resources we pay whatever OPEC demands to buy oil that we also pay to guard.
While we use the Fifth Fleet to protect all of the oil coming through the Strait of Hormuz, we only get a little over 10 percent of it. The rest goes to Europe and Asia, with the lion’s share going to China. Our petro-military policy has put us into a position where we pay all the cost of protecting oil bound for China. That’s a pretty good deal for OPEC and a great deal for China, but a terrible deal for America.
There is an old saying that the best way to boil a frog is to raise the temperature slowly. If you raise it too fast, the frog will jump out; but raise it slowly and the frog won’t be concerned until it’s too late. In the 40 years since the Nixon speech OPEC has raised the heat on us – the price of its oil – slowly enough so we haven’t noticed. Prior to the embargo the average price of gasoline was about 40 cents per gallon. When prices spiked to 50 cents per gallon during the embargo, the drain on our economy was immediate and obvious.
Today, as you are all too aware, the average price of a gallon of regular gasoline is over $3.20. That is far higher than the inflation-adjusted price of $2.58 that is the embargo-bloated price of 50 cents.
That’s only for the price of the gasoline. If we factor in the costs of the thousands of U.S. service members killed, the tens of thousands wounded and the more than $8 trillion (about half the national debt) spent in the Middle East from 1980 until today, the price we have paid to maintain our relationship with OPEC is obviously expensive, dangerous, and it isn’t working – we are paying much more per gallon of gas today than we did during the height of the embargo.
Fortunately America has the resources to answer this problem if the leadership to do something can be found:
-- With horizontal drilling and hydraulic fracturing we have gained access to huge amounts of domestic oil and natural gas. Let’s use it everywhere we can – power generation, transportation, manufacturing. Sure, let’s allow exports of domestic natural gas, but also demand our policymakers put a premium on creating domestic demand and improving our economy on the backs of our cheap energy, not other nations’ economies.
-- If we add Mexico and Canada into a North American Energy Alliance and build the Keystone XL pipeline, our need for Middle Eastern oil will be minimized – perhaps eliminated.
-- We should use the Strategic Petroleum Reserve (SPR) as a truly strategic resource and reduce our dependence on OPEC oil immediately while generating income to help pay for advancement of alternative sources of energy.
-- Reforming outdated and misguided state tax rules and regulations will help eliminate barriers to alternative transportation fuels and create competition in the fuel marketplace.
We have the resources to reach the goal set by Richard Nixon and the six Presidents who have followed him: An America freed from the costs of protecting oil we don’t need or want, by utilizing our own, domestic energy resources.
Everyone commits to the goal. We need leadership to commit to making it happen. And we need to hold them accountable.
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