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Jimmy Carter’s Response to the Energy Crisis
Attempted to inspire conservation by personal example
Carter tried to promote conservation by example, turning down the thermostats at the White House and in other
government buildings, wearing cardigan sweaters, and installing solar panels and a woodstove at the White House. He
also deregulated energy prices, launched a program to develop synthetic fuels, and successfully legislated fuel-efficiency
standards.
Source: Obama`s Challenge, by Robert Kuttner, p. 56 , Aug 25, 2008
Pushed alternative energy program to fight oil shortage
Carter faced a drastic erosion of the value of the US dollar and a persistent trade deficit, much of it a result of US
dependence on foreign oil. The president warned that Americans were wasting too much energy, that domestic supplies of
oil and natural gas were running out, and that foreign supplies of petroleum were subject to embargoes by the producing
nations, principally by members of OPEC. In mid-1979, in the wake of widespread shortages of gasoline, Carter advanced
a long-term program designed to solve the energy problem. He proposed a limit on imported oil, gradual price decontrol
on domestically produced oil, a stringent program of conservation, and development of alternative sources of energy such
as solar, nuclear, and geothermal power, oil and gas from shale and coal, and synthetic fuels.
Source: Grolier’s Encyclopedia, “The Presidency” , Dec 25, 2000
Passed energy policy of some decontrol & some regulation
The total energy package pushed by Carter in 1978 was extremely complicated, but far-reaching in its beneficial effect on
our nation. The production of gas-guzzling automobiles would be deterred by heavy penalties; electric utility companies
could no longer encourage waste of energy with their distorted rate structures and would have to join in a common effort
to better insulate buildings; higher efficiency of home appliances would be required; gasohol production and carpooling
were promoted with tax incentives; coal production & use were stimulated, along with the use of pollution-control
devices; and the carefully phased decontrol of natural -gas prices would bring predictability to the market, increase
exploration for new supplies, & reduce waste of this clean-burning fuel. The new bills also included strong
encouragement for solar-power development, and tax incentives for the installation of solar units in homes and other
buildings. These and many more provisions now became the law of the land.
Source: Keeping Faith, by Jimmy Carter, p.107 , Oct 15, 1978
Proposed Energy Dept. to share sacrifices of rising prices
The proposal by the oil and gas industry for solving our energy shortage was simple: remove all laws and regulations.
[But that] would allow OPEC to control both the international market and our domestic oil prices.
We realized that our domestic prices would have to rise in order to stimulate American
production and encourage conservation, but the increase needed to be brought about in a
predictable & orderly fashion. Also, the unearned profits from higher prices needed to be shared
with the consuming public. Even with such protection, some sacrifices among the people would
be required, making it doubly important that our proposed plan be fair.
On March 1st, I sent to Congress our proposal for the new Department of Energy. It was like
pulling teeth to convince the people of America that we had a serious problem in the face of
apparently plentiful supplies, or that they should be willing to make some sacrifices or change
their habits to meet a challenge which, for the moment, was not evident.
Source: Keeping Faith, by Jimmy Carter, p. 94-97 , Apr 18, 1977
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National Energy Act of 1978 (excerpt)
B. STRATEGY
1. The objectives of the National Energy Plan are:
a. In the short term, to reduce dependence on foreign oil and to limit supply disruptions.
b. In the medium term, to weather the eventual decline in the availability of world oil supplies caused by
capacity limitations.
c. In the long term, to develop renewable and essentially inexhaustible sources of energy for sustained
economic growth,
2. The major strategies for reaching these objectives are:
a. Implementation of an effective conservation program for all sectors of energy use so as to reduce the rate of
demand growth to less than 2 percent, thereby helping to achieve both the short- and medium-term goals.
b. The conversion of industry and utilities using oil and natural gas to coal and other more abundant fuels to
reduce imports and make natural gas more widely available for household use, thereby helping to achieve both
the short- and medium-term goals.
c. A vigorous research and development program to provide renewable and essentially inexhaustible resources
to meet United States energy needs in the next century, thereby helping to achieve the long-term goal.
New Policies/Changing ideas under Carter
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Oil price decontrol became a central policy issue
A major debate was born, should the government control production and consumption or should the market
forces take over?
Carter administration takes a new perspective and emphasizes deregulation of the energy industry
Carter moved the nation to a greater understanding of energy problems
But foreign dependency on oil was still increasing, domestic production decreasing, and fuel costs were still high
1974 (after Nixon resigned) Congress passed the Geothermal Energy Research, Development and Demonstration
Act , as well as the Solar Heating and Cooling Demonstration Act
Carter also passed the Solar Energy Research, Development, and Demonstration Act and Federal Non-Nuclear
Energy Research and Development Act
National Energy Act was passed in 1978, including conservation incentives and taxes, and limits for the use of oil
and gas in electrical generation
Natural Gas Policy Act passed soon after, giving the government a stronger role in regulation, and also raising
prices of natural gas
Department of Energy created in 1977 to bring cabinet-level order to divided efforts
Carter suggests less driving, and less use of heat
Carter also called for a tax to help subsidize mass transit, and support energy assistance funds (Windfall Tax Act
of 1980)