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The original documents are located in Box 13, folder "Energy - Congressional Program" of
the John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 13 of the John Marsh Files at the Gerald R. Ford Presidential Library
The
Congressional Program
Of
ECONOMIC RECOVERY
&
ENERGY SUFFICIENCY
February
1975
It has been only in times of war and during periods of great economic
depression that American citizens have confronted national problems as
urgent and critical as those presented by today's rapidly deteriorating
economy and the potential threat to the Nation's supply of energy.
In recognition of the immense importance of these issues and realiz-
ing their interrelationship, the Democratic Policy and Steering Com-
mittee of the House of Representatives and the Democratic Policy
Committee of the U.S. Senate were directed by the Congressional Ma-
jority Leadership to prepare for recommendation a comprehensive pro-
posal designed both to insure rapid and continued economic recovery and
growth while providing national energy sufficiency.
The Senate Committee chaired by Senator John O. Pastore working
jointly with the Task Force of the House Committee under the leadership
of Congressman Jim Wright have submitted recommendations for leg-
islative consideration designed to meet the Nation's economic and energy
needs. We commend Senator Pastore and Congressman Wright. We
commend their respective Committees for their diligent and productive
endeavors.
The 94th Congress will enact a program of action which will serve
the Nation well both now and in the years to come.
MIKE MANSFIELD,
CARL ALBERT,
Majority Leader of the Senate.
Speaker of the House.
THE ECONOMY AND ENERGY
A CONGRESSIONAL PROGRAM OF ACTION
The comprehensive Congressional program on the economy and
energy has the following objectives:
First:
To restore in the shortest period of time a healthy economy
with full employment, reduced inflation and increased out-
put and productivity.
Second: To prevent steep increases in the price of all energy and
the pervasive economic adversities which such increases
surely would entail.
Third: To manage energy supply in the near term so as to reduce
import dependence steadily and surely consistent with
rapid economic recovery, providing standby protections
against sudden supply curtailments.
Fourth: To expedite and mandate programs to conserve energy and
expand domestic supply in order to improve our balance
of payments and achieve national energy sufficiency in a
timely and reliable way.
The nation faces two very basic problems-the rapidly declining
economy, and the predictability of future energy shortages. They are
distinct but inextricably interrelated. The first is an immediate problem
of crisis dimensions and must be treated as such. The second is of necessity
a long-range problem which will yield only to effective long-range solu-
tions. Both must be solved, and it is our purpose to set forth on behalf of
the Congressional majority a definitive program of action to address both
problems.
The most urgent national need is to revive the nation's economy and
put Americans back to work. On January 14, the Democratic Steering and
Policy Committee of the House announced a 14-point program of action.
On February 18, the Democratic Policy Committee of the Senate and the
Chairmen of the Standing Legislative Committees of the Senate endorsed
a comprehensive economic/energy program formulated by an Ad Hoc
Committee of the Democratic Policy Committee. Many of the economic
initiatives recommended in these programs already are in the process of
legislative implementation. Fully embracing the thrust of those programs,
1
we reject President Ford's 5 percent ceiling on social security and call for
we believe it is practical, equitable and economically responsible to
the accelerated payment of benefits by the full 8.7 percent effective Janu-
achieve most of our immediate reduction in petroleum consumption in
ary 1, 1975. We recommend several additional economic initiatives as well
the other 58%, but recognize that savings can be achieved in all cate-
as a carefully coordinated program of action for energy sufficiency.
gories of usage. We propose accomplishing this by:
Faced with the worst economic recession and the highest unemploy-
(1) A combination of graduating excise taxes and rebates on new
ment levels since the great depression, we believe that a panic energy pro-
car sales, specifically geared to the fuel efficiency of the model
gram which interfered with the priority task of economic recovery would
purchased.
be a severe public disservice. The plan recommended by the President
(2) Mandatory mileage performance standards for new automo-
would needlessly and massively depress the economy further, add to the
biles.
cost of living for all Americans and place highly inequitable cost burdens
If these and other conservation initiatives included in this program do
upon such basic necessities as home heating, food production and clothing.
not achieve diminution in imports, standby authority should be invoked
We reject the fundamental premise of the President's program that
to:
the only way to achieve energy conservation is deliberately to raise the
(3) Require Sunday closings, allocations down to the service
price of all petroleum products to all American consumers by heavy indis-
station level, and controls on the use of credit cards to buy
criminate additions in taxation. The $3 per barrel tariff on oil imports will
gasoline.
not reduce imports; it simply will make them more costly to American
(4) Impose import quotas.
consumers. It would add some $7.6 billion a year to the cost of living.
(Note: a mere five percent reduction in the total number of miles driven would
Adding at least $30 billion in taxes and costs on domestic oil & gas con-
save almost 350,000 bbls of oil per day; a 10 percent reduction would save nearly
700,000 bbls.
sumption proposed by the Administration would further burden the econ-
(Encouraging only one-fourth of America's drivers into cars that get just two
omy with such weighty impediments that any effort at economic recovery
miles per gallon better mileage would save an additional 230,000 bbls per day.
When one-third of the driving population can be accommodated in vehicles that
would be hopelessly foredoomed.
yield better efficiency by just 3 miles per gallon, the additional saving will be 470,000
The President's budget acknowledges the probable results of the
bbls per day.)
Administration program: yet another year of raging double-digit in-
Our program will achieve energy conservation not only in the
flation, another year of declining economic output, and at least another
transportation sector, but also in the residential, industrial and com-
full year of unemployment in the range of 8 percent. This is a pros-
mercial sectors where longer-range savings are both achievable and
pect which America's families should not be asked to accept. We be-
quantifiable. We prescribe realistic standards in each sector. Funda-
lieve the country can do much better than this, and we are determined
mentally, we seek to reduce consumption by the elimination of waste-
that it shall.
not by the elevation of price.
The Congressional economic program recommends fiscal and
Savings in energy of almost 500,000 bbls of oil or its equivalent per
monetary actions at the Federal level that will create over 1½ million
day will result by 1980 from our recommendations to assist families and
more jobs by the end of 1976 than the President's program, while
businesses in insulating homes and other buildings and making other
reducing the inflation rate by over 2%.
energy-related improvements.
The comprehensive energy conservation and development pro-
One key feature provides incentives to expedite conversion of
gram which we recommend for immediate adoption will be demon-
electric power generating and other industrial plants from petroleum
strably less inflationary, stimulative to the economy, more selective in
and natural gas to coal. This is the second largest area of wasteful
the areas of use to which we must look for major conservation, and
petroleum usage, and while it is more difficult to hypothecate a precise
more quantifiable in its results than the plan set forth by the President.
saving without knowing how rapidly such plants can be induced to
It is fairer and more equitable to the American consumer. And it
make the conversions, we believe it is not unrealistic to anticipate
creates a specific mechanism to help finance an earlier realization of
additional savings from this source after the second year in the
reliable alternate energy sources for the future.
vicinity of 400,000 bbls daily in BTU equivalent.
Motor fuel accounts for about 40% of the nation's present petro-
A saving of 160,000 bbls a day can result from strict local
leum usage. Since only 42% of this amount is directly work-related,
enforcement of the 55-mile-per-hour speed limit. Other conservation
initiatives contained in this program will produce additional savings.
2
BERALO 3 FORD LIBRARY
47-351 75 2
The Congressional program also creates a strategic oil reserve and
sets up a National Energy Production Board with authority to recom-
mend import quotas, allocations and even rationing in event of
emergency.
In all, we believe that our program will reduce domestic con-
sumption of imported petroleum, at a very conservative estimate, by
THE ECONOMY
the equivalent of 500,000 bbls of oil per day in the first year, by 1.6
million bbls per day in the second year, and by more than 5 million
bbls per day by 1980. Considerably more dramatic savings can be
TARGET:
achieved in years to come.
We have seen no reliable data whatever to support a conclusion
THE FIRST PRIORITY MUST BE A RETURN TO FULL
that the Administration's draconian tax increases actually would result
EMPLOYMENT AS SOON AS POSSIBLE. THIS CAN BE
in one huge round-figure savings he claims for them. Nor have we
ACHIEVED THROUGH FISCAL AND MONETARY ACTIONS
heard any impelling reason why the national reduction must of ne-
DESIGNED TO PROMOTE ECONOMIC RECOVERY WITH A
cessity reach one mllion bbls daily in the very first year. In any event,
SUBSTANTIALLY REDUCED INFLATION RATE.
we believe it better to promise relatively less and achieve more than
to promise grandly and achieve less than pledged.
RECOMMENDATIONS:
We believe that the American people, as well as our friends in
-Accept and expand the President's anti-recession tax rebate/tax
the international community, both the suppliers and the users of
cut concept.
petroleum, will be more impressed by candor and performance than
-Achieve the maximum reduction of imported oil during 1975 con-
by roseate promises unfulfilled. We believe they will be more impressed
sistent with the economic upturn and a reduced unemployment
by our frank determination to maintain a strong American economy.
rate.
And we believe they will readily discern the superiority of a steadily
increasing long-term commitment to long-term objectives over a single
-Reject massive energy price increases caused by import tariff,
excise tax and sudden, total decontrol.
sudden surge upward in consumer prices.
-Add further stimulus to consumer spending and prevent the
Beyond conserving scarce fuels, we recommend a number of
unwarranted reduction in funds to the poor and elderly.
specific measures to encourage exploration for oil and natural gas and
-Increase the money supply and stimulate housing.
greater recovery from existing wells and fields. We recommend creation
-Release impoundments to provide immediate employment in the
of an Energy Trust Fund financed by a 5 cent per gallon retail tax on
gasoline and by yields from excess profits taxes. The fund is to be used
public works and heavy construction fields.
to assist in the more rapid development of coal gasification, liquifaction
-Assure adequate private and public employment in light of
and other synthetic fuel plants and to achieve scientific and technological
national needs.
progress in oil shale, geothermal, solar, nuclear fusion and other energy
The cost of energy under the Administration's program would rise
fields.
by over $40 billion during the first twelve months (closer to $50 billion by
Faithful implementation of the various facets of this program will
some analyses), an amount equal to the price increases caused during
close the growing gap between domestic energy consumption and produc-
the Arab embargo. The Administration's program would add this new
tion of all types and forms by the energy equivalent of some 11 million
burden to an economy already well into the deepest recession since the
bbls of oil per day by 1985, and will reduce our energy imports by that
1930's, with inflation continuing at an unacceptably high level, and with
year to 10% of our total consumption.
unemployment over 8%. (Fig. 1) Low- and middle-income households
The Nation's impelling need is for a consistent and coordinated long-
will be required by the President's program to spend an even greater
term plan. The Congress provides it.
portion of their limited income to purchase energy.
5
4
As its goal the Administration seeks a reduction of energy consump-
tion by one million barrels per day in 1975. To achieve it, energy prices
FIGURE 1
would be greatly increased, first by taxing all crude oil and natural gas
The Current Recession Compared to 1958*
and then by removing the present controls on the market price of oil
3 month Change
Three Month Increases in Unemployment
and gas.
in Number
Numbers and Rates
Unemployed
The price of energy is not determined by free forces of supply and
3
demand but rather by the governments of the nations that produce
energy. The policy question is whether the U.S. or the OPEC govern-
ments will set energy prices in this country. The Administration wishes
to decontrol old oil and new natural gas, giving the control of price to
OPEC and letting U.S. energy prices follow the prices established by it.
2
(Fig. 1A)
As Figure 1A illustrates, if the price of all energy is decontrolled, it
(millions)
will move toward the price set by OPEC. The fact that new domestic
AN INCREASE
oil-now decontrolled-is selling at the OPEC-determined price illus-
OF 2.0 MILLION
PEOPLE
trates this point. If control is maintained and extended the price of
1
(Oct. 74 to
domestic energy will be separated from the OPEC price. The Con-
AN INCREASE
Jan. 75)
OF 1.1 MILLION
gressional program calls for the rejection of the Administration's plan to
PEOPLE
decontrol energy prices entirely; it seeks to have the price of U.S. domes-
(Jan. '58 to
tic energy set by the U.S., not the OPEC nations. Prices should be high
April '58)
enough to encourage maximum production and discourage wasteful con-
0
sumption. However, the Congressional program calls for a combination
3 month Change in
of price controls that are needed to insure an equitable sharing of the
Unemployment Rate
burden and to shield American consumers and businessmen from the
3
impact of OPEC-inflated prices.
Over the long run the Administration hopes that the higher prices
could be absorbed in normal economic growth; but in the short run as
well as the long run, consumers would be required to adjust imme-
2
diately by not being able to afford energy or by being more efficient in
their use of energy. The Administration's proposals attempt to achieve
(percentage points)
AN INCREASE
long-term energy goals in the short run (one million barrels per day this
OF 2.2
year, two million by 1977). In SO doing, they threaten the Nation's
AN INCREASE
PERCENTAGE
economy by aggravating inflation, inducing a deeper recession and more
OF 1.6
POINTS
1
unemployment.
PERCENTAGE
(Oct. '74 to
POINTS
Jan. '75)+
No aspect of the President's program could be cited as addressing
(Jan. '58 to
directly the question of national economic recovery. The tax-cut proposal
April '58)*
is designed mostly to offset increased energy costs. The President's pro-
gram would cut taxes and create a large deficit. We agree that tax cuts
0
are justified but we believe these cuts should be designed for stimulus and
*Second largest
Largest 3-month
to help those who have been hurt most by inflation, and the size of these
3-month increase
increase since '48
since '48
cuts should be determined by what is needed to provide economic recovery
and full employment as quickly as possible.
7
6
The President's proposal can be thought of in three parts: (a) a
FIGURE 1A
$16 billion one time tax rebate to stimulate the economy; (b) a budget
The Price Effect of Energy Decontrol
moratorium of new spending programs; and (c) a $40 billion-plus cost
$
increase for energy in all forms, offset in part with $27 billion in cash
14
rebates to households, business and state and local government.
$13.00
Taken by itself, the President's $16 billion one time tax rebate
13
would have a very minor impact on our $1,500 billion economy. Its
real growth impact is about one percentage point in 1975 and 1976;
its unemployment impact is a reduction by about one-quarter percentage
12
point in each of these same years. In other words, the President's $16
$2.00 Tariff/Excise Tax
billion tax stimulus might reduce a projected 8.4 percent unemploy-
11
ment rate to 8.1 percent. The impact of the tax rebate on inflation is
insignificant.
If one adds the President's energy tax package which costs the
10
consumer about $40 billion, and takes approximately $10-$13 billion
out of the economy, thus adding to the recession, it is likely that unem-
9
ployment would get even higher and that inflation would be dramatically
increased by about three percent. The President has estimated that his
energy package will make 1975 another full year of double-digit inflation.
Price in Barrel of Oil Equivalents
8
$7.60
In sum, the Administration package is both inadequate and con-
tradictory: inadequate because it does not reduce the rate of unemploy-
$7.25
7
ment below what would happen with no policy changes, and contradic-
tory because it accelerates the inflation rate three percent beyond what
it would be with no policy changes.
6
5
$4.50
$4.50
4
3
2
1
0
Coal
Interstate Intrastate
Old
New Imports
Natural
Natural
Domestic Domestic
Gas
Gas
Oil
Oil
9
8
BERALD FORD LIBRARY
THE RECOMMENDATIONS OF THE CONGRESSIONAL
PROGRAM TO ACHIEVE ECONOMIC RECOVERY
FIGURE 2
Recognizing the interrelated nature of Energy and the Economy,
Congressional Program vs. Administration Target
the Congressional program, while designed to reduce national depend-
Added Economic Output
ence on imported oil, would halt the recessionary slide, begin economic
$ Billions
(GNP in 1974 Dollars)
recovery and provide millions of additional jobs without adding to
(1974 Dollars)
inflation.
100
To achieve economic recovery numerous suggestions were considered
that relate to fiscal and monetary policy and program actions. Recom-
TOTAL DIFFERENCE
$89 B
mended in addition to the tax rebate/tax cut concept is a combination of
$335 BILLION
actions which include a rejection of the Administration's energy price
increases, the release of impounded funds to create immediate employ-
ment, an increase of the money supply, stimulus for jobs in housing and
80
elsewhere and an adequate public employment program with relief to
$76 B
states and locales especially burdened.
If quickly implemented these recommendations will insure an end
to the economic downturn and the beginning of a vigorous recovery
during the year. Comparing this program to the President's program,
$64 B
our economy will be producing $42 billion more goods and services in
1976, $76 billion more in 1978, and a total of $335 billion more over
60
the 1975 to 1980 period. (Fig. 2)
This increase in goods and services will generate jobs, reducing the
$53 B
unemployment rate substantially from the Administration's projections.
By comparison with the President's economic goals, the proposed Con-
gressional program will produce at least 1.4 million more jobs by the
end of 1976 and well over three million more by the end of 1977. In
$42 B
total these recommendations, if implemented, will produce 8.3 million
40
more job-years of employment between 1975 and 1980 than the Presi-
dent's plan. (Fig. 3)
Under other circumstances the increase in economic activity might
be inflationary. However, with the economy operating so far under its
potential, the stimulus will not contribute to inflation. In fact, the
increase in output is likely to increase productivity as firms spread their
fixed overhead over an increased number of units.
20
A sensible policy of economic stimulus should provide the greatest
growth in early months. In contrast, the Administration's approach has
$11 B
the economy moving most rapidly years away as full capacity is ap-
proached and the inflationary risks are greatest.
0
1975
1976
1977
1978
1979
1980
11
10
More immediately, the Congressional program will avoid the infla-
tionary effect of the Administration's energy taxes, tariffs and total
FIGURE 3
decontrol, producing 2% less inflation this year and a total of 3% less
Congressional Program vs. Administration Target
Thousands of
by 1977. (Fig. 4)
Jobs
Added Employment
3,500
FIGURE 4
Congressional Program vs. Administration Target
Reduced Inflation
(Difference in the Consumer Price Index)
3,000
1975
1976
1977
TOTAL DIFFERENCE
0
8.3 MILLION
JOB-YEARS
1/4%
3/4%
2,500
1
2,230,000
%
1,970,000
2,000
2
2%
1,750,000
1,500
3
1,000,000
920,000
Elements of the Recommendation in Summary
1,000
Social Security and Supplementary Security Income. Reject President
Ford's 5% ceiling on social security; accelerate payment of benefits by the
full 8.7% effective January 1, 1975, and mail out retroactive benefits
checks in May or June.
500
420,000
Retroactive Personal Tax Reduction. Accept the concept of the Admin-
itsration's rebate of 1974 taxes. Redesign the program in accordance with
objectives recommended by the House Ways and Means Committee so
that low- and middle-income taxpayers receive a much larger share of the
benefits. Send out the payment in May or June in a single check that
End of
would provide a large boost to sagging personal income. This tax rebate
1975
1976
1977
1978
1979
1980
would provide a one-shot stimulus to the economy.
12
13
Temporary Personal Tax Reduction. Adopt a substantial additional tax
chase homes at interest rates they can now afford to pay. Interest subsidies
cut for 1975, consistent with House Ways and Means action. This reduc-
will be limited to low- and middle-income families with phase-out trig-
tion would affect withholding schedules by July 1 of this year. This tax cut,
gered to economic recovery. Reject rescissions and deferrals of appropria-
also targeted to low- and middle-income taxpayers, would provide con-
tions for existing housing programs. Provide temporary aid to
tinuing support to consumer purchasing power throughout 1975. The
homeowners to prevent mortgage foreclosures.
Congress envisions that the stimulus would be continued into 1976 if
Monetary Policy. Adopt a Congressional resolution calling upon the
necessary to continue the recovery.
Federal Reserve to (1) substantially reduce the long term interest rates
Business Tax Reduction. Accept the proposal to raise the investment tax
during 1975, (2) maintain a longrun growth in the money supply and
credit (ITC) to 10% retroactive to January 1, 1975. Reject the Admin-
other monetary aggregates commensurate with the economy's economic
istration's reduction of ITC to the 7% rate in 1976; keep the higher rate
growth potential, and (3) consult with Congress at semi-annual intervals
in effect until the economy reaches the full-employment zone so that busi-
on the Board's monetary growth targets for the next six months.
nesses can make investment plans with certainty. Set ITC at higher levels
for long term capital investment in energy-efficient equipment and in
Spending Reductions. The President's budget calls for an assortment of
equipment needed to convert from oil and gas to coal.
non-essential expenditures which should be eliminated or cut in the
interest of sound economic policy. Reject the Administration's $7 billion
Tax Reform. Enact an initial tax reform package in 1975 to yield approxi-
energy equalization payment (as well as its companion energy taxes).
mately $5 billion in added revenue. Such reform would include repeal of
Reduce other portions of the Administration budget-defense, foreign
the depletion allowance for big international oil companies, strengthen-
aid, and elsewhere-by $5 billion. From this $12 billion, restore social
ing the minimum income tax so that the rich pay their fair share, and
security levels, reject the food-stamp-cost reduction but undertake a
eliminating foreign tax subsidies so that American capital is not encour-
review of the food stamp program to assure that the benefits are received
aged to locate abroad.
by those most in need. Total spending for all programs should not exceed
Energy Taxes, Tariffs, and Decontrol. Reject the Administration's pack-
$355 billion in FY 1976 unless unemployment averages more than 8%
age of excise taxes on oil and natural gas, tariffs on imported oil and
during that period. (Fig. 4A)
decontrol of old oil. Add 5¢ to the tax on gasoline as a source of revenue
Adequate Public Service Employment in Light of National Need. An ex-
for an Energy Trust Fund.
panded public service employment program could play a major role in
Public Works Employment. Assure that the Job Opportunities Program,
bringing unemployment down. A public service employment program
the Economic Adjustment Assistance Program and the Public Works
should give priority to hiring the heads of families. It should avoid dis-
Impact Program (Titles X, IX and I of the Public Works and Economic
placing existing employment, treat the special concerns of state and local
Development Act) are fully funded and implemented to meet their
governments and create new jobs with increased emphasis on training
original purpose of providing short-term employment opportunities while
and equipment to satisfy important social needs.
constructing facilities of lasting value to the community. Reject rescissions
The House of Representatives has demonstrated strong initiative in
or deferrals and otherwise provide increased funding for short-term con-
getting the economic recovery programs underway. The enactment of
struction programs meeting urgent national needs such as water pollution
these programs deserves the very highest national priority. On the other
control and transportation. This action would offer opportunities for
hand an energy policy must be compatible with these objectives; it must
increased construction and related employment, activities which have
not inhibit their effectiveness. It is the development of an energy policy
suffered real decreases in spending as a result of inflation. Provide any
that aids national economic recovery that the Congress recommends in
additional Federal assistance which may be necessary to allow state and
this report.
local governments to make full use of increases in funding for public works
construction programs.
Housing. Stimulate the homebuilding industry through a shallow interest
rate subsidy program to enable low- and middle-income families to pur-
14
15
FIGURE 4A
Budget Effect of Congressional Alternative
OUTLAYS
360
355.0
ENERGY
ADDED EXPENDITURES
349.4*
350
Ford
TARGET:
Alternative:
$17.6B to Restore Part of
the $17B Ford Reductions,
$7B as
and add Public Service Jobs,
Energy
Conservation Programs
Offsets
IMPLEMENT A COMPREHENSIVE CONSERVATION PRO-
$5B Con-
340
337.4
gressional
GRAM THAT REDUCES SUBSTANTIALLY FOREIGN
$ Billions
330
$3B for Social Security and Other Cash Grants
Cuts in
Defense
IMPORT DEPENDENCE WITHOUT AGGRAVATING THE
Foreign
Aid,
NATION'S CURRENT ECONOMIC CRISIS. EXPAND DOMES-
Elsewhere
TIC SUPPLY BY DIVERSIFYING ENERGY SOURCES. ESTAB-
LISH MANAGEMENT PROCEDURES IN THE EVENT OF
DRASTIC ENERGY SHORTAGES.
320
RECOMMENDATIONS:
Alternative:
316.4
-Avoid sudden massive energy price increases.
313.4*
Ford
-Institute a combination of excise taxes and rebates on new auto-
310
mobile sales, deliberately geared to favor energy-efficient vehicles.
1975
1976
-Institute a 5¢ tax on gasoline as the financial base for an Energy
Trust Fund.
RECEIPTS
-Institute urgent program of energy conservation.
310
-Create a National Energy Production Board.
Less Revenue
-Improve management of current energy supply and protect
Ford
$6B Net of
independent segment of the industry by extending allocation
300
Energy,
297.5*
Permanent
authority.
and Retro-
active Tax
Alternative:
Reductions
-Achieve the maximum reduction of imported oil consistent with
$21B net of Permanent
293.0
and reform Tax Changes
an economic upturn and a reduced unemployment rate and em-
$ Billions
$12B Retroactive Tax Change
(Including Gasoline Tax)
290
"Extra"
power the Energy Production Board to limit imports to meet
Revenues
from Economic
targets.
Recovery
-Enact emergency powers to limit imports and include standby ra-
Ford:
Alternative:
$5B
tioning authority in the event of drastic reduction of energy supply
280
278.8*
from abroad.
271.8
270
1975
1976
*Source
1976 Budget
16
17
ENERGY
This Nation has previously assumed an unlimited and relatively
inexpensive energy supply; these assumptions no longer apply. The Con-
gressional program sets forth a comprehensive energy policy and identifies
a series of actions designed to conserve the use of energy and expand
its available supply.
First is recommended the rejection of the President's proposal for
energy price increases. The President's plan reflects a serious lack of
perception of the integrated nature of our economy. The added hard-
ships imposed by steep price increases must be avoided in favor of cutting
down on waste and expanding and developing our energy production
capacity. No justification can be found for impairing economic recovery
by inducing immediately a steep increase in the price of imported oil.
Recommended instead are a series of actions which, if implemented, will
produce both national energy sufficiency and a substantial reduction
in dependence upon foreign energy sources. A tax of 5¢ on gaso-
line at the pump would provide funds for energy production and con-
servation programs.
19
The goal of the Congressional energy program is self-sufficiency.
At present the Nation imports 20% of its energy sources from abroad.
FIGURE 5A
The Congressional program will reduce our reliance by 1985 on imported
Change in U.S. Energy Supply
energy supplies to less than 10% of the United States total energy con-
1960-1985
sumption (and to less than 20% of our total oil use). (Fig. 5) In addition,
50
our country will have in place a strategic reserve of oil that will provide
1985
three million barrels per day for a full year.
Consumption:
45 MMBDE
Under present policies the United States' energy consumption in
1975 could be equivalent to 38 million barrels of oil per day, with oil
Growth in
1985
imports approaching 6.5 million barrels per day (Tables I & II). At
consumption of
Production:
8 million barrels
present rates of growth by 1985 as a Nation we could be consuming an
per day oil-
40.5 MMBDE
equivalent
estimated 56 million barrels of oil or its equivalent (Table I).
Growth in
40
Domestic
If implemented the Congressional program will reduce this growth
Production
OIL IMPORTS
of 10.5
rate in energy consumption and by 1985, the Nation will be consuming
Million
45 million barrels per day. To achieve this goal, therefore, this program
Barrel Per
Day Oil
will conserve eleven million barrels per day by 1985 (Table III) (Fig.
Equivalent
5A). To provide that saving, a series of conservation efforts must be under-
Needed by
1985
taken immediately (Table IV).
Million Barrels Per Day Oil Equivalent (MMBDE)
30 MMBDE
30
Current
Production
FIGURE 5
DOMESTIC OIL
Energy Consumption and Domestic Production
50
20
TOTAL ENERGY CONSUMPTION
INCREASES 2% ANNUALLY
Million Barrals Per Day Oil Equivalent
45
ENERGY
IMPORTS
= 10% OF
NATURAL GAS
PRESIDENT'S SHORT
CONSUMPTION
40
TERM TAX/TARIFF
40.5
PROGRAM
ENERGY IMPORTS
10
37
DOMESTIC
ENERGY
PRODUCTION
INCREASES 2.8%
COAL
ANNUALLY
ENERGY IMPORTS
= 20% OF CONSUMPTION
30
1975
1980
1985
HYDRO
NUCLEAR
SOLAR, SOLID
WASTES, ETC.
1960
1965
1970
1975
1980
1985
Historical Source: FEA
20
GERALD 21 LIBERAT
Conservation
for automobile manufacturers to build and market them. In order to in-
sure that the American consumer derives the benefits of the incentive pro-
Transportation. The transportation segment has been identified for prime
gram, a manufacturer would have to establish that any price increase on
attention because it accounts for about one-fourth of total energy use and
the more fuel-efficient cars was justified on the basis of cost increases.
more than one-half of petroleum use. Automobiles are the leading energy
The Congressional Energy Program also calls for an intensive re-
user, accounting for more than 50% of the total energy consumed in the
search and development effort designed to develop within four years a
transportation sector. Thus an urgent conservation effort in the trans-
production prototype of a low-polluting, energy-efficient automobile that
portation sector alone will reduce substantially the Nation's total energy
meets required safety and emission standards.
budget and significantly reduce the Nation's dependence upon imported
As well as improving the efficiency of transportation vehicles them-
oil.
selves, the Congressional Energy Program proposes certain measures
In the President's proposed Energy Independence Act of 1975, the
which would encourage the use of more energy- efficient means of trans-
only proposal for conserving energy use in the transportation sector is
portation, including added funding of public transportation and rail re-
a requirement for motor vehicle labeling which would give consumers
habilitation, upgrading of road and track, electrification, modernization
information permitting comparison of the energy consumption of differ-
and expansion of roadways and terminals.
ent automobiles. The President has also proposed that the automobile
Unfortunately the Administration program failed to advocate any
industry meet a voluntary target of 40% improvement in fuel efficiency
mandatory energy conservation measures in the transportation sector. As
of new cars by 1980 and has asked the automobile industry to pledge in
a result, an optimistic, long-range projection for energy savings in trans-
writing to try to meet the 40% improvement objective. The Adminis-
portation under the Administration program would be less than adequate
tration has specifically rejected a program of mandatory fuel efficiency
to meet energy-sufficiency by 1985.
standards to accomplish the objective.
In contrast, the comprehensive energy conservation program in the
By contrast, Congress recommends a mandatory fuel efficiency pro-
transportation sector proposed in the Congressional Energy Program
gram that will dramatically improve new car fuel efficiency-50% by
would achieve substantial savings in the next 10 years, well over half of
1980 and 100% by 1985 (over the base year of 1974). The mandatory
the fuel consumed today by the automobile and twice the savings sought
program would be based upon a sales weighted fuel efficiency average of
by the President's program. (See Table IV.) The Congressional Energy
all new cars sold in a particular model year. The Secretary of Transporta-
Program offers certainty that this significant savings would be achieved
tion would be authorized to establish in each model year average fuel
because of the program to stimulate the shift to fuel-efficient vehicles and
economy standards which each manufacturer would have to meet or ex-
because of the mandatory fuel-efficiency standards which would be estab-
ceed. At the same time, it is recommended that Congress undertake a
lished by the Department of Transportation, not to mention the added
thorough review of all environmental standards in the light of developing
emphasis given public transportation.
an effective energy policy consistent with economic recovery and including
Transportation, though important, is but one sector of the economy
the relation of emission standards to better mileage.
cited by Congress for mandatory conservation.
In order to meet the goals of the mandatory fuel economy stand-
ards, the manufacturers would have to make substantial improvements
Residential, Industrial and Commercial Use. It is the goal of the Con-
in automobile technology and the sales mix of large cars and small cars
gressional program to conserve a significant quantity of oil equivalent in
would have to be altered considerably.
residential, industrial and commercial use by 1985. In these uses, the
An additional feature of this program would provide incentives for
most important saving would come from changing the present insulation
the purchase of fuel-efficient vehicles and the payment of a penalty or
requirements for future construction and making it economical for the
excise tax on the purchase of less fuel-efficient vehicles. The amount of
present owner to install insulation and other energy-saving devices on
rebate would increase as the mileage exceeded the annual standard; the
existing structures.
excise tax would also increase for fuel-poor cars, with a substantial built-in
A major Federal loan guarantee, grant and/or tax credit program
price spread between the two extremes. It is suggested that the break-even
is recommended for residential and commercial consumers for insulation
standard might increase by one mile per gallon annually as a continuing
and other energy-saving modifications. A principal objective of the pro-
incentive not only for customers to shop for energy-efficient vehicles but
gram would be to upgrade over 10 years some 40 million existing homes
23
22
presently in need of thermal protection improvements, such as ceiling
In addition financial aid would be provided to improve electrical
insulation, storm windows and doors, caulking and weatherstripping.
transmission lines and to make better use of existing generating capacity.
(See Table IV.) Financial incentives should also be explored to en-
Financial aid would be afforded as well to the utilities in order to facilitate
courage the installation of solar heating and cooling facilities.
construction of transmission lines that could take advantage of diversity
With specific regard to the Industrial use of energy, including electric
in demand and thus enlarge the capacity available for each utility to meet
utilities these recommendations are made:
peak loads without building as many new powerplants. In return, utilities
-Special investment incentives exclusively for conservation (in addi-
should be encouraged to redesign rate structures SO as to encourage en-
tion to those required for economic recovery) applicable to any
ergy conservation by all consumers.
capital investment in the next two years for retrofitting investments
At the governmental level, all Federal agencies would be required
made exclusively to save energy or to switch from oil and gas to coal
to give energy conservation the highest priority in all purchases, plan-
(with appropriate ceilings).
ning. policies and regulatory actions; specifically mandate the ICC, CAB
and Maritime Administration that energy wastage be cut out in railroad,
-Discouragements against use of natural gas in new electric power
airline, truck and marine transportation; work with state regulatory
generating plants.
agencies to establish standards for utility rate design in the pricing of
-A federal requirement for an energy conservation program
electricitv and natural gas to encourage energy conservation.
(efficiency standards) in each industry designed to economically
States would be enouraged and even required to develop mandatory
feasible conservation targets.
conservation measures and affirmative action plans for conservation, par-
-A research and development program for new energy saving indus-
ticularly with regard to the elimination of nonessential driving. Effective
trial processes designed to save 40 percent in key industries over the
enforcement of the 55 miles-per-hour law together with a host of remedies
next decade.
at the state level should result in substantial fuel savings. Federal funding
To facilitate conversion of electric power generating and other in-
of any such conservation program should be conditional upon effective
dustrial plants from petroleum and natural gas to coal-consistent with
savings. (See Table IV.)
public health, technological and economic considerations-we suggest
Overall, under these conservation efforts-many of which are man-
the appropriate committees consider guaranteeing that any new plant
datory--a savings of over 11 million barrels of oil or its equivalent per
for future conversion which faithfully meets current EPA emission stand-
day could be achieved by 1985 over what otherwise would have been
ards at the time the facility is built will enjoy a sufficient period of grace
consumed.
against imposition of more costly standards so as to permit amortization
of the required investment on an accelerated depreciation schedule. (See
Expanded Domestic Energy Supply
Table IV.)
As they begin to take effect and reduce the growth of energy con-
The Congressional program recommends action to facilitate and
sumption, the conservation programs will permit the orderly but acceler-
provide the necessary funding to revise building codes at Federal, state
ated development of greater and more diversified domestic sources of
and local levels to improve energy efficiency, a Truth-in-Energy law to
supply. The increased supply and diversification aspect of the program
require labeling of energy content and cost of all appliances, homes, auto-
is equally essential, therefore, to meet the Nation's long range objective
mobiles, etc., and performance standards for major appliances to con-
of reducing imports to 10% of domestic energy consumption and will
serve energy. (See Table IV.)
require a substantial increase in the use of coal and other more exotic
energy sources. (Fig. 6) (See Tables & VI.)
24
25
The overall objective of national energy sufficiency recognizes the
FIGURE 6
enormous undertaking involved in terms of capital investment and incen-
U.S. Energy Supplies 1975 and 1985
tives, in terms of environmental protection and national security. Switch-
ing from oil and gas to coal and other sources is just one aspect of the
program-although a most critical one-and it alone will require a sub-
Imports
Hydro & Geo
stantial commitment of national resources. A national program of this
Oil and Gas
magnitude requires the establishment of an instrumentality at the highest
Nuclear
Domestic Production
level of government to make certain that the program is successful.
Therefore at the core of the recommendations is the creation of a
Coal
New Sources
National Energy Production Board as an independent agency of the
government. It would mobilize unutilized and under-utilized private and
public resources to increase domestic energy production on an urgent
basis. The National Energy Production Board would be patterned after
the War Production Board of World War II and, subject to Congressional
50
review, would have authority and funding to break energy bottlenecks,
and to take all actions necessary to accelerate the production of and con-
45
version to domestic energy sources. Much of the cost would be funded
10%
of Consumption
out of an Energy Trust.
At the same time. the NEPB would oversee establishment of a
40
40.5
national system of oil strategic reserves and storage. The program would
37
create a stockpile that could supply three million barrels per day for six
Million Barrel Per Day Oil Equivalents
months by 1980 and for a full year by 1985. (See Table V.) Part of
(20% of
Consumption)
the oil stored would be purchased on the world market under secret bid
Sources Subject
30
30
57%
to Near Term
(40.5 million)
to encourage competition. The remainder could come from Naval Petro-
Depletion
leum Reserves, the Outer Continental Shelf and the marketplace. While
the establishment of the oil bank is an essential component of energy self-
sufficiency in the long term, it will be NEPB's prime responsibility to get
the augmented supplies and diversification underway on an urgent basis.
Sources Subject
20
73%
to Near Term
(30 Million)
Leading the specific recommendations proposed by the Congressional
Depletion
program is coal production and conversion.
Coal conversion incentives of major proportion are recommended
that are designed to implement a national policy requiring new base-
load fossil fuel fired electrical plants and heavy industrial boilers to burn
coal rather than oil or natural gas, and the conversion of existing plants
10
43%
over the next 10 years where feasible. (See Table V.) In this regard the
Congress supports expeditious implementation of the Energy Supply
27%
and Environmental Coordination Act of 1974 (referred to as the Coal
Conversion Act).
Capital equipment incentives, manpower development and engineer-
1975
1985
ing technology should be encouraged. The transportation network must
be greatly improved and coal should be mined and burned in com-
pliance with environmental standards and in compliance with the Fed-
26
27
eral Coal Mine Health and Safety Act. Strong measures are needed to
program should be modified also to create sufficient incentives to produce
encourage the conversion to environmentally sound coal use, e.g. tax
all oil that can be recovered economically through secondary and tertiary
credits, loan programs, or fuel taxes to finance the cost of conversion.
recovery, substantially increasing the amount of oil ultimately produced
At the same time a commercial demonstration of new synthetic
from the average field. Perhaps the most effective plan would be to in-
fuels from coal should be undertaken with an ultimate production goal
clude some decontrol treatment for secondary and tertiary recovery as
reaching the equivalent of 500,000 barrels of oil per day. (See Table V.)
"new" oil.
These technologies, together with oil shale, geothermal, MHD, solar
Exploiting fully natural gas potential is equally critical and the Fed-
and others, would be developed on a contract or joint venture basis
eral Power Commission must be mandated to provide price certainty at
with industry. Sufficient Federal financial support is recommended to
levels high enough to reflect future costs and to eliminate regulatory
proceed immediately. From this initial experience, a better assessment
delays, reducing any incentive to withhold gas because of the uncer-
could be made of environmental and social as well as economic costs.
tainty over government pricing policy.
Incentives should be provided to facilitate expansion of nuclear power.
The Congressional program therefore recommends measures to re-
We also recommend funding accelerated efforts to resolve the safety, safe-
form and simplify natural gas regulation, but continue interstate price
guard and waste disposal problems.
controls on old natural gas, and establish a statutory formula ceiling that
As to new domestic oil and gas sources, the Outer Continental Shelf
reflects cost of production. This should assure that the price is high
Act should be revised to accelerate exploration consistent with the public
enough to encourage maximum domestic production, but still below the
interest and in cooperation with states and public authority. This revision
OPEC cartel level.
will assure coastal states of environmental protection, establish a public
Finally, procedures to shorten needless regulatory delay in energy
knowledge bank on available resources, permitting production under
production should be adopted. This should include expedited considera-
leases so that available resources will not be kept from the Nation's sup-
tion of a natural gas delivery system from Alaska and cover speed-up of
ply by private speculation and require disclosure of geological and engi-
certification and regulatory procedures by FPC and State Utility Com-
neering data that pertain to these national resources.
missions with regard to both electricity and natural gas.
To encourage increased domestic exploration for oil and gas, we
We reject an automatic pass-through to consumers of a fuel ad-
recommend:
justment cost without scrutiny and justification by state and local
(1) Completely eliminating the depletion allowance on all' foreign
regulatory authorities.
drilling;
To be sure, there are issues related to the matter of increasing pro-
(2) An excess profits tax on all big oil companies, avoidable only
duction and achieving a greater diversity in the sources of energy supply.
by plowing profits back into domestic exploration, and depositing
Paramount among these are the environmental questions involved. Con-
proceeds from tax into Trust Fund; and
gress has played a chief role in developing long-range policies to protect
(3) Retaining depletion allowance only for small independent
public health and the environment and the actions recommended to in-
domestic explorers who do not operate retail outlets.
crease and diversify energy supply must be designed to maximize the
For the near term the Congressional supply program recommends
development of the more environmentally sound sources of energy in
that the Naval Petroleum Reserves be rapidly developed and necessary
preference to the more environmentally controversial sources.
transportation facilities created to make the estimated 10-40 billion bar-
To underscore the concern of Congress for an energy production
rels available as needed for storage or commercial use.
policy fully compatible with environmental concerns, this program rec-
And for immediate results, current production should be maximized
ommends the adoption of three precise legislative objectives:
along with ultimate recovery from existing oil and gas reserves; and to
facilitate secondary and tertiary recovery, tax incentives should be pro-
-Enact the Surface Mining Control Act.
vided along with Federal authority for mandatory unitization of fields
-Enact legislation which recognizes the interests of states in the siting
(harmonizing the production of wells into a common field) and produc-
of power plants, refineries, etc.; provides planning mechanisms for
tion at maximum efficient rates with authority exercised by states where
regional planning in which states participate and decisions can be
state laws and regulations meet Federal standards. The oil price control
made in a timely fashion SO that necessary facilities can be built.
28
29
-Establish machinery to recognize and resolve concerns of Coastal,
import dependence in the short term by managing and controlling any
Rocky Mountain States and others concerned with damage to the
excessive rate of energy consumption. Allocation management procedures
quality of life from potential exploitation of their regions and to pro-
would be called upon immediately in the event that enacted policies did
vide adequate funding to minimize detrimental secondary effects.
not lead to the previously stated goals. But full-scale rationing could be
While environmental preservation is a paramount concern of this
employed only in the event of a drastic reduction in energy supplies by
program, it is just as important that increased production and expanded
an embargo of oil imports.
supply be undertaken by a strong and vigorous industry.
The standby import quota authority vested directly in the NEPB
It is therefore recommended that the anti-trust laws be strengthened
together with a centralized purchasing mechanism for imports recognizes
to promote free enterprise and to encourage competition. It is recom-
that as a consuming Nation today we may need to become more deeply
mended also that the bidding system for Federal leases be changed to
involved in oil negotiation while we endeavor to attain an energy-suffi-
permit greater participation by smaller companies
cient status. Provision for the standby authorities reflects also that in the
Together these are the components of a policy designed to expand
near and mid term, energy is too important to America to be left in the
the domestic production of energy. With a reduced rate of growth, they
hands of a cartel of foreign nations. The Congress recommends therefore
chart a deliberate path to national energy sufficiency within the next ten
that the independent NEPB itself be empowered to create an oil import
years, eliminating this Nation's dependence on insecure sources of supply
administration which could require that exporters to the United States
as rapidly as possible without causing economic adversity along the way.
bid competitively for access to the U.S. market. In addition, the Board
National energy sufficiency is attainable under this Congressional
would be empowered to set quotas to limit imports.
program; the path is straight and deliberate, joining supply and conserva-
Other elements of the standby authorities should include the fol-
tion programs into an integrated rational policy.
lowing:
What the energy conservation and expanded supply programs in-
-Assure that any allocation/rationing program affords equitable
dicate, also, is substantial bipartisan agreement on the primary goals of
treatment of regions, industries, classes of consumers and independ-
U.S. energy policy-eliminating U.S. dependence on insecure sources
ent producers during an embargo or energy curtailment from other
of supply as rapidly as possible. In advocating creation of the NEPB, the
causes.
Congressional program has chosen a separate independent instrumen-
-Authorize the States to invoke more stringent mandatory conserva-
tality fully equipped to get the job done.
vation measures in any future curtailment.
-Direct the Executive immediately to submit its recommendations
Administrative Mechanism
for a system to ration gasoline and other forms of energy; the system
The NEPB and other involved agencies must be equipped equally
to be activated on notice, subject to expedited Congressional review.
well to meet each and every contingency that might occur between now
A final component of the comprehensive Congressional program
and the time a national energy sufficient status has been achieved. To
recommends creation of the National Energy Trust which would include
the dedication of funds needed to realize national energy goals.
meet such contingencies a host of standby authorities are recommended
As the financial base for this trust, a 5¢ tax on gasoline at the pump
by the Congressional program. They range from import quotas to cen-
tralized purchasing powers, allocations, and as the President has recom-
would be imposed 30 days after enactment. This revenue would begin to
mended, even to rationing.
pay for the urgent program of conservation and production.
Additional revenues for the Trust would be derived from energy
What these standby powers reflect is that Congress recognizes the vul-
taxes on inefficient uses of energy and by dedication of part of the funds
nerability of the Nation to energy shortages. To weather any such poten-
paid for leases covering the Outer Continental Shelf.
tial adversity, pending a status of energy sufficiency with reduced for-
eign dependency and the emplacement of an oil reserve, the Congress
Conclusion
accepts the President's judgment that enactment of standby rationing
If much of this Congressional program is in accord with the long
legislation is needed. Also it recommends the extension of the mandatory
range objective of the Administration, then our disagreement is over
allocation program which could accommodate a gradual shift to reduced
tactics and the coordination of energy policy with economic policy.
30
31
The Administration wants to tax energy at the source; the Con-
TABLE I.-EFFECT OF CONGRESSIONAL PROGRAM ON ENERGY
gress recommends taxing gasoline at the pump. The Administration
SUPPLIES
wants to put the entire tax on at once; Congress recommends a 5 cent tax
Million barrels of oil equivalent per day
coupled with urgent and mandatory conservation and production pro-
1973
1975
1980
1985
grams. The Administration seeks to achieve mileage standards; Con-
gress agrees, but would make them mandatory and supplement the
Energy demand:
Consumption if no new actions (historical)
36.6
38.0
47.0
56.1
standards with a large excise tax on poor mileage autos and an offsetting
Energy conservation reductions (congressional
subsidy for efficient cars. Most importantly, the Administration relies on
program)
1.3
6.0
11. 1
massive price increases to accomplish its goals while Congress would back
Adjusted consumption to reflect energy con-
servation
36. 7
41. 0
45.0
up its recommendations with authority to manage supply and allocate-
or even to impose quotas if necessary-to meet the goals.
Domestic energy supplies:
Petroleum
10.
10. 5
12.
13.4
In sum, the President's program would trade the jobs and economic
Natural gas
11. 2
10. 5
10. 1
10. 3
well-being of Americans to achieve a short-term result of dubious merit.
Coal
6.9
7.5
10. 1
15. 0
Other
1.5
2.5
3.4
5.2
The Congress will not tolerate such further economic sacrifice and its
comprehensive energy policy reflects a judgment that economic restora-
Total domestic supplies
30. 5
31.0
35.6
43.9
Imports
6.1
5.7
4.4
1.1
tion is the Nation's foremost priority today.
Total supplies
36.6
36.7
41. 0
45.0
TABLE II.-EFFECTS ON OIL IMPORTS
Million barrels of oil equivalent per day
1975
1977
1980
1985
Petroleum supply-Demand balance:
Consumption if no new actions
18.00
118.30
20.3
123.90
Imports if no new actions
16.50
18.00
29.5
112.70
Savings achieved by following actions:
Voluntary conservation
78
90
1.12
1.40
Mandatory conservation (difference between
congressional and administration conserva-
tion programs)
3 (0.28)
2.25
2.20
5.76
Accelerate oil supply strategy
10
10
.65
2.00
Substitution of coal for oil and natural gas
17
.40
.98
1.40
Promotion of coal for use by new facilities that
otherwise would use oil or natural gas
0
0
18
1.06
Total savings
77
1.60
5.13
11.62
Necessary imports:
Congressional program
5.73
6.40
4.39
1.08
Administration program
5.30
5.80
5.38
4.70
Strategic reserve strategy
20
30
1.00
3.00
New import vulnerability (requiring standby emer-
gency authority):
Congressional program
5.53
6.10
3.39
(4)
Administration program
5.30
5.80
4.38
1.7
1 The President's 1975 state of the Union message including economy and energy, Jan. 15,
1975.
2 Estimates.
3 Due principally to administration's price disincentives.
4 Surplus.
32
33
III.-CONSERVATION STRATEGY-SUMMARY 1
TABLE IV.-CONSERVATION STRATEGY-
Million barrels of oil
equivalent per day
1975
1980
1985
Transportation-Continued
Automobile-Continued
4. Price disincentives:
program (mandatory)
0.33
2.23
3.81
a 45
1.38
1.95
Congressional program (gasoline tax)
stration program (voluntary)
Administration program (excise tax)
5. Research on urban car
program
13
42
58
stration
program
(2)
(2)
(2)
Subtotal:
program (mandatory)
17
1. 47
3.65
Congressional program
program (voluntary)
42
83
1. 27
Administration program
nercial
sector:
42
1.36
2.08
Public transportation: Upgrade mass transit systems fol-
program (mandatory)
program (voluntary)
57
1.35
1.92
lowed by government programs to discourage inefficient
use of automobiles: 2
program (mandatory)
25
50
1.00
Congressional program
14
22
22
Administration program
program (voluntary)
Subtotal:
ressional program
1.30
5.98
11.12
Congressional program
inistration program
1.58
3.78
5.36
Administration program
Difference
(.28)
2.20
5.76
Total, transportation sector:
Congressional program
Administration program
program see table IV.
program.
Industrial sector:
1. Encourage voluntary conservation and energy audits:
TABLE IV.-CONSERVATION STRATEGY
Congressional program
Administration program
2. Investment incentives:
Million barrels of oil
equivalent per day
Congressional program
Administration program
1975
1980
1985
3. Mandatory energy conservation programs, including
efficiency standards:
⑆
Congressional program (adjusted to reflect item 2)
+
Administration program
4. Price disincentives (fuel and excise taxes):
conservation: Car pooling and proper
intenance
10.05
20.32
Congressional program
20.35
Administration program
55 m/hr speed limit
1.05
1 16
1.16
for purchase of new automobiles with
Total, industrial sector:
proved efficiency and fuel economy standards:
Congressional program
Congressional program (mandatory)
10
1.50
$ 3.00
Administration program
Administration program (voluntary)
4 05
5.48
$ 1.00
Residental-commercial sector:
1. Encourage voluntary energy conservation:
Residential
Commercial
Subtotal
2. Insulation tax credit:
Congressional program (commercial)
Administration program
TABLE V.-OIL STRATEGIES
TABLE IV.-CONSERVATION STRATEGY-Continued
Million barrels of oil equivalent per day
Million barrels of oil
equivalent per day
1975
1977
1980
1985
1975
1980
1985
Energy supply strategy-oil:
Residental-commercial-Continued
1. Accelerate Outer Continental Shelf devel-
opment
10.500
1.500
3. Promote 10-year program to upgrade 40 mi'lion
residences:
2. Assure maximum efficient rate of produc-
Congressional program
0.08
0.38
20.57
tion from existing wells and promote
Administration program
(7)
(7)
(7)
secondary and tertiary recovery
0. 100
0. 100
.050
0
4. Building code revisions
4.17
5.30
3. Promote commercial production of syn-
thetic fuels
0
0
100
500
5. Appliance efficiency standards and labeling:
Congressional program (mandatory)
0
2.09
2 22
Administration program (voluntary)
0
4 04
5.10
Total
100
100
650
2.000
6. Price disincentives:
Congressional program
(7)
(7)
(7)
Strategic reserve strategy-Oil:
Administration program 5
23
.32
.33
1. Production of Elk Hills
2 200
300
2. Development of Naval Petroleum Reserve
0
2.000
Total, commercial-residential sector:
No. 4
0
0
Congressional program
.42
1.36
2.08
3. Emergency storage
0
0
1 1.000
3.000
Administration program
.57
1.35
1.92
Total
200
300
1.000
3.000
Utility sector:
1. Utility rate redesign:
1 Estimate.
Congressional program 2
$.25
50
1.00
2 The President's 1975 state of the Union message including economy and energy, Jan. 15,
Administration program 5
4.02
4.05
.05
1975.
2. Investment tax credit
(9)
(9)
(9)
3 Assume that production from NPR-4 (item 2) is used to build up emergency storage.
3. Price disincentives:
Congressional program
(7)
(7)
(7)
Administration program 5
.12
17
.17
Total, utility sector:
Congressional program
25
.50
1.00
Administration program
.14
.22
.22
1
Comprehensive energy plan, Federal Energy Administration, December 1975.
2
Project independence report, Federal Energy Administration, November 1975.
8 Department of Transportation.
4 Estimated.
5
The President's 1975 state of the Union message including economy and energy, Jan. 15, 1975.
6 No immediate benefit.
7 No comparable proposal.
8 See item 3.
9 No direct conservation.
36
37
TABLE VI.COAL STRATEGIES
Million barrels of oil equivalent per day
1975
1977
1980
1985
Energy supply strategy-Coal:
1. Promote the development of new coal
supplies:
Production goals
7.50
10.08
15.00
(Million tons per day)
(1.9)
(2.52)
(3.81)
(Million tons per year)
(685)
(920)
(1, 370)
Current projections 1
8.52
9.80
12.04
(Million tons pe day)
(2.13)
(2.45)
(3.00)
(Million tons per year)
(755)
(895)
(1, 100)
Increases over current projections
28
2.96
(Million tons per day)
(.07)
(.80)
(Million tons per year)
(25)
(270)
2. Promote substitution of coal for oil and
natural gas:
Conversion of utilities with capability
to use coal 2
. 100
.300
.400
. 400
Conversion of existing utilities without
capability to use coal and new utili-
ties now in planning stage or under
construction which plan to use
natural gas or oil
0
0
3 280
500
Conversion of industrial facilities
1.075
. 100
3 300
1 500
Total
. 175
. 400
.980
1.400
1 Project Independence Report, Federal Energy Administration, November 1975.
2 The President's 1975 state of the Union message including economy and energy, Jan. 15, 1975.
8 Estimate.
4 Comprehensive Energy Plan, Federal Energy Administration, December 1975.
38