THE PRESS WEDNESDAY, JULY 18, 1979. Mr Carter’s energy plan

Press, 18 July 1979, Page 20

THE PRESS WEDNESDAY, JULY 18, 1979. Mr Carter’s energy plan

President Carter’s long-awaited announcement of an energy policy was probably worth waiting for. The core of the United States problem is that it uses too much of both its own and imported oil. Because of the amount of its imports, which in 1977 were about 25 per cent of the world’s total imports, American consumption is a world problem. President Carter has aimed at reducing the total consumption of oil and at halving the imports by 1990. He has designed a programme to do this which will not bring American industry to a standstill. Nor is it an unrealistic plan: in the decade ahead some major advance in technology may occur, but he is not relying on that. The programme was designed to work with known resources. The United States uses imported oil at the rate of about nine million barrels a day and various estimates suggested that it might increase its consumption of imported oil to 14 million barrels a day. In 1971 about one-quarter of its oil was imported: by 1978, in spite of the intervening oil crises, it was importing nearly half its oil requirements. President Carter has turned back the clock and has said that the United States will not again import more than it did in 1977. Hitherto the goal has been to hold or decrease imports, but they have risen steadily. Now he is using Presidential authority to set a ceiling on imports and, as other programmes take effect, gradually to reduce imports. The effect of reducing imports will be that demand for oil from the Organisation of Petroleum Exporting Countries will be less and the hope must be that the price will not rise as quickly as it has been rising in the last year. So long as consumers have insufficient alternatives to imported oil there can be no guarantee that price increases will be moderated. The exporting countries will still want to maintain their revenue. The measures to reduce consumption by limiting the amount to be used by power plants and by various conservation efforts are being supplemented by the development of indigenous resources such as shale oil. It will also mean a greater reliance on nuclear power plants. Sixty nuclear plants are

in use and another 72 are being built or planned. After the dramatic demonstration of the risks associated with nuclear power at Three Mile Island earlier this year, persuading the American public to increase the number of nuclear power stations may not be easy. Nor will it be a popular move if more generating plants burn coal without proper anti-pollution measures.

President Carter used the occasion to improve his standing in popular opinion. He recognised that the United States was facing not just an energy crisis but one of confidence in itself and in his leadership. Much must depend on his leadership. The Congress earlier turned down a standby rationing move. President Carter is obviously in a mood to fight Congress and much good, both for the United States and for the world, may come of that. If, however, Congress senses that the President is not carrying the public with him his measures may face trouble and setbacks in the Legislature. Although the Democrats seem to be delighted with the President’s plans, the Republicans seem out to fight him more on the grounds of private enterprise versus State control than on his over-all aims. The main complaint among the Republicans is that he has established two Federal agencies to develop indigenous and alternative fuels and to provide financing. The Republicans favour private enterprise. They may be on insecure political ground. Part of the reluctance of the American public to accept the seriousness of the crisis so far has been caused by the suspicion in which the big oil companies are held

President Carter has passed some of the initiative for new developments to these agencies and his scheme will hit the oil companies with a windfall profits tax. However, he has not taken the more provocative steps of dismantling or removing the development of other resources from the oil companies. Like other aspects of his programme, the gestures to the oil companies appear to have been finely judged. If his plan, which combines determination and optimism, is successful, the rest of the oil-consuming world as well as the United States will have cause to be grateful.