An Era of Limits Jimmy Carter and The Quest For A National Energy Policy

AN ERA OF LIMITS: JIMMY CARTER AND THE QUEST
FOR A NATIONAL ENERGY POLICY
By
John Costley Barrow, III
Dissertation
Submitted to the Faculty of the
Graduate School of Vanderbilt University
in partial fulfillment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
in
History
August, 1996
Nashville, Tennessee
Approved: Date :
JT TUM. (9^6
—i~] yJ l *^^7 t>
T^=±-
— 1*7 C
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Reproduced with permission of the copyright owner. Further reproduction prohibited
without permission.
ACKNOWLEDGEMENTS
Since I first began this endeavor, no one has supported me
as whole-heartedly and with greater patience, love, and
understanding as has Clisby Hall Barrow. My partner in this
adventure since I first applied to graduate school, she has
provided me with both the inspiration and confidence to pursue
this project to the end. No one knows better than she the hills
and valleys I have crossed, and yet she never lost faith in me.
Her compassion, commitment, and spirit continue to captivate me
today as much as they did when we first met so many years ago.
To my mother, Sandra, and father, Johnnie, I owe an awesome
debt that can never be repayed. They provided me with an idyllic
childhood and instilled in me a love of place and past.
Hugh Graham, Erwin Hargrove, Samuel McSeveney, Tom Schwartz,
and David Carlton served on my dissertation committee and provided
me with numerous insights and an astonishing depth of historical
knowledge. Their advice and comments proved invaluable.
Finally, I must extend special thanks to Hugh Graham. Since
he arrived at Vanderbilt, Professor Graham has encouraged me,
pushed me, and supported me in a fashion that should serve as the
ultimate model of what a mentor should be. Without his confidence
and faith in me, this dissertation would not have been possible.
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS ........................................ iii

Chapter
I. INTRODUCTION .......................................... 1
II. EXERCISES IN FRUSTRATION: U.S. ENERGY POLICY BEFORE

!977 .................................................. .....
Pre-1970s Energy Policy ....................... 14

Nixon and Energy Policy .......................... 20
Ford's Energy Policy ............................ 31
III. "THE MORAL EQUIVALENT OF WAR: "THE CREATION OF THE

NATIONAL ENERGY PLAN ................................... 42
IV. CARTER, CONGRESS AND THE NATIONAL ENERGY PLAN ... 84
Overview: The House and Senate Leadership . . 93
The NEP and The House of Representatives . . 101
The NEP and the Senate ............................111
V. THE BEGINNING OF THE END: THE IRANIAN CRISIS AND

ENERGY PHASE II .................................... ....
VI. ENERGY AND THE CRISIS OFCONFIDENCE ................. 170
VII. CARTER'S DEFEAT AND THE DISMANTLING OF HIS ENERGY

PROGRAM ............................................ 218
The Election of 1980 ....................... 219
The End of a Presidency and a Policy . . . . 227 The
Carter Energy Policy in Political Context 232
BIBLIOGRAPHY ............................................ 241
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CHAPTER I
INTRODUCTION
"The Carter administration," writes Walter A.
Rosenbaum, "began with a natural gas crisis and ended with the
Iranian hostage crisis. . .From start to finish, energy issues
crowded its agenda."1 From the time Carter first appeared on
television less than a month after his inauguration to announce
his intention to create a comprehensive national energy program,
energy issues dominated and eventually consumed his domestic
policy-making efforts. Carter considered the creation of a new
national energy policy "equal in importance to any other goal" of
his administration, although he later confessed that his efforts
on the issue were "like chewing on a rock that lasted the whole
four years.
In addition to dominating the president's policy-making
agenda, Carter's somewhat quixotic quest for a national energy
policy defined his presidency. On no other issue did Carter risk
so much of his political capital, and on no * 2
Walter A. Rosenbaum, Energy, Politics, and Public Policy,

Second edition (Washington, D.C.: CO Press, Inc , 1987), p. 6.
2
Carter quoted in Jimmy Carter, Keeping Faith: Memoirs of
a_ President (New York: bantam Books, 1982), p . 91 and Charles
0. Jones, The Trusteeship Presidency: Jimmv Carter and the
United Sates Congress (Baton Rouge: Louisiana State University
Press, 1988), p. 137.

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other issue did Carter experience his greatest triumphs and most
humiliating defeats. In energy policy one could see the strengths
of Carter's leadership—his willingness to tackle inherently
difficult national problems without regard to the political costs
and his conception of the presidency as leadership for the public
good. Conversely, energy policy also revealed the weaknesses of
the president's leadership—his difficulty in building political
coalitions and his failure to inspire confidence in his ability to
lead the nation. Despite Carter's unwavering commitment to
reorienting the nation's energy policy, energy issues haunted the
Carter administration in his last two years in office and greatly
contributed to his defeat at the polls in 1980.
As Carter prepared to leave office in January 1981,
assessments of his administration began to appear in the nation's
political journals and editorial pages. These evaluations of his
presidency mirrored earlier critiques of his efforts on energy
issues. Edward Walsh, writing in The Washington_Ppst, argued that
Carter "was not. . . ready to be president, ' that he "presided
over a deeply flawed presidency," and that he "articulated no

3
coherent political vision. Columnist Joseph Kraft summarized his
assessment of the Carter presidency in one sentence, claiming that

2
the
3Edward Walsh, "A Flawed Presidency of Good Intentions,"
The. Washington Post. 18 January 1981, p. C1 and C4.

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"Carter legacy is a ramshackle collection of shattered illusions,
compromised ideals and unresolved dilemmas."* Even those pundits
who wrote somewhat laudatory columns following Carter's defeat
also focused on personal leadership failures of the president.
While acknowledging that "Carter was true to his own principles,"
David Broder noted that "he was unable. . .to shape a consensus
for governing effectively. . .was hobbled by his almost complete
lack of eloquence and was embarrassed by his too-easy tolerance of
mediocre performance by some of too familiar aides." Broder also
pointed to a "flaw of character" that made it virtually impossible
for Carter to "gain the trust and affection of other politicians.
He was unable to persuade them to take risks on his behalf and on
behalf of his policies, even when Carter and the policies were
right." John Osborne, writing in The New Republic, added that
"Jimmy Carter leaves the presidency. . .unloved by any in
Washington beyond a tiny group composed of his wife, two of his
three sons, and four of the several Georgians on his staff.1,5
Regardless of political leanings, the community of political
commentators developed a surprisingly consistent critique of the
Carter presidency and its failures. In * 5
Joseph Kraft, Ramshackle Legacy . . ." The Washinaton

Post, 18 January 1981.
5John You/
Osborne, "White House Watch: Jimmy, We Never Knew
The New Republic. 17 January 1981, p.7.

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general they argued that Carter's record as president fell far
short of the expectations and hopes that he had raised in his
first months in office. Citing his lack of political experience at
the national level, they claimed that the president never enjoyed
a good working relationship with Congress and immediately
alienated a number of members by presenting a series of
legislative proposals in 1977 without adequately consulting or
lobbying the House and Senate. As a result, the Carter
administration saw many of its proposals defeated or drastically
altered by Congress. Furthermore, they noted, Carter rarely
displayed a consistent vision or philosophy to deal with the
problems confronting the nation. His moral aggrandizing and
contempt for traditional Washington horse-trading, did little to
lead the nation forward. In short, the pundits argued, the blame
for government's inability to govern effectively in the late 1970s
rested squarely on the shoulders of one person—James Earl Carter.
In contrast to those who blamed his failure of leadership
for the problems facing the nation in the late 1970s, Carter saw
structural weaknesses in the American political process as
contributing factors to his inability to govern effectively. In
his farewell address to the nation, Carter identified the growth
of interest group politics as a primary impediment to presidential
leadership. "Single issue groups and special interest groups," the
president argued, "distort[ed] our purposes because the

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national interest is not always the sum of all our single and
special interests."6 Carter was not alone in voicing concern over
systemic problems confronting national policy makers. Since the
late 1960s, a growing number of scholars have produced critical
assessments of the modern American state. Much of their work
focuses on the problem of policy paralysis produced by the
growth of interest group politics and partisan gridlock that
created an environment for governing in which political leaders
seek only short-term gains while economic and social ills become
more pronounced. As a result, they suggest, the American state
has become unable to develop public policy that adequately
addresses pressing economic and social maladies. According to
these scholars, vast structural weaknesses—not just individual
failures of leadership—have ossified democratic society,
crippled effective policy-making, and ultimately could make
society ungovernable.7
. 6P_u.blic Papers of the Presidents of the Unites States:

Jimmy Carter, 1980-1981 (Washington, D.C. : Government Printing
Office, 1981). y
7See, for example, Theodore J. Lowi, The End of Liberalism:

The Second Republic of the United Staffs. 2nd edition (New York:
Norton, 1979); Anthony King, ed. The New Ajmerican. Political—
System. 2nd edition (Washington, D.C.: U Press, 1990); Donald L.
Horowitz, The Jurocracv: Government Lawyers, Agency Programs, and
Judicial Dsnlsinns (Lexington, Mass.: Lexington Books, 1977);
John E. Chubb and Paul E. Peterson, eds. Can the Government
Govern? (Washington, D C • Brookings Institution, 1989); James L.
Sundquist, "Needed:'A Political Theory for the New Era of
Coalition Government in the United States," Political Science
Quarterly 103 (Winter 1988-89); Jonathon Rauch, "Demosclerosis,"
National Journal.
5 September 1992, pp. 1998-2003. ~

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My dissertation examines the creation and enactment of
Jimmy Carter's national energy policy. It explores the options
available to the president and his energy planners, the choices
they made, and the reasons they made them. It is my hope that the
story of Carter's energy policy provides a greater understanding
of the character of Jimmy Carter's presidency, the complexities of
energy policy in the late 1970s and the difficulties that any
comprehensive energy policy faces in the American political
system. I also attempt to place the story of Carter's quest for a
national energy policy within the larger context of the
aforementioned debate over the character of the post-1960s
regulatory state.
I have organized the dissertation chronologically. Chapter
one provides a brief overview of pre-1977 energy policy and gives
attention to changing assumptions regarding energy use in the
aftermath of the 1973 Arab oil embargo. Chapter two briefly
examines the role of energy issues in the 1976 presidential
campaign and focuses on the development of Carter's National
Energy Plan during the first three months of his presidency.
Chapter three explores the tumultuous path of the National Energy
Plan(NEP) through the House and Senate. I devote particular
attention to the obstacles encountered by the NEP in Congress and
the inability of Carter and Congress to reach consensus on energy
issues in 1977 and 1978. Chapter four discusses the growing crisis
in Iran, the reemergence of

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energy issues as the administration's most urgent domestic
policy issue, and the administration's second attempt to develop
new energy policy proposals. Chapter five explores the collapse
of Carter's energy initiatives in the spring and summer of 1979
and examines his final attempts to redirect the nation's energy
policy. Chapter six briefly describes Carter's defeat in 1980
and President Reagan's dismantling of the Carter energy program.
The chapter also attempts to place Carter's quest for energy
policy within the context of the difficulties of governing in
the late 1970s. Taken in this context, the story of Carter's
energy program suggests that structural weaknesses in the
American political system, not simply the president's
incompetence, hindered Carter s efforts to create a new national
energy policy. The story of Carter's national energy program
appears to validate arguments that the growth of interest group
liberalism and congressional assertiveness have inhibited the
ability of the regulatory state to plan for future. It also
implies that the federal government cannot adequately address
national problems in the absence of immediate and tangible
crises.

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CHAPTER II
EXERCISES IN FRUSTRATION: U.S.

ENERGY POLICY BEFORE 1977
On October 6, 1973, Jews throughout Israel gathered to
celebrate Yom Kippur, the holy day of atonement. On this "Sabbath
of Sabbaths," tradition and rabbinical law dictated that Jews
remain engaged in steadfast prayer, reflection, and fasting. On

se
this Yom Kippur, however, the nation's lf~i-mPose<3 rituals of
silence and reverence were disrupted by sonic booms and the blare
of air raid sirens. Bewildered congregants emerged from the hours—
long musaf services to discover the streets teeming with trucks,
buses, and jeeps, their headlights glowing to signify a state of
emergency. Throughout the afternoon, Israeli radio, usually silent
on Yom Kippur, broadcast classical music interrupted by gibberish
phrases such as "meat pie," "sea wolf," and "wool string" code
words calling army reservists to duty. As the faithful soon would
discover, the holiest day of their religious calendar had been
disrupted by a massive invasion by Egyptian and Syrian armies.
Once again, war had erupted in the Middle East.1
Half the world away in Key Biscayne, Florida, President

* 8
Richard M. Nixon was awakened by a 6 a.m. phone call from
From
Synagogue to New York Timas. 7
Staging Area, Old Enemies at War
October 1973, p.
11; "Black
October: Again," 8
Time, 15 October
1973, p. 30.

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Secretary of State Henry Kissinger, who informed the president of
the invasion. Although U.S. intelligence had information that
such an attack was imminent, neither the president nor the nation
was prepared for the economic upheaval and turmoil the war would
cause in the coming months. Since the summer of 1973, alarmed
U.S. oil company executives had reported to the Nixon
administration that King Faisal of Saudi Arabia had warned them
of serious repercussions involving oil exports to the U.S. if the
nation failed to support Arab interests in the region and
continued its overt military and economic support of Israel. The
administration, however, would refuse to heed this warning.2
On the same day that Egyptian and Syrian troops invaded
Israel, delegates of the Organization of Petroleum Exporting
Countries (OPEC) were assembling in Vienna to discuss a new oil
pricing agreement with international oil company officials. After
six days of fruitless negotiations, the meeting adjourned on
October 12 without an agreement. The following week, five Arab
ministers and one Iranian reassembled in Kuwait City and—in an
historic move— unilaterally raised the posted price of OPEC oil
from $3 a barrel to $5.11 a barrel, a seventy percent increase.
The Arab ministers also agreed to monthly five percent 9
2Daniel
Yergin, The Prize: The Epic Quest for Oil. Mnnpv.
and Power (New York: Touchstone, 1992), pp. 595-598; "Black
October," Time, p, 30; "Military Aid to Israel," Concrressional
Quarterly Weekly. 27 October 1973, p. 2858.

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reductions in exports if western nations continued to support
Israel in the war.3
Despite the severity of these actions and the earlier
warnings of King Faisal, Nixon refused to alter traditional U.S.
foreign policy and formally requested a 2.2 billion dollar
military aid package for Israel on October 18. In response, King
Faisal immediately ordered the cessation of all petroleum exports
to the U.S. and cut exports to other nations by 25%. Within days,
the rest of the Arab producers followed suit. Ironically, when
the member states formed OPEC in 1960, the West had paid little
attention (the New York Times did not even report the event until
almost a month later in a seven-sentence story tucked away on
paged 41). in the wink of an eye, however, OPEC had made its
presence and power known throughout the world. As Time magazine
ruefully noted, "the Arabs essentially have the West [and the
U.S.] over a 42-gal. oil barrel."4
The OPEC ministers could not have picked a better time to
wield their petroleum sword against the United States. Since
1950, oil prices (adjusted for inflation) had dropped
precipitously in the United States. The low prices led to
increasing national oil consumption, with an all-time high of

10
17.3 million barrels a day reached in 1973. Concurrently,
-E?erqy --- £^>3-^-cy (Washington, D.C.: Congressional

Quarterly, Inc., 1982), pp. 14-15.
„ 4EnergY—Policy, p. 15; "Unsheathing the Political Weapon, Time,

29 October 1979, p. 46. "Mideast Oil Lands Seek Price
Stability," New York Times. 10 August 1960, p. 41.
10

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Americans also had become more wasteful than ever. The U.S.
automobile industry, for example, reached a dubious energy
efficiency milestone in 1973, as automobile gas mileage reached an
historic low of 13.1 miles per gallon (compared with 14.3 miles
per gallon in 1960). Oil imports also hit a new record of 6.26
million barrels per day in 1973 and accounted for 36.2 percent of
consumption (up from 18.5 percent in 1960). Making matters worse,
the United States already had experienced a summer gasoline
shortage and faced a potential heating oil shortage even before
the actions of OPEC. With the announcement of the embargo and
price hikes, buying panic broke out as economic analysts predicted
widespread fuel shortages that would cause unprecedented hardship.
Stephen A. Wakefield, Assistant Secretary of the Interior, foresaw
a scenario of "men without jobs, homes without heat, children
without schools."'’
Between October 1, 1973 and January 1, 1974, the base price
of OPEC oil increased by almost 400%, from $3.00 per barrel to
$11.65 per barrel (OPEC raised the base price to $11.65 at its
December 22, 1973 meeting). OPEC's actions caused wholesale buyers
to panic and drove international market prices up to as much as
$17 a barrel. As winter approached, the situation threatened to
become worse. By New Year's weekend 1974, American motorists
discovered that many gas stations had run out of their monthly
11
fuel
, Enerqy—Policy, pp. 5, 7, and 9; Quoted in "Learning to

Live with Less," Time. 8 October 1973, p. 82.
11

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allotments. While some stations gouged desperate customers,
charging as much as two dollars a gallon, other stations that
attempted to ration their ever—diminishing supplies faced threats
from consumers. In Springfield Massachusetts, an angry customer
threatened to kill a gas station attendant if he did not fill his
car with gasoline. New York City leaders assigned policemen to gas
stations in an attempt to maintain order. In many areas, the quest
for fuel had degenerated into a brawling free—for—all between
competing motorists.6
The effects of the fuel panic were not limited to lines at
gas stations. U.S auto sales dropped 11%. In response, General
Motors temporarily closed down sixteen plants and laid off 105,000
workers just before Christmas. Chrysler took similar action,
closing ten plants that employed 44,000 workers. Airlines canceled
flights and laid off workers as fuel shortages made it impossible
to keep all of their planes in the air. In the South, commercial
fishing boats remained moored to docks because of the lack of
fuel. Thousands of construction workers lost their jobs, as the
building industry reported a twenty percent drop in business. The
trucking industry took a crippling blow as diesel fuel prices
almost doubled from twenty—seven cents a gallon to fifty—two cents
a gallon. Frustrated truckers responded to fuel price hikes by

12
using their tractor-trailer
_ 6Yergin, The. Prize, p. 615; "Panic at the Pump." Time. 14

January 1974, pp. 15-16. ---
12

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rigs to form highway blockades. The truck blockades ceased only
after the governors of Delaware, Ohio and Pennsylvania ordered
the National Guard and state troopers to remove the trucks
forcibly from the highways and arrest the drivers.7
The energy crisis also affected the nation's economic
indicators. Fueled by petroleum price increases, the wholesale
price index in November 1973 rocketed upward at an annual rate of
21.6%. During the same month, the Dow Jones industrial average
lost 165 points, a drop in value of seventeen percent. As
economic turmoil gripped the country in the winter of 1973-74,
the term "energy crisis" had assumed an all-too-familiar meaning
for the nation's citizenry and policy-makers. Confusion and fear
gripped the nation, as political leaders attempted to search for
solutions to deal with the crisis—a crisis that Secretary of
State Henry Kissinger would later claim "cost the United States
500,000 jobs, more than $10 billion in national production, and a
rampant inflation."8 * * * * 13
711
"Energy Shortage Strikes Home," U.S. News and World
ESEort, 10 December 1973, pp. 17-19; "The Shortages Losers and
Winners,' Time, 10 December 1973; "The Great Truck Blockade,"
U^S.. News and World Report. 17 December 1973; "The Fuel Crisis
Begins to Hurt," Time, 17 December 1973, pp. 30-31.
8"Stock
Plunge: Is the Worst Over?" U.S. News and World
Report, 10 December 1973, pp. 28-30; Inflation figure from
Wall Street Journal (find cite); Kissinger Quoted in Conaress
—the—Nation, _____ Vol, iv. 1973-1976 (Washington, D.C. :
Congressional Quarterly Inc., 1977), p. 201.
13

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Pre-1970s Energy Policy
Ironically, before the 1970s, U.S. energy policy had been
guided by the assumption that the energy problem in the United
States was one of abundance, not scarcity. Rather than attempt to
find ways to reduce the nation's dependence on petroleum
products, policy makers since the 1930s had developed policy that
sought to provide price supports for the domestic petroleum
industry. During the Great Depression, the discovery of the
mammoth east Texan oil fields, combined with the decrease in
demand caused by economic dislocation, resulted in a dramatic
drop in petroleum prices. The situation became so severe that
some producers allegedly began to dump oil into creeks in order
to cut their losses. To protect producers, oil states
successfully lobbied the U.S. Congress to establish the
Interstate Oil Compact Commission (IOCC) in 1935. Empowered to
coordinate production controls between oil producing states, the
IOCC pursued a policy that restricted oil production in order to
maintain price stability—a policy commonly referred to as "market
demand prorationing." Ostensibly justified as a conservation
measure, market demand prorationing became one of the chief means
of controlling the price of oil for the next thirty-five years.9 *
14
„ ^.9l?avid Howard Davis, Energy Politics (New York: St. Martin s

Press, 1978), pp. 59-61; Richard H. K. Vietor. Enerav galicy m
America Since 1945: A Study of Business Goyeînt Relations
(Cambridge: Cambridge University Press, 1984), pp.
1
4

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Three years following the establishment of the IOCC,
Congress took another significant action on energy policy that
would have far reaching consequences. With little fanfare, and no
dissenting votes, both the House and the Senate passed the
Natural Gas Act of 1938. Until passage of the 1938 law, the
regulation of the fledgling natural gas industry had fallen under
state authority. With the growth of interstate pipelines in the
1930s, however, questions arose over the ability of states to
continue to regulate prices of gas. Into this void stepped
Congress. Under the provisions of the Act, the Federal Power
Commission (FPC) would regulate the prices of interstate natural
gas sales, although the law left unclear the extent of the FPC's
regulatory reach. In particular, no one seemed to know whether or
not the provisions of the Act would extend to independent
producers of gas as well as the owners of interstate pipelines.
Despite this ambiguity, most American remained unaffected by the
debate due to the relatively minor uses of natural gas at the
time.10
In the years following World War II, policy-makers briefly
broadened their focus in regard to energy issues.
In 1952, for example, the Truman-appointed Paley Commission
issued a report, Resources for Freedom, that foresaw a
21-24; Yergin, The Prize, pp. 257.

10,
_ Martha Derthick and Paul J. Quirk, The Politics of
Deregulation (Washington, D.C.: The Brookings
1985), Institution,
Energy Policy.
p. 208; Davis, Energy Politics, pp. 116-119;
Vietor,
15 69-73.
pp. 64-65 and pp.

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doubling in domestic energy consumption by 1975. Although the
report made a vague call for the development of federal
"comprehensive energy policy," its authors argued that domestic
producers would have little difficulty in meeting the increasing
demand for energy resources in the coming years. The report also
noted that "within a decade or so" advances in U.S. technology
would lead to the production of synthetic oil to help offset
growing consumption. Although the commission correctly predicted
consumption increases of the future, it overestimated the impact
of energy technology advances. As a result, the commission saw no
need for government intervention to protect U.S. energy
interests.11
The optimistic tone of the Paley Commission Report soon was
overshadowed by more significant policy changes that would
drastically affect the energy situation of the 1970s. Amid the
great economic boom of the 1950s, the introduction of cheap
Venezuelan oil in the U.S. market signalled a sharp rise in oil
imports as a percentage of national consumption. Reflecting
traditional concerns, policy efforts centered on the protection of
domestic producers. Both Truman and Eisenhower embraced the

1
establishment of voluntary quotas on
11
Craufurd D. Goodwin, "The Truman Administration: Toward a
National Energy Policy," in Energy Policy in Perspective:
Today s—Problems, ___ Yesterday's Solutions, ed. Craufurd D.
Goodwin (Washington, D.C.: The Brookings Institution, 1981),
pp. 50-60; Gerald D. Nash, United States Oil Policy, 1890-1964
(Westport, Conn.: Greenwood Press, Publishers, 1976), DD 189190
and p.201
16

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oil imports. When voluntary quotas proved ineffective, Eisenhower
established the Mandatory Oil Import Program (MOIP) on March 10,
1959. Created to preserve "a vigorous, healthy petroleum industry
in the United States," and administered by the Department of
Interior, the MOIP limited oil imports to approximately 12
percent of national consumption for the next 11 years.12 * Once
again, policymakers sought policy that protected domestic
producers and did little to address the question of conservation
or better utilization of existing resources.1^
The other significant energy issue facing the Eisenhower
administration that would have far-reaching consequences was that
of natural gas pricing. Largely considered an unwanted byproduct
of petroleum in the years k®fore World War II, natural gas
rapidly became a widely used energy resource in the late forties
and fifties.14 * * 17 With the stunning growth in gas consumption
came renewed
12Vietor, Energy Policy, p. 120 and p. 144.
12William
J. Barber, "The Eisenhower Energy Policy:
Reluctant Intervention, " Energy Policy in Perspective: Today's
£mbl<pms, Yesterday' s, . Solutions, ed. Craufurd D. Goodwin
(Washington, D.C.: The Brookings Institution, 1981), pp. 251-
Technological advances, particularly in pipelines, made

the production and transportation of natural gas much more
feasible. These advances, combined with growing
suburbanization of the country and new industrial uses, created
heavy demand for gas. As a result, domestic natural
?n!nP5od«c.tlon increased ôm 2,660.2 billion cubic feet in 1940 to
9,405.4 billion cubic feet in 1955. Between 1930 and i960,
consumption would increase more than 1000 percent Nash, United
States Oil Policy. pp. 209-210. ’
17

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discussion of the regulatory authority of the FPC under the 1938
Natural Gas Act. In stark contrast to the unanimous approval that
greeted passage of the Act in 1938, Congress remained deadlocked
over resolving the issue of the FPC's authority in the postwar
years. Not until the Supreme Court's 1954 ruling in Phillips
Petroleum v. shake of Wisconsin, did the issue finally achieve
resolution. To the dismay of gas interests, the Court ruled that
the FPC had the authority to regulate wholesale prices of
independent producers selling to interstate pipeline companies.
With this single ruling, more than 40,000 independent gas
producers became subjects of the FPC's regulatory might.15
Congress, energized by the court's action, passed a bill that
provided for partial deregulation of the gas industry.
Unfortunately for the gas interests, the bill became embroiled in
scandal when Senator Francis Case (R.-S.D.) charged that a gas
industry lobbyist had passed him twenty- five hundred dollar bills
in a plain envelope. Although supportive of the bill, Eisenhower
reluctantly vetoed it in the wake of the bribery allegations,
fearful of any association with corruption during an election
year. As a result, an unprepared, understaffed FPC began the
painstaking task of regulating tens of thousands of gas producers—
setting into motion a process that historian Richard H.K. Vietor

15
later referred to as "decades of
15Nash,
United States Oil Policy. p .
233.
18

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adjudicatory blundering" that would inhibit production and lead to
natural gas shortages in the 1970s.16
The following decade saw matters of energy policy
overshadowed and subsumed by the growing concern over
environmental issues. The burgeoning environmentalist movement of
the late 1960s and early 1970s created a host of new restrictions
on energy use and development, as the American public increasingly
grew concerned with the effects its ravenous appetite for power
was having on the environment. Coal production, for instance,
began to decline as environmental regulations such as the 1970
Clean Air Act outlawed the use of plentiful but highly toxic high-
sulfur coal and encouraged industrial users to convert from coal
to cleaner burning oil and natural gas. The public's concern over
the dangers of nuclear power resulted in more stringent controls
that greatly slowed the development of new nuclear plants.
Hydroelectric power, previously viewed as a pollution-free method
of harnessing the power of water to produce electricity came under
attack for the destructive effects of man-made lakes and dams on
river ecosystems. As environmental legislation proliferated,
producers of energy faced a growing array of restrictions that
greatly impeded the development and exploitation of energy
resources.
By the early 1970s, national energy policy continued to
reflect assumptions about energy resources that were
16Vietor, Energy Policy, p.

11.
1
9

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increasingly outdated and in some cases wrongheaded. The U.S. had
become the largest consumer of energy in the world, gobbling up
almost a third of the planet's energy production per year. Yet as
the nation's appetite for energy grew at an astounding pace
(national energy consumption had doubled between 1950 and the
1970s, while the population increased by only 30%), policy-makers
gave little attention to the possible need for finding ways to
either increase domestic energy production or decrease energy
consumption. Although one might be hard-pressed to identify a
single, coherent energy policy in the U.S., one could identify
scores of energy policies, sometimes with conflicting purposes. By
1973, the energy policies of the U.S. had become so complex and
labyrinthine that 64 different federal agencies and departments
oversaw some aspect of energy policy. The piecemeal approach to
energy policy of the previous forty years gave birth to an
unwieldy and almost unmanageable mountain of policies and
regulations that would affect the supply of U.S. energy resources
in the 1970s.
Nixon and Energy Policy
Ironically, the man many would later blame for the nation's
lack of preparedness for energy shortages—Richard Nixon—had
attempted on several occasions as president to reorient the
nation's energy policy. In June 1971, Nixon delivered the first
energy message to Congress in the nation's history. Arguing that
"we cannot take our energy
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supply for granted any longer," Nixon proposed the creation of a
Department of Natural Resources to coordinate the majority of
federal energy programs and encouraged Congress to enact
legislation that would speed the development of offshore drilling
and devote more federal dollars to the development of the fast
breeder nuclear rector. Congress, however, could not reach
consensus on the proposals.17
Less than two years later and just months before the Arab
oil embargo, the president again addressed Congress on the
subject of energy policy on April 18, 1973. Renewing his call for
a new cabinet department for energy and natural resources, Nixon
also advocated a number of new policies that sought to increase
production of energy resources.
These proposals included the partial decontrol of natural gas
prices, increased offshore drilling operations, the construction
of deepwater ports capable of supporting oil supertankers,
congressional approval of the Alaska pipeline, and a $130 million
dollar increase in federal energy research funds. By executive
order, he terminated the oil import quota program (MOIP) in an
attempt to secure additional sources of petroleum. Two months
later, the president announced further energy policy initiatives,
urging Congress to approve a $10 billion dollar energy
development program and naming Gov. John A. Love (R-Col.) as
1 V11
Nixon: More Money, More Action for 'Clean' Energy,"
Congressional Quarterly, 11 June 1971, pp. 1284-88; Neil de
Marchi, Energy Policy Under Nixon," in Energy Polinv in
Perspective, ed. Craufurd D. Goodwin, pp. 409-411.
21

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head of the newly created Energy Policy Office in the White
House.18
Despite Nixon's request, however, both Congress and the
nation seemed unwilling to deal with energy issues. With the
exception of oil-state legislators, Democrats united in their
condemnation of the plan. Senator Henry M. "Scoop" Jackson (D-
Wash), chair of the Senate Interior and Insular Affairs Committee,
chided the president's plan as inadequate and called for the
creation of a 10-year federal energy research and development
program. Senator Ernest "Fritz" Pollings (D-S.C.) spoke for most
members of his party when he assailed the deregulation proposal as
"a step [that] can only result in billions of dollars of extra
cost to consumers without any assurance that more gas would be
committed than is now planned."^9 Speaking for his
environmentalist colleagues, Representative Morris K. Udall (D-
Ariz.) called for measures to increase conservation and charged
that the president's proposals to encourage production amounted to
little more than a "Bufferin'' for the nation's "three-decade-long
energy binge." Udall also expressed concerns that Nixon's emphasis
on production incentives would encourage the degradation of the
environment20 *
18"Energy:
End Import Quotas; Decontrol Gas Prices,"
Congressional Quarterly. 21 April 1973, pp. 903-919.
19"Energy:
End Import Quotas," p. 912.
20"Energy:
End Import Quotas," p. 912.
22

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Although the bitterly cold winter of 1972-73 had created
spot heating oil shortages in the northeast and temporary
shutdowns of some businesses and schools because of a lack of
fuel, policy-makers could not reach consensus on the direction of
new energy policy. Republicans and oil- state Democrats favored
relaxation of federal rules and regulations to encourage domestic
production, while most Democrats preferred policy that would
encourage conservation, thereby preserving the environment from
new resource extraction and protecting consumers from rising
energy prices. Although price controls favored by the majority of
Democrats protected consumers, they also had a deleterious effect
on the future stability of the energy market. The regulation of
natural gas prices and the continuation of domestic oil price
controls that began in 1971 as part of Nixon's larger anti—
inflation program, kept fuel prices at below-market levels.21
These low market prices, combined with the return of plentiful
fuel supplies in the spring of 1973, lulled many Americans into a
false sense of security about energy issues, and served to
further encourage consumption of fossil fuels. The cessation of
the oil import guota program in April 1973 made this sense of
For more on the regulation of oil and natural gas, see

Martha Derthick and Paul J. Quirk, The Poll Mrs of * 23
(Washington, D.C.: The Brookings Institution,
/ri Pietro S. Nivola, The Politics of Energy Conservation
(Washington, D.C.: The Brookings Institution, 1986); Richard
H.K. Vietor, Energy Policy in America since 1945: A Study in
Business-Government Relations (Camhridgg- namhr^r "ri-crcity
Press, 1984).
z
2
3

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security even more misguided as the U.S. became more beholden to
foreign sources for its seemingly unquenchable thirst for
petroleum. By mid-1973, despite Nixon's efforts, the question of
the United States' "energy future" attracted little attention from
policy-makers or the American public.
A Gallup poll conducted in May 1973, just six months before the
imposition of the embargo, found that only 4% of Americans viewed
the question of energy resources as a significant problem.22 * 24
Not surprisingly, the oil embargo jolted the United States
out of its energy slumber in late 1973. For a moment, at least,
the nation turned its attention away from the ever-growing
Watergate scandal and focused instead on ways of alleviating the
energy crisis. Although the embargo served as the catalyst to
reexamine the nation's energy policy, the causes of energy
shortages extended beyond the actions of OPEC. Rapidly increasing
demand for energy occurred as domestic oil production stagnated
and coal production declined. Increased environmental concerns
restricted the exploitation of certain resources, such as high-
sulfur coal and nuclear power. Federal regulations on oil and gas
kept prices at artificially low levels and discouraged research
into alternative fuels.23 All these
22George H. Gallup, The Gallup Poll: Public Opinion 1972- __2Z2/

V°1 • Wilmington, Delaware: Scholarly Resources, Inc.,
2 3 Energy -- Crisis ___ in America (Washington, D.C."

„
Congressional Quarterly, Inc., 1973), p. 3.
24

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factors led to gas shortages and forced new attention to energy
policy issues. In contrast to the 4% of Americans who viewed
dwindling energy resources as serious problem in May 1973, a
January 1974 Gallup poll found that 46% of Americans believed
that the energy crisis was "the most important problem facing
the country.1,24
Taking advantage of the leadership opportunities offered
by the atmosphere of crisis, Nixon once again attempted to
redirect the nation's energy policy. In a televised address on
the evening of November 7, 1973, Nixon stated that "we have an
energy crisis" and argued that the nation was "heading toward
the most acute shortages of energy since World War II."24 25

He
outlined a series of proposals to encourage conservation in the
short term and develop new energy sources for the long term. He
also called upon Congress to enact an Emergency Energy Bill that
would grant the executive branch authority to take special
action to curb demand and increase production. Nixon also asked
for the power to do the following: 1) enact daylight savings
time on a permanent yearlong basis; 2) relax environmental
regulations on a temporary, case-by-case basis to encourage
production; 3) impose energy conservation measures and
restrictions on commercial establishments as
24Gallup,
p. 230.
25fablic
Papers of the Presidents of the United States.
~ârd ■lNi'2clp5lf———
(Washington, D.C. : Government Printing
Office, 1974), pp. 916 and 921.
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needed; 4) increase exploitation of naval reserves; 5) reduce
speed limits throughout the country; 6) adjust the schedules of
planes, trains, and ships as needed. In closing, he addressed his
most ambitious initiative: Project Independence. Recalling the
spirit and commitment of the Manhattan Project and the Apollo
program, Nixon requested the creation of an Energy Research and
Development Administration (ERDA) to oversee a massive energy
development program that would free the nation from dependence on
foreign energy sources within ten years.26
Congressional response to Nixon's recommendations appeared
swift and decisive in the days and weeks immediately following his
energy address. Five days following the speech, Congress cleared
the Alaska pipeline bill. It also passed an Emergency Fuel
Allocation Act, giving the president authority to impose controls
on the price and distribution of fuel supplies. In addition to
working with Congress, the White House moved to reorganize its
internal energy advisory structure. In early December, Nixon
created by executive order the Federal Energy Office (FEO) to
supervise Project Independence and coordinate federal energy
policy. Under the leadership of former investment banker William
E. Simon, the FEO recommended a package of conservation measures
in an attempt to curb
26 •
Public Papers of the Presidents.
pp. Richard Nixon. 916-923.
1973.
26

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consumption.27 Among the FEO's recommendations: a 15% reduction in
supplies of home heating oil, a 25% reduction in commercial
heating oil sales, a voluntary ban on gasoline sales from 9 p.m.
Saturday to midnight on Sunday, and a nationwide speed limit of
55 mph for cars and 50 mph for trucks and buses. One final
measure called for a coast-to— coast blackout of Christmas
displays.28 *
The initial success of the pipeline and fuel allocation snd
early signs of congressional—executive partnership were illusory,
however. Nixon's request for an emergency energy bill giving him
broader authority to control the production and consumption of
energy aroused the opposition of many members of Congress opposed
to surrendering power on energy issues to the executive branch.
Although the Senate passed a version of the bill near the end of
November, the House resisted relinquishing energy policy-making
authority to the president. A number of House liberals from
energyconsuming states also began to press for a windfall profits
27Nixon,
who used the term "energy Czar" to describe Simon
s responsibilities, told Simon that he would have authority akin
to that of Albert Speer in the Third Reich
he
, ?as e .put , in charge of German armaments."
Unfortunately, Simon s quest for a successful energy policy
faced a similar fate as Speer's did against the Allies A
fndSpnS1<ihrtl1’-' £an$ervatl'';gs In an Age of Ohann..: Thp Mi von
iSftltutlon \n9m ) p.nn363(. Washington' D-c-= Brookings
"Nixon Expects Speedy Action on Energy Bill " Congressional

Quarterly Weekly. 1 December 1973, pp. 3150-55.
27

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tax on oil companies to accompany the bill.29 Others objected to
any relaxation of environmental standards to increase energy
production, with the National Clean Air Council calling the bill
"a public disgrace.1,29 The debate over the bill disintegrated
into a myriad of disputes, prompting Representative Richard T.
Hanna (D-Ca.) to remark that the lawmaking process resembled "a
bunch of blind men trying to put together a jigsaw puzzle in the
bottom of a sack in the middle of the night."* 31

Although the
House finally reached agreement on a bill reducing highway speed
limits and enacting year round daylight savings time, the most
important components of Nixon's energy proposals failed to win
congressional approval by the end of the year.32
Nixon's window of opportunity following the oil embargo
quickly began to close, as the energy crisis began to fade
almost as quickly as it appeared. By late January 1974, Energy
Czar Simon began to spend more of his time attempting to
convince the American public that an energy crisis did in
2g . t
_ P. ma7°r oil companies increased by an average
of 50% xn 1973 compared to 1972 profits. "Excess profits Provision

Delays Emergency Energy Bill," Congressional Quarterly, 22
a
December 1973, pp. 3335-36. '
_ ^°"E^êr House Action," Congressional Quarterly. 22

December 1973, p. 3355. -------
31
Congressional Quarterly Almanac. 1973. (Washington, D.C.:
Congressional Quarterly, Inc., 1974).
3 211
'Energy and Environment: Action Not Completed,"
Congressional Quarterly. 29 December, 1979, pp. 3432-3435.
28

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fact exist, noting that "my hardest job. . .[is] to keep the
American people awake to the fact that we do have a problem and
will continue to have a problem."33 Many Americans, both
conservative and liberal, began to voice suspicions that the
energy shortage was a contrived ploy by U.S. oil companies to
increase profits. With the exception of long gas lines in many
areas of the country and higher fuel prices, the dramatic
shortages envisioned in late 1973 failed to materialize. When
OPEC lifted its embargo in March 1974 and spring weather spread
across the nation, most Americans acted as if the energy crisis
had never occurred. Sales of gas—guzzling cars began to pick up,
ridership on mass transit systems dropped, weekend highway
traffic returned to normal levels, and drivers began to disregard
the conservation-directed 55-mph speed limit. By July 1974, the
public's attention to energy issues had returned to preembargo
levels. Gallup poll figures showed that only 6% of Americans
viewed the energy crisis as the most important problem facing the
nation.34
Unfortunately, the return to energy normalcy did not mean an
end to the potential for future energy crises. Good fortune, not
wise policy making, had spared the nation a more serious and
lengthy energy shortage. While the embargo was in effect, the
U.S. had benefitted from three factors
3 3 n
"The Whirlwind Confronts the Skeptics," Time 21 January
1974, p. 22. --- '
34Gallup,
p. 291 .
29

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that prevented a serious problem from becoming catastrophic.
First, voluntary conservation measures proved much more effective
than anticipated. Gasoline consumption in December, for instance,
dropped 8.7% below forecasts.
Second, the winter of 1973-74 had been unusually mild. As a
result, heating needs ran an average of 10% below normal. Finally,
and perhaps most importantly, the Arab embargo leaked like a
sieve. Despite Arab pledges to reduce production by 25%, total
tanker loadings at six Middle East ports in the last three months
of 1973 actually increased by 31% over the previous year.
Obviously, no one could guarantee that these three factors
would again combine to rescue the nation in any future crises. The
country's continued reliance on imported oil was another issue
that boded ill for the future. The OPEC embargo, despite its
shortcomings, had shown the Arab oil states that they could unite
effectively against western interests using a potent weapon. The
cartel had effectively seized control of the world's largest oil
supply. The United States, however, was slow to learn this lesson
despite the fact that imports as a percentage of U.S. consumption
continued to rise dramatically as domestic production continued to
decline. By the end of 1974, imports accounted for 38% of the U.S.
total oil consumption and would jump to 43% by 1976.35
35Enerqy
Policy (1980),
p. 5.
3
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The end of the 1973-74 energy crisis, coupled with the
ever-growing Watergate scandal, signaled the dissolution of the
Nixon administration's efforts to develop a more effective
national energy policy. Although Congress finally passed an
emergency energy bill in February 1974, Nixon vetoed the measure
on March 6, 1974, citing his objections to the provisions designed
to lower the price of newly discovered oil in the U.S, and arguing
that the bill "threatens to undo the progress we had already made,
and creates a host of other problems."36 In a news conference
explaining his decision, the President claimed that a "serious
[energy] problem" rather than a "crisis" now existed, making
extensive new federal policies unnecessary. The president's
statements, however, conflicted with projections by his own
Federal Energy Office and the president of Gulf Oil's domestic
operations that anticipated the likelihood of future shortages.
Nevertheless, the debate over energy became increasingly
irrelevant to the Nixon White House as the Watergate scandal began
to consume the presidency. Settlement of energy policy issues
would have to await the swearing-in of Gerald R. Ford in August
1974.
Ford's Energy Policy
36Conqressional
Quarterly Almanac. 1974 (Washington, D.C.:
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Despite the American public's fading memory of the energy
crisis, both Gerald Ford and congressional leaders agreed that the
potential for another, perhaps more severe energy shortage
remained a distinct possibility. Throughout the final months of
the Nixon presidency, both political parties in Congress had
presented and debated a number of energy related policies in the
hopes of avoiding future crises. When Ford assumed the presidency,
he inherited from his predecessor a patchwork of "emergency"
energy measures and a fledgling energy think-tank in the Federal
Energy Administration (FEA).^ Key issues that needed resolution
included decontrol of oil and gas, oil supply security,
alternative energy sources, a host of energy-related environmental
issues, and the overall federal role in energy development.
The question of price controls on oil created by far the
greatest controversy. As part of the wage and price controls
initiated by the Nixon administration to combat inflation, gas and
oil prices had been regulated by the federal government. Although
most of the price controls on other items had expired, a number of
congressional Democrats sought to extend the controls on fuel
prices beyond the original February 1975 deadline. Because most
economists predicted a price increase of seven dollars a barrel
without 37
37
A June reorganization had renamed the FEO the Federal
Energy Administration and had also absorbed into the agency
relevant offices from the Department of the Interior and the
energy division of the Cost of Living Council.
32

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price controls, members of Congress favoring continued regulation
found a broad base of support among the electorate. Ford,
committed philosophically to a free market approach, believed that
the decontrol of oil and gas prices would lead to higher prices
and encourage producers to expand domestic production. As a
result, the president embraced the deregulation of oil prices as a
means to reduce the possibilities of future energy shortages. In
order to placate his political opponents, who expressed concern
that deregulation would create unjustifiably high profits for oil
companies, Ford proposed a compromise position that called for
full decontrol accompanied by a windfall profits tax.
Ford incorporated his deregulation compromise into a
thirteen-part Energy Independence Act which he sent to Congress on
January 31, 1975. In addition to the plan to deregulate the price
of oil, Ford's bill also called for the deregulation of new
natural gas, a $3 import fee on every barrel of imported oil, the
creation of strategic petroleum reserves of 1.3 billion barrels of
oil, the development of mandatory thermal efficiency standards for
new homes and commercial buildings, and the labeling of all major
appliances and automobiles with energy efficiency ratings.
The act also would grant the president standby powers to control
supplies, production, allocation and consumption of energy and
energy related materials as well as the authority to impose
tariffs, quotas, and other restrictions on
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imported oil when a drop in imported oil prices threatened
domestic production.38
Democrats in Congress had been caught off guard by the
breadth of Ford's energy package and the speed with which it was
introduced. Additionally, Ford's resolve to deregulate prices and
impose fees on oil imports set off a firestorm of protest from
congressional Democrats. Senate Majority Leader Robert C. Byrd
(WVa.) assailed the Ford plan as a "sock-it-to-the-consumer"
scheme, and the House and Senate leadership delayed action on an
energy bill until the summer of 1975, when they presented the
Energy Policy Act as an alternative to the Ford plan.39 Although
several of * 6
38Neil
De Marchi, "The Ford Administration, Energy as a
Political Good, in Energy Policy in Perspective: Today’s
problems,—Yesterday's Solutions, ed. Craufurd D. Goodwin
(Washington, D.C.: The Brookings Institution, 1981), pp. 482-
Major provisions of the congressional energy act

included: 1)expanded authority for the FEA to order power plants
to use coal rather than oil or natural gas; 2) increased
presidential authority to control the flow of energy supplies
and energy related materials; 3) the creation of a one billion
barrel petroleum reserve; 4) standby presidential powers for
gasoline rationing and energy conservation measures; 5)
mandatory federal fuel economy standards for new automobiles
manufactured or imported in any model year after J977' targeted
to reach an average fuel economy level of at
l65S t
1 I61miles Per gallon by 1985; 6) a federal energy testing and
labeling program for major consumer products ranging from
refrigerators to television sets; 7) continued federal price
controls on domestic oil into 1979, eventual conversion of the
c?nt£°i authority into a standby power, and an immediate rollback
of domestic prices to an average per barrel price of no more than

$7.66; and, 8) authorization for federal audits 311. .pers°n® and
companies required to submit energy information to the federal
government and of all vertically integrated oil companies, to
verify the information they report. Byrd quoted in Energy Policy
(1981), p. 34.
34

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Ford's original proposals, such as efficiency labeling and
emergency standby presidential powers, were contained in the
Democrats' bill, the key conservation feature of Ford's earlier
proposal—decontrol of oil and gas prices—was defeated. Congress
instead opted to continue price controls on oil until 1979 and
roll back the price of domestic oil to $7.50 per barrel.4® By
continuing price controls, and thereby keeping oil and gas prices
artificially low, the Democratic plan did little to encourage new
production of energy as Ford had intended. Furthermore, the
artificially low prices likely would lead to increased
consumption.
Seeing no possibility for any other compromise, Ford reluctantly
signed the bill into law in December 1975.
While noting that the bill was "by no means perfect," the
president stated that it nonetheless provided "a foundation upon
which we can build a more comprehensive program."4^ Despite the
upcoming elections, Ford did not abandon his attempts to push
through Congress more meaningful energy policy reforms. In his
February 26, 1976 energy message, the President announced sixteen
new energy proposals. Temporarily abandoning his quest for the
complete deregulation of oil prices, Ford again sought the
40Legislative action was required only to extend oil price
controls. Under the Natural Gas Act, prices were subject to

control indefinitely.
„ , ^Public Papers of .the Presidents of the United States.

R; ?°fdr——-7-5- (Washington, D.C.: Government Printing
y
Office, 1976), p. 1992.
35

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deregulation of new natural gas, calling it "the most important
action that can be taken by the Congress to improve our future gas
supply situation."42 Other proposals ranged from utility rate
reform legislation to tax credits for energy conservation
improvements in existing residential buildings.43 Of these sixteen
proposals, however, Congress voted to approve only four before the
November election.44
By the time Congress adjourned for its summer recess in
August 1976, little legislative evidence existed that Ford
A 0
^Public Papers of the Presidents of the United States.
_ R. _ Ford, 1976—1977 (Washington, D.C.: Government
Printing Office, 1977), p . 448.
43Here, briefly, is a list of the Ford proposals:
1)Deregulate the price of new natural gas; 2) Provide additional
short-term authority needed to deal with severe winter shortages
of natural gas; 3) Expedite selection of a route and
construction of a transportation system to bring Alaskan natural
gas to the lower 48 states; 4) Streamline licensing procedures
for the construction of new powerplants; 5) Approve the Nuclear
Assurance Act to provide the basis for transition from a
government monopoly to a private competitive uranium enrichment
industry; 6)Approve proposed Clean Air Act amendments to permit
greater use of coal and to delay auto emission standards.
7)Allow production from the naval Petroleum Reserves; 8)Approve
creation of Energy Independence Authority; 9)Authorize loan
guarantees to aid in the construction of commercial facilities
to produce synthetic fuels; 10)Approve energy facilities siting
legislation; 10)Approve utility rate reform legislation;
11)Approve the Electric Utilities Construction Incentives Act;
12) Approve the Federal Energy Impact Assistance Act; 13) Set up
a $55 million weatherization assistance program for low-income
and elderly persons; 14) Provide thermal efficiency standards
for new buildings; 15)Provide a 15% tax credit for energy
conservation improvements in existing residential buildings.
44The
four Ford proposals Congress passed were the requests
concerning Alaskan natural gas, the naval petroleum reserves,
weatherization assistance, and thermal building standards.
36

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(or Nixon) had proposed any comprehensive energy policy
initiatives- Like his predecessor, Ford found achieving agreement
on energy issues a seemingly impossible task. Although few at the
time doubted the urgency of changing U.S. energy policy,
consensus on the type of policy to be pursued remained elusive.
Any successful energy policy needed to find ways of reducing
consumption or increasing production. Clearly, the artificially
low prices mandated by price controls had the adverse effect of
encouraging consumption and discouraging production. Yet
Democrats in Congress, facing intense pressure from their
constituents and concerned about the impact of skyrocketing fuel
prices on poor constituents, refused to give in to demands that
prices be deregulated. Some even favored stricter controls that
would reduce prices further. A number of Republicans viewed
complete and total decontrol warily as well, fearing the
potentially disastrous inflation that could follow. Democrats
from oil-producing states, however, favored decontrol, seeing it
as a means not only of combatting the energy problem, but also a
way of bolstering industry and jobs for their constituents.
Attempts to tax any segment of energy producing or consuming
interests immediately met with protests from the targeted groups.
Although a variety of tax schemes had been debated in Congress—
from windfall profits taxes to gas-guzzler automobile taxes to
gasoline excise taxes—none could overcome protests that arose
from
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an array of powerful interest groups—ranging from the oil industry
to consumers.
Other efforts to encourage production aroused similar
levels of disagreement. Congressmen with environmentalist-
friendly constituents viewed any relaxation of environmental
standards with great suspicion, regardless of any increased energy
production that might result. Nuclear power, in particular, once
widely regarded as the cure-all for the nation's energy woes,
continued to attract growing opposition. Conservatives, on the
other hand, viewed government involvement and funding in new
energy production efforts as contrary to the free market and a
wasteful use of public funds. They also argued that additional
layers of government bureaucracy would hinder rather than
encourage the development of new energy technologies. As these
examples show, little consensus on energy existed in the
legislative branch. As it had during the Nixon administration,
Congress remained divided on energy issues during the Ford
presidency.
As the 1976 election approached, both the president and
members of Congress backed away from serious discussion of new
energy proposals. By the fall, discussion of energy policy had
degenerated to finger-pointing rather than substantive action.
Ford's opponent in the general election, former Georgia Governor
Jimmy Carter, attacked the president for his failure to develop a
new energy policy,
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noting that "almost every other industrialized nation in the world
has an energy policy except for us." Carter promised that if
elected he would develop a policy that would reduce the nation's
dangerous dependence on foreign oil, although he never specified
how he would achieve this goal. His pledge to governors of three
oil-producing states to seek the deregulation of natural gas
prices was the most specific, and controversial, position Carter
took on the campaign trail. In response, Ford stressed that the
blame for the lack of an effective national energy policy rested
with a Democratically controlled Congress that rejected his
numerous energy-related proposals. Despite these occasional
references to energy issues, the subject of energy policy remained
relegated to the second tier of campaign debates and attracted
little interest from American voters. The poor economy and Ford's
association with the Nixon presidency dominated campaign
discussions and ultimately proved to be a liability the 38th
president could not overcome. Carter narrowly defeated the
incumbent in the general election, ending once and for all any
hopes that Ford had entertained for redirecting the nation's
energy policy.
To many political observers, the gulf that divided the
Democratic Congress and the Republican Ford and Nixon
administrations on energy policy clearly demonstrated the policy
gridlock that results from divided government.
39

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According to this reasoning, the solution to the energy dilemma
awaited a unified government of either Democrats or Republicans.
Many Democrats in Congress apparently shared this belief,
expressing their confidence that energy issues would be resolved
once one-party government was restored to the national level. As
political scientist Charles 0. Jones later noted, Democrats in
Congress "appeared to have prepared themselves for policy action
on [energy issues] pending the return of a Democrat to the White

45
House."
Two Democratic leaders of the House, however, were less
sanguine in their assessments of the future of energy policy. As
Democratic Congressman Jim Wright of Texas noted in late 1976:

Since the Arab embargo three years ago, we have tried
to do a few timid things to reduce consumption, but they
have not been very successful because total domestic
consumption has risen. ... We have made more money available
for long-range research, for things like solar energy, that
may help us thirty or forty years from now. But as far as
doing anything practical to increase the supply of energy
and reduce our dependence upon foreign sources in the
foreseeable future, we have done nothing.46
House majority leader Thomas P. "Tip" O'Neill, Jr. shared
Wright's sentiments on Congress's failure to act and added
that energy policy was "perhaps. . .the most parochial issue
Charles 0. Jones, "Congress and the Making of Energy

Policy," in New Dimensions to Energy Policy, ed. Robert
Lawrence (Lexington, Mass.: Lexington Books, 1979), p. 168.
46Conqress
and the Nation. 1973-1976 (Washington, D.C.:
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that could have ever hit the floor."47 The period 1973-76 should
have been a propitious moment for Congress and the president to
develop new energy policies. Virtually all economists, energy
experts, politicians, and business leaders agreed that the
nation must change its consumption habits and reduce its
dependence on foreign oil. The OPEC embargo had demonstrated the
potential for economic dislocation and upheaval that could be
caused by the nation's consumption habits. Even so, the federal
government appeared paralyzed and incapable of dealing with the
problem. Forty years of policy-making on energy issues seemed to
have done little more than leave the nation even more vulnerable
to a future energy crisis.
47Enerqy
Policy (1981), p.
2.
4
1

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CHAPTER III
"THE MORAL EQUIVALENT OF WAR:" THE CREATION

OF THE NATIONAL ENERGY PLAN
Bitterly cold weather gripped the nation on the day of
Jimmy Carter's inauguration in January 1977. For the previous
three months, Americans living east of the Rocky Mountains had
endured the coldest recorded temperatures in the nation's
history. Snow fell in Miami and eight-inch thick ice on the Ohio,
Mississippi, and Allegheny Rivers brought barge traffic to a
halt. The frigid temperatures led to an acute shortage of natural
gas and heating oil, forcing schools and factories throughout the
country to shut down. The closings left hundreds of thousands of
workers temporarily unemployed and thousands of students stranded
at home. Even in Carter's normally temperate home-state of
Georgia more than eighty percent of schools were closed and
industrial consumers were without natural gas.^
On January 20, however, most Americans diverted their
attention from the cold temperatures and focused instead on the
inauguration of the thirty-ninth president of the United States.
Millions watched on television as Carter took the
,1 Elizabeth Wehr, "The Winter of '77: Architect of the Gas

Crisis, Congressional Quarterly. 5 February 1977, p.193;
Alexis-Scott Reeves, "Cold Keeps Most Schools Closed." Atlanta
Constitution, 21 January 1977, p. A2; Jerry Schwartz, "Cold
Easing But Natural Gas Crisis Continues," Atlanta Constitution.
21 January 1977, p. A2.
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oath of office, delivered a rather uninspiring inaugural address,
and then walked part of the route down Pennsylvania Avenue to the
White House. The newly-elected president, his family, and a small
group of distinguished government leaders then retreated into a
specially constructed solar- heated review stand in front of the
White House and spent the next several hours watching the
inaugural parade.
In many ways the solar-heated parade structure served as
the perfect symbol for the problem-solving engineer president and
a nation paralyzed by its excessive reliance on nonrenewable
sources of energy. Unbeknownst to those watching the spectacle,
Carter soon would make the development of a national energy plan
the top priority of his administration. The president would
attempt to develop an ambitious and comprehensive energy policy
that would affect every citizen, business, and industry in the
country and would have the potential to invigorate or cripple his
administration. If Carter's pursuit of a radical new energy
program proved successful, future generations could look back on
this fledgling experiment with solar power at the inauguration as
the symbolic first step to a new energy age. But on that January
20, a keen observer of the inaugural parade might have noticed
that as the fifty-four marching bands, thirty-one floats, and one
giant peanut balloon passed in front of the president's solar-
heated booth, those within were bundling up in their coats and
rubbing their
43

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hands together.2 At least in this case, the attempt to forge a new
direction in energy had failed. Would a similar fate await
Carter's energy plan?
Carter's decision to make energy the first major policy
initiative of his administration surprised both Washington
insiders and the American public. The most talked about issues of
the 1976 presidential campaign had been the 1975 recession, tax
reform, and welfare reform, not energy policy. To be sure, Carter
had mentioned energy matters and had harshly criticized President
Ford's energy initiatives, but he never hinted that he would
pursue such a massive effort to redefine the manner in which the
nation used its energy resources. Throughout the campaign Carter
spoke only in general terms, calling for measures that would
increase conservation, create a Department of Energy, strengthen
automobile and appliance efficiency standards, and provide for
more uses of coal. His most specific and controversial proposal on
energy—to deregulate natural gas prices over a five year period—
illustrated the candidate's apparent lack of intense interest in
energy issues. With virtually no discussion or study of the
problem, Carter took a stand on the matter late in October 1976,
primarily as the result of a letter sent to him by adviser Stuart
Eizenstat, who
„ Waltzing into Office," Time. 31 January 1977, p. 15;

Stand s Solar Heating Receives Mixed Reviews," Washinoton Post,
21 January 1977, p. 18.
44

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advocated deregulation as a means of obtaining political support
in gas producing states. As Eizenstat later recalled, the episode
demonstrated the limited extent of Carter's interest in energy
policy during the campaign and the degree to which energy was a
non-issue.3
As president-elect, however, Carter's disinterest in energy
issues would prove short-lived. The natural gas crisis of late
1976 and early 1977 forced renewed attention to the nation's
heavy dependence on limited fossil fuels. Furthermore, a number
of people with whom Carter consulted during the transition
period, such as Senator Henry Jackson (Chair of the Energy and
Natural Resources Committee), S. David Freeman (director of the
energy policy project at the Ford Foundation), Omi Walden
(Director of the Georgia Office of Energy Resources), and Ralph
Nader (well-known consumer advocate and political gadfly), urged
Carter to make the development of a comprehensive energy policy
one of the foremost priorities of his administration. Probably
the most persuasive argument affecting Carter's thinking came
from his old mentor from the navy, Admiral Hyman Rickover. The
Admiral, "father" of the nuclear navy and Carter's
U.S. Congress, House, Committee on House Administration,

The Presidential Campaign. 1976 (Washington, D.C.: Government
Printing Office, 1978); Linda Charlton, "Carter Watches the
Convention and Confers on Energy Policy," New York Times. 18
August 1976, p. 20; Richard H. K. Vietor, Energy Policy in
America s.inc.e 19.45: A Study of Business-Government Relations
(Cambridge: Cambridge University Press, 1984), p. 306; Stu
Eizenstat Interview, White Burkett Miller Center of Public
Affairs, University of Virginia, Project on the Carter
Presidency, 1982 (hereinafter cited as PCP), p. 30.
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commanding officer in the early 1950s, had lectured Carter on
what he saw as the nation's almost suicidal dependence on fossil
fuels. Arguing that the growth of energy consumption soon would
exhaust the world's oil fields, Rickover's lecture had an immense
effect on the policy decisions the newly elected president soon
would make.4
Carter also saw the question of energy policy as one that
had vital implications for both domestic and international
policy. On the domestic front, Carter believed that sporadic
energy shortages and price increases would wreak havoc on the
U.S. economy by creating spiraling inflation and increased
unemployment. He expressed even 9^"®3.ter fear about the effect
that the lack of a new energy policy would have on international
policy, particularly in the area of national security. Because of
the nation's rapidly increasing dependence on oil imported from
politically unstable foreign regions (U.S. oil imports had
_ ^ is unclear exactly when Carter decided to make energy

policy one of his administration's top priorities. Neither
Katherine Kitty Schirmer Cochrane (who worked on the energy
issues cluster group during the transition and later served as
the energy specialist on the domestic policy staff) nor James
R. Schlesinger (who served as Carter's first energy adviser and
Energy Secretary) could recall exactly when Carter made clear
the importance energy policy would have in his presidency. Both
agreed, however that it was clear by December 1976 that Carter
intended to pursue energy policy as a major domestic
initiative. They also suggested that the natural gas shortages
in December and January influenced the that characterized
Carter's pursuit of energy policy. James R. Schlesinger
Interview, PCP, pp. 15-16; Author's interview with Schlesinger,
October 1995; Author's interview with Katherine Schirmer
Cochrane, March 1996 (hereinafter referred to as Cochrane
interview).
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risen from 35% of domestic consumption in 1973 to almost 50% by
the time he took office in 1977), the president-elect believed
that the country risked being brought to its knees by foreign
powers. Taken together, these factors led Carter to make the
creation of a national energy policy the top priority of his
administration.5 6
Yet the story of Carter's post-election decision to embark
on his energy crusade cannot be explained completely without at
least noting certain characteristics of his personality and his
sense of presidential responsibilities that compelled him to enter
the energy frontier. As a moralist, Carter believed that the
nation's lack of an energy policy led to the irresponsible waste
of precious natural resources. The present generation had an
obligation to provide future generations with energy alternatives.
In short, he had an unyielding moral conviction that the nation
must act with greater prudence as stewards of the earth's
resources. Trained as an engineer, Carter also looked on the
energy situation as a problem that could be solved through
careful, analytical study and deliberate action. Because of his
convictions and training, it is not surprising that Carter decided
chose to make energy policy a priority in his administration.®

The effort to formulate a national energy policy also
5Jimmy
Carter, Keeping Faith: Memoirs of a President (New
York: Bantam Books, 1982), pp. 91-93.
6James
Schlesinger Interview, PCP, pp. 15-16.
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jelled nicely with Carter's conception of his role as president.
As political scientist Erwin Hargrove has noted, Carter believed
it the duty of the president to overcome the needs and wants of
special interest groups and represent the "public good." Only the
president, Carter believed, could formulate policy that would
benefit the nation as a whole.
In Carter's mind, "good" public policy did not focus on
politically safe short-term fixes, but on comprehensive long-range
solutions. In the case of energy policy, previous attempts to
alter the nation's energy use had failed, partially because
various interest groups obstructed any meaningful reform and
partially because many politicians typically shied away from any
type of reform that could be disruptive to either energy-producer
or consumer constituents. Unlike many others in Washington, Carter
did not conceptualize energy policy primarily as a matter of
market freedom versus government control. Rather, he saw the
creation of a new energy policy as a moral responsibility to
develop an energy program that would increase conservation, fuel
production, and alternative energy development, yet also protect
the environment, provide economic equity between producing and
consuming regions of the country, and balance the interests of
energy producers and consumers. Looking at the past attempts at
energy reform, Carter undoubtedly saw the supreme test for his
beliefs concerning presidential leadership. By the time of his
inauguration, he had become convinced that tackling
48

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the energy problem head-on with a sweeping comprehensive new
policy could lead the nation to a promising new energy future.7
On December 23, 1976, Carter gave a strong indication of
the importance energy policy would have in his administration
when he announced that James R. Schlesinger would serve as the
special presidential assistant for energy matters. Schlesinger,
unlike many of the other Carter appointees, had many years of
high level government experience in Washington. Armed with a
Harvard PhD. in economics, Schlesinger first came to the capital
in 1969 as Richard Nixon's assistant director of the Bureau of
the Budget. In 1971, Nixon selected him to head the Atomic Energy
Commission, a position Schlesinger held until he became director
of the Central Intelligence Agency in 1973. Schlesinger reached
the pinnacle of his career in 1973 when Nixon appointed him
Secretary of Defense, an appointment later marred when Gerald
Ford fired him in November 1975 following Schlesinger's continued
criticism of the administration's proposed defense cuts. Despite
Schlesinger's extensive resume of government service, however, he

* 49
brought a great deal of political baggage to his
7Erwin
C. Hargrove, Jimmy Carter as President-*
leadership and the Politics of the Public Good (Baton Rouge,
La.: Louisiana State University Press, 1988), DD 13 —1 6 *
Carter, Keeping Faith, p. 92. '
4
9

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new post.8 Perceived by many in the Washington establishment to be
as arrogant as he was brilliant, Schlesinger had a reputation for
a mercurial temper and an inability to defer to those who
disagreed with him, regardless of their position or title. A
former Pentagon aide claimed that the fierceness of Schlesinger's
temper could "melt the stars off a four star general."9 10 Arriving
at meetings in his trademark rumpled suit and untucked shirttail,
his pipe clenched between his teeth, Schlesinger brought a
righteous zeal to every post he held. His feverishness and
tendency to engage in almost condescending lectures on policy
issues reportedly caused Richard Nixon to instruct an aide to
"never bring that guy in here again."19 His reputation even led
some to suspect incorrectly that his condescending manner made
President Ford so uneasy that he fired him as Secretary of
Defense. Responding to the widely—held view of his arrogance,
Schlesinger once retorted, "Goddamnit, I am arrogant. I
8My
characterization of Schlesinger is supported by the
interview I conducted with Cochrane, a Carter White House
assistant, and is drawn from the following articles: Les Gapay,
"Man with a Mission: Schlesinger Is Facing Long Struggle to Sell
Carter's Energy Plans," Wall Street Journal. 8 July 1977, p. 1;
"Mr. Energy: Doing the Doable—and More," Time, 4 April 1977, pp.
60-61; James R. Naughton, "Schlesinger in Key Role Serving Third
President," New York Times. 22 April 1977; John W. Finney, "James
Rodney Schlesinger," New York Times, 24 December 1976, p. A-11.
9"Mr.
Energy," p . 61.
10Naughton, "Schlesinger in Key Role," p. 1.
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can't stand stupid questions."11
Further complicating Schlesinger1s appointment, the new
energy adviser had gained the enmity of many environmentalists
because of his activities at the Atomic Energy Commission. Shortly
after assuming the chairmanship of the AEC, Schlesinger provoked a
firestorm of controversy by supporting the underground testing of
a five-megaton bomb on an island off the coast of Alaska.
Determined to demonstrate to environmentalists that the test was
safe, Schlesinger personally witnessed the detonation with his
wife and two of his children, nonchalantly telling his family,
"We're going to blow up an island." Not surprisingly,
Schlesinger's support of nuclear testing, combined with his
promotion of additional nuclear power research and development,
alienated him from environmentalists, an important constituency of
the Democratic party.11 12
Opposition to the Schlesinger appointment was not limited to
environmentalists. As Secretary of Defense, Schlesinger's hard-
line approach to U.S.-Soviet relations alienated him from a
majority of Democratic constituencies who favored detente and
defense cuts. Additionally, Omi Walden (an unofficial energy and
environment adviser to
11"Man
with a Mission," p. 1.
12
Bob Rankin, "Schlesinger Appointment Raises Questions
About Nuclear Power Advocacy," Congressional Quarterly. 1
January 1977, p. 6.
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Carter and director of the Georgia Department of Natural
Resources) urged the president-elect to reconsider his selection
of Schlesinger, noting that representatives from a variety of
consumer groups, engineering societies, universities, and even
officials from oil producing states had indicated concern over the
appointment. Nine members of the U.S. House of Representatives
wrote the president-elect, arguing against Schlesinger's
appointment because of the rigidity of his beliefs and his close
association with nuclear power advocates. The New York Times'
editorial board took a similarly dim view of Schlesinger, claiming
that he had "a disturbing record on energy issues." The
relationship between the president-elect and the new energy czar,
the Times concluded, would at best be an "odd partnership.1,13
Carter, in the face of this criticism, refused to break up
the odd—partnership." in fact, the Harvard Republican and the
peanut farmer Democrat had formed a surprisingly close
relationship during the presidential campaign. Schlesinger and
Carter first met shortly before the 1976 campaign debates after
Schlesinger contacted the Carter campaign and offered to advise

* 52
the Democratic nominee on
13Memo,
Omi Walden to President-elect Carter, Subject* Key
Energy Appointment, 18 December 1976, "Cabinet Selection-
Political Problems 11/76-1/77," Box 1, Office of the Staff
Collection, Jimmy Carter Library; Rankin, Schlesinger
Appointment," p. 7; "The Carter Team Completed," New York Times.
24 December 1976, p. A18.
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foreign policy and defense issues.14 Following their
initial meeting in Plains, Schlesinger became an unofficial
adviser to the Democratic nominee and a close confidante as
well. The two men became so close that Carter even
considered naming Schlesinger as his Secretary of Defense
rather than his energy adviser—a plan that was derailed by
Carter advisers fearful of party mutiny in the event of such
an appointment.15
The two men shared an intellectual and personal kinsmanship
that transcended political parties. Although they came from
different religious backgrounds, both had experienced religious
self-awakenings as adults. Carter became a "born-again" Christian
in the late 1960s and Schlesinger converted from Judaism and
became a devout Lutheran. They shared an affinity for the
outdoors— Carter's enjoyment of fishing and hiking corresponded to
Schlesinger's passion for bird-watching. In public life, both men
viewed themselves as stewards called to act as voices in the
wilderness. They confronted policy problems as technicians rather
than theorists. Neither man enjoyed playing traditional games of
politics. They believed in swift action, sometimes without giving
sufficient consideration to the political fallout of those
actions.
14In
his Miller Center interview, Schlesinger relates a
similar description of his first encounter with Carter, although
in Schlesinger's account, Carter initiated their first meeting.
15 .
Keeping Faith, p. 96; Schlesinger Interview, PCP, p. 9.
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Most importantly, they both saw the quest for a new energy policy
as a test of moral leadership, a test of the resolve of the
American people, and as a means to restore "ingenuity and
imagination" to the American pantheon of values.
Without hesitation, Carter entrusted to James Schlesinger the
responsibility of developing a new energy policy.16
The outcry over Schlesinger's appointment had dissipated by
the time Carter made his first public address to the nation two
weeks after his inauguration. Attired in an unbuttoned cardigan
sweater and casually reposed in an armchair in front of the
fireplace of the White House library, the president told the
nation that on April 20 he would present to Congress a
"comprehensive long-range energy policy" developed by Schlesinger.
Speaking in broad generalities, Carter said only that the plan
would emphasize conservation, the development of coal resources,
and research on renewable energy sources. In typically Carteresque
fashion, he then admonished the public to turn back thermostats to
sixty-five degrees during the day and fifty-five degrees at night.
Carter closed his remarks with a call for the nation's citizenry
to "help each other for the common good." This would be the
president's first, but certainly not his last, attempt to rally

* 54
the nation to
16James M. Naughton, "Schlesinger in Key Role Serving 3rd
President, New York Times. 22 April 1977.
54

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support his energy program.17
Until his fireside chat, Carter had not announced publicly
his ninety day time-frame to present a comprehensive energy
proposal, but he had made this directive clear to Schlesinger
weeks earlier. Carter insisted on the three-month deadline
because he believed that the urgency of the crisis warranted
quick action and would force Congress to act on the proposal by
the end of
1977. He wanted Schlesinger to develop a comprehensive rather
than piecemeal plan because it would provide the most effective
and rational way to deal with the problem, and he thought it
would insure that interest groups could not pick apart the
proposal easily. By making the policy an all-or- nothing
proposition, Carter hoped to force Congress to enact the policy
even if it contained certain provisions that might be detrimental
to certain local and state constituencies. Finally, Carter asked
Schlesinger to develop the plan in almost complete secrecy.
Involvement of existing government agencies would be kept to a
minimum, and the planners of the policy were to keep a safe
distance from the vast array of constituents who had a vested
interest in the program. With the exception of Schlesinger, other
White House advisers would be excluded from the process in order

55
to maintain its confidentiality. Carter hoped that
17Carter,
Keeping Faith, p. 93-5; Public Papers of the
Presidents—of ____ the United States: Jimmy Carter. 1977
(Washington, D.C.: Government Printing Office, 1978), pp. 69
55

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formulating the plan in this manner would keep press leaks to a
minimum and thwart efforts by interest groups to influence its
development.18
To the astonishment of those who considered him to be the
ultimate micro-manager, Carter then gave Schlesinger almost total
control over the process of policy design. In a scene reminiscent
of the old Johnson policy—planning task forces, Schlesinger
assembled a small coterie of hand-picked staff to assist him in
the formulation of policy. Schlesinger, however, did not base his
use of the task force on previous models; rather he saw it as
simply the most prudent machinery to use in the absence of a
Department of Energy.19 As a result, the Schlesinger task force—
officially known as the Office of Energy Policy and Planning
(OEPP)—differed markedly from the task forces of previous
administrations. Whereas the Johnson task forces always included a
Budget Bureau generalist as staff liaison, the OEPP had no
representatives from the Office of Management and Budget or even
the White House staff. Moreover, the OEPP1s membership consisted
primarily of economists and public administrators who had worked
with Schlesinger in the past—a stark contrast to the Johnson task
force model which 56
Carter, Keeping Faith, pp. 93 and 96; Hargrove, Jimmv

garter—as—President, p. 40; Cochrane interview; Author's
interview with Schlesinger; James Schlesinger Interview, PCP;
Stu Eizenstat Interview, PCP, p. 28.
Legislation to create a cabinet—level Department of

Energy would be enacted later in 1977.
56

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relied upon the technical expertise of academics, as well as
representatives from industry, government, trade associations, and
think tanks. With the exception of S. David Freeman, who had
authored A Time to Choose: America's Energy Future (1974), the
task force included no one with extensive technical expertise on
energy issues.20
Furthermore, in vivid contrast to Carter's commitment to
bring "fresh blood" and larger numbers of women and minorities
into administration posts—a commitment he largely honored—the
composition of the OEPP task force was overwhelmingly white, male,
and "insider oriented." Most were under forty and none had ever
worked in any energy- related industry. Physicist John F. Ahearne,
foreign affairs expert Harold E. Bergold, Jr., economist George R.
Hall, and Frederick P. Hitz had served under Schlesinger at the
Department of Defense. William A Morril, a career public
administrator, had worked with Schlesinger in the Bureau of the
Budget, and economist John F. O'Leary had assisted Schlesinger
during his tenure at the Atomic Energy Commission. Task force
chief of staff and former Environmental Protection Agency
assistant administrator Alvin L. Aim had not worked directly with
Schlesinger, but was described by newspaper reports as an "old

57
friend" of the
20
Schlesinger, interview with the author. For a
description of the Johnson task force model, see Hugh Davis
Graham, "Short-Circuiting the Bureaucracy in the Great Society:
Policy Origins in Education," Presidential studies Quarterly.
XII, pp. 407-420. ~
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energy adviser. Other task force members had connections to
prominent Democratic politicians. These included Roger D. Colloff,
former assistant for energy issues to then- Democratic Senator
(and energy price control proponent) Walter Mondale; Leslie J.
Goldman, an opponent of natural gas deregulation and former
assistant to Adlai Stevenson,
III; and Deborah M. Gottheil, former aid to Congressman Toby
Moffet (D-Conn.). Although lacking technical expertise, the
members of the task force shared Schlesinger's belief that the
federal government, not private industry, should serve as the
primary means of redirecting the nation1s energy consumption
habits. As a reporter for Time magazine noted, the task force
members could be described best "as keen- minded generalists in
the Schlesinger mold, more schooled in problem solving than in
energy." Rather than carrying on the tradition of the Johnson task
forces, Schlesinger had resurrected the Vietnam-era ghost of
Robert McNamara and his "whiz kids" at the Pentagon.21
21 •
With the exception of two women who held junior level
positions, the OEPP consisted of an all white-male membership.
Other members of the task force included: Jeffrey R. Cooper, an
economist who had worked briefly with Schlesinger at Johns
Hopkins' School of Advanced International Studies; Richard M.
Cooper, an attorney with virtually no government or energy
experience, who had served as one of Supreme Court Justice
William Brennan's clerks and—according to news reports—had
worked with highly influential Washington insiders in his law
practice; and Robert R. Nordhouse, a former Congressional staff
member, who had helped draft the 1975 and 1976 energy acts. For
more on the composition of the task force, see Edward Cowan,
New York Times. 27 April 1977; Robert G. Kaiser, "The Birth of
a Policy," Washington Post.23 April 1977, p. 1; "Jim's
Overnight Task Force," Time. 21 February 1977, p. 60.
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From its inception the OEPP faced a daunting task in
developing the comprehensive policy within the ninety-day deadline
mandated by Carter. The natural gas crisis placed yet another
constraint on the task force, forcing the OEPP to put together a
stop-gap emergency natural gas bill before beginning work on the
comprehensive energy policy. Once the gas bill received
congressional approval, members of the OEPP then faced the task of
organizing an administrative structure to speed development of the
policy. In mid- February, Schlesinger assembled his senior
advisers for their first meeting to begin in earnest the planning
of the new energy policy.
With the deadline for presenting the policy less than three
months away, Schlesinger assigned staff members general energy
policy areas to study (i.e. natural gas pricing, automobile
efficiency). Schlesinger directed them to formulate policy
proposals and present them in one-page option papers", containing:
(1) a description of the proposal; (2) a projection of energy
saved/produced by the proposal in the years 1980, 1985, 1990, and
2000; (3) the costs of the proposal to be borne by federal, state,
and local governments, and the private sector; (4) the costs per
barrel of oil equivalent saved/produced by the proposal; (5) the

59
potential political and administrative problems with the
5
9

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proposals; and, (6) the other options considered.22 Once
completed, the option papers would be distributed to the
other task force members for general discussion and
comments. The senior planners then would review and discuss
the papers before presenting them to Schlesinger. In an
action befitting his unofficial designation as energy czar,
Schlesinger would make the final decision to accept or
reject the proposal or to send it back to the task force for
further study.
By early March, Carter and Schlesinger had agreed upon the
general principles that would undergird the energy plan. The
central rationale for the proposed plan was to provide an orderly
transition from energy policy predicated on "cheap and abundant
energy used wastefully and without regard to international and
environmental imperatives to an era of more expensive energy with
concomitant regard for efficiency, conservation, international
and environmental concerns."22 The plan would redirect current
policies in order to facilitate this transition and reduce the
possibility of future economic and political crises caused by
sharp price increases, shortages, and supply disruptions.
Memorandum, Alvin L. Aim to Energy Policy and Planning

?^ff'n?ub2ect: Format for Energy Option Papers, 18 February 1977, [NE]
Plan Proposals and Memos 2/77-4/77," Box 16, James Schlesinger
Collection, Jimmy Carter Library.
^Memorandum, Jim Schlesinger to the President, Subject:

f^®rimi.Iiia,rY Overview of the Comprehensive Energy Plan, 9 March
' F2-an Pr^fts 3/77 (1)," Box 2, James Schlesinger
60

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To achieve this goal, Carter and Schlesinger identified four
general components the plan would embody. Conservation and the
more efficient use of energy resources would be the cornerstone of
the policy. Reduction of oil imports also would receive priority
in the Carter energy program, although the Ford and Nixon goals
for total energy independence from imported oil were discarded as
unfeasible. Reflecting Carter's interest in environmental issues,
Schlesinger and the president agreed that energy needs would be
balanced with environmental stewardship, even if this added to
energy costs or limited the program's options. The final component
of the plan, and potentially the most controversial, embraced the
proposition that "society must begin to value energy now at its
true value,"—in other words, the energy program must find a way to
raise the prices of non-renewable resources (Schlesinger and
Carter understood "true value" to be the world price of oil).24
With the administrative machinery and broad policy goals in
place, the OEPP staff began their work in earnest. Pressured by
the president's non-negotiable deadline, the task force toiled in
a frenetic environment. Most worked twelve-hour days, including
weekends. Schlesinger's leadership style did little to ease the
tensions they faced. Arriving at his office at seven a.m., he
usually did not leave until nine o'clock at night. He expected the
* 61
same
24 Ibid.
6
1

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from his staff. On occasion, Schlesinger would call a staff
member, present him with an extraordinarily complex policy
question, and expect an answer within minutes of posing the
question. Not surprisingly, one planner noted, "Every day here
seems like a week."25
Carter s insistence that the task force work in virtual
secrecy, combined with the planners' general lack of extensive
energy policy expertise, made their work difficult enough.
Compounding this problem, the far-reaching scope and complexity
of energy policy made economic impact and conservation analysis
exceedingly difficult. In order to overcome these obstacles,
Schlesinger hired five private contractors to assist the staff
and review policy options.26 Also, contrary to later reports, the
task force drew upon the expertise of the Federal Energy
Administration(FEA) to provide research data and analyze the
impact of potential policy initiatives. Finally, the OEPP
utilized the PIES (Project Independence Evaluation System)
computer analysis program developed by the Federal Energy
0R
3"Jim's
Overnight Task Force," p. 60.
26
,.vT__ contractors and their areas of policy review were:
(iJICF, Inc.: estimation of energy savings of proposed
conservation initiatives and macro-economic effects of
proposals; (2) EEA: review of transportation proposals,
°f new energy systems, and coal conversion
analysis, (3) ftjitre Corp.: general policy review; (4) Thermo-
MSStroQ: analysis of new processes for reducing energy
consumption; (5) Cordian Associates: analysis of electric
?nPPPYc?K^re2Ui^t0fY commission issues; Memo, Alvin L. Aim »?BP?P ffn
Subject: Contractor Support, 23 February 1977, [NE] Plan Proposals
and Memos 2/77-4/77," Box 16, James Schlesinger Collection, Jimmy
Carter Library.
62

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Administration during the Ford administration. With PIES,
planners could assess a policy proposal's impact on production,
cost, and consumption of energy.2^
As his staff toiled away in their offices, Schlesinger
maintained a relatively high profile within the administration.
He met privately with the president on at least a weekly basis to
keep him abreast of the task force's activities (although
Schlesinger later recalled that many of their discussions
pertained to matters other than energy policy—further
demonstrating the tight bond that had developed between the
two).28 In addition to their one- on-one meetings, Schlesinger
sent Carter a series of written weekly reports and submitted to
the president a variation of the option papers developed by the
staff and approved by Schlesinger. In the option papers given to
the president, Schlesinger described the option selected by the
task force, enumerated its advantages and disadvantages, and made
a recommendation based on the task force's analysis. The paper
concluded with a number of boxes (marked "approve," disapprove,
etc.) that Carter would check indicating whether or not the
specific policy should be included in the
AiVi? L; A/J‘m Ener3y

Policy and Planning Staff, ubject. FEA
Contacts/Working Relationships on the National
2/?794/77
4/77 iMKarTh 197A,"tNE1 Plan Pr°P°sals and Memos
r5hZr n w l6, James Schlesinger Collection, Jimmy Carter
Post 27 April 1977,alSer' The Blrth °f a Policy'" Washington P. 1 . '
28 Schlesinger Interview, PCP, p.10.
63

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overall plan. Through this process, Carter read and personally
approved almost every provision to be included in the final
policy.^
While Schlesinger was careful to keep Carter informed of
the task force's activities, neither he nor Carter extended the
courtesy to the president's domestic and economic advisers or his
cabinet officers. Although Schlesinger alluded to his staff's work
on the comprehensive energy plan at a February 28 cabinet meeting,
he refused to divulge any specifics of their activities. These
remarks at least contained more substance than his remarks at a
cabinet meeting the preceding week, when his only comments on
energy policy consisted of urging cabinet members to drive fuel-
®fficient cars. In mid—March Carter scheduled Schlesinger to brief
cabinet members, senior staff members and their families on energy
policy at an evening gathering in the White House movie theater.
Throughout the two-hour briefing, Schlesinger revealed few
specifics about the proposal being developed by the OEPP, choosing
instead to deliver a lecture on the history of the energy problem
and possible future energy scenarios. The performance enlightened
few and caused one aide to note the startling * 64
,, *. nA num5er of the weekly progress reports can be found in the

files of the Office of the Staff Secretary Collection, Jimmy
Carter Library. For an example of the policy option papers, see
Memo, James Schlesinger to President Carter, Subject: National
Energy Plan, 13 April, 1977, "4/18/77 (4)," Box 18, Office of
the Staff Secretary Collection, Jimmy Carter
6
4

without permission.
similarity between the energy czar and a "windbag."30
Although Carter wanted the actual policy-making
deliberations kept secret, he instructed Schlesinger's team to
solicit "wide input into the evolution of our energy policy." In
other words Carter wanted the task force to meet with a variety
of interest groups, individuals, and lawmakers to hear their
ideas about the energy problem. Carter did not mean for
Schlesinger to involve his staff in policy debates with
outsiders. The dialogue between the outside groups and the task
force would be one-sided, with task force members listening to
rather than discussing. As one Carter aide later noted, the
sessions contained no testing of the political waters" to
determine how important interest groups might respond to
specific policy initiatives.* 3 Whether Carter actually intended
for the OEPP to place meaningful value on these discussion
sessions or whether he saw them simply as a good public
relations strategy remains unclear. In any event, Carter agreed
with Schlesinger1s decision to delay meetings with affected
parties until late March or early April. With an April 20
deadline for the plan, the meetings would occur far too late
30
nargrove, Jimmy Carter as President, p . 49; Cabinet
Meeting Minutes, 21 February 1977, p . 4, "2/25/77 (2) " Box 10,
Office of the Staff Secretary Collection, Jimmy Carter Library;
Memo, James Schlesinger to the Cabinet, Senior White
.?ot/a,f//na^^PnUSes' Subject: Energy Briefing, 14 March
3/,14/77
Office of the Staff Secretary
Collection;
Windbag quote from Naughton, New York Times. 22 April 1977.
31 Cochrane Interview.
65

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in the policy making process to be of substantial use to his
energy planners.32
Regardless of the original intent behind Carter's call for
"wider input," it soon became clear that some type of public
relations effort on the energy plan was needed. Uncertainty over
what the plan might contain began to create turmoil in the
business community and financial markets. In March, investment
houses such as Reynolds Securities urged investors to exercise
caution until the administration "sort[ed] out these very
important, complex issues ton energy policy].33 Grumbling from
members of Congress also began to increase as so little
information emerged from Schlesinger's office. Perhaps most
importantly, Carter needed to begin rallying public support for
his proposed national energy policy. The absence of an immediate
tangible crisis and the higher energy prices the program would
bring about hindered the creation of any natural constituency for
the program. As a result, the administration sought a means to
increase public interest in and support for a national energy
policy.
The effort to heighten the public1s support for the
32 ^°/.?r^S.i;d?,nt Carter to
1Q„ I James Schlesinger, 3 February 1977,
2/3/77 (2), Box 5, Office of the Staff Secretary Collection,
Jimmy Carter Library; Memo, James Schlesinger to President
Carter, 8 February 1977, "2/8/77 (2)," Box 6, Office of the
Staff Secretary Collection.
33Charles
j. Elia, "Doubt about Energy Strategy Being
Mapped Is New Carter Linked Cloud Over the Market." Wall Street
Journal. 22 March 1977, p. 4. ----
66

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president's energy policy evolved into an ambitious, high profile
appeal directly to individual citizens for specific advice on
energy policy. In early March, Schlesinger—with Carter's
blessing—announced that the White House would organize ten
regional town meetings on energy issues. In addition, the task
force distributed energy questionnaires to 450,000 randomly
selected citizens. Much to the chagrin of the already overworked
energy planners, more than 28,000 questionnaires had been
returned by March 21. Clearly the staff would have little time to
integrate many of the suggestions in their policy formulation. At
the very least, however, the questionnaires provided the task
force members with some truly unique—if not outright bizarre—
solutions to the energy problem. Some of the more original
"citizen solutions" included: a ban on neon lights, placement of
traffic-driven electrical generators on highways, cancellation of
all speed boat races, the use of candles instead of electric
lights, improvement of nutrition to keep bodies warmer, the
darkening of the Las Vegas strip, construction of "laser fusion
power plants," and the creation of space colonies. Although the
public involvement campaign caused many to take notice of the
potential of a new energy policy, it is highly unlikely that it

67
resulted in any significant contributions to the policy-making
6
7

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process. 34
In addition to the public relations campaign directed
toward the general public, the Schlesinger staff in April began
to hold a series of "mini—conferences" with a variety of groups
that the energy policy would affect directly (i.e. consumer
groups, environmentalists, industry representatives, and state
and local officials). Here again, the task force organized the
functions as little more than arm's length consultations. OEPP
staff members participating in the meetings rarely revealed
specific and detailed policy options under consideration, but
instead talked in general terms about the goals of the energy
plan. The task force used these sessions primarily as occasions
to give interested parties some notion of the direction energy
policy would take, to allow the groups to make any
suggestions they had regarding energy policy, and to allay ______
if possible—any fears the groups might have about the Carter
energy plan. By no means did either the president or Schlesinger
intend to allow these forums to serve as backdoor entrances for
interest groups to influence the policymaking process. As Carter
reminded his chief energy adviser, "it is important that affected
industries [and groups] be involved in energy policy analysis—not

68
to
3Memorandum,
Rick Hutcheson to President Carter,
summa.r-y
of Schlesinger Memorandum, 12 March 1977,
3/ 6/77
(1)," Box 12, Office of the Staff Secretary
Collection, Jimmy Carter Library; The National Enemy Plan:
Summary of Public Participation (Washington, D.C.
Printing Office, 1977), pp. 39-44. Government
6
8

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accommodate their selfish interests, but so they can assess their
own future plans."35
The problem of involving Congress proved to be a more
vexing one for the task force. Criticism of Carter's and
Schlesinger's perceived unwillingness to work openly with the
legislative branch appeared as early as January 1977. Less than a
week after the inauguration, newly elected Senate majority leader
Robert C. Byrd (D.-W.Wa.) publicly castigated the administration
for failing to include him in energy policy consultations. Byrd
complained to the press that the president "has to learn that
there have to be a number of senators brought into a discussion on
any subject, and he [Carter] better let the leadership know about
these meetings so we can suggest the leaders involved."36 In spite
of Byrd's criticism, Carter and Schlesinger refused to open the
energy policy-making process, fearing that such participation
could cripple the comprehensiveness of the plan and allow it to be
picked apart by vested interests. Carter later argued that
criticisms like Byrd's and others were not accurate. The president
believed that the
Memo, President Carter to James R. Schlesinger, 5 April

1977, "4/7/77." Box 18, Office of the Staff Secretary
Collection; Schlesinger to Carter, Weekly Activities Reports. For
an example of the discussions held in the meetings, see Memo, Stu
Eizenstat and Kitty Schirmer to President Carter, Subject:
Consumer and Environmental Views on Energy, 1 April 1977,
"4/1/77," Office of the Staff Secretary Collection.
36Martin
Tolchin, "Byrd Hinting Strained Relations, Says Carter
Fails to Seek Advice," New York Times. 27 January 1977,
p. 1 .
69

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administration did consult adequately with Congress on energy
issues during this period, claiming that energy planners "worked
as closely as they could with Congressional leaders interested in
energy."37
To an extent, Carter was correct in arguing that the OEPP
consulted with congressional leaders. In particular, Schlesinger
consulted frequently—albeit on an informal basis—with Senator
Henry Jackson, chair of the Senate Energy Committee, and
Representative John Dingall, chair of the House Subcommittee on
Energy. More formal consultations with other members of the
legislative branch did not take place until the end of March and
early April, however, long after the task force had determined the
broad outlines of the policy. At Jackson's request, Schlesinger
finally met with the Democratic members of the influential Senate
Committee on Energy and Natural Resources on March 22—less than a
month before the plan's presentation. Although more meetings with
congressional members followed immediately thereafter, they tended
to deal in generalities rather than the specifics of the proposed
energy policy. Following his session with Schlesinger, New York
congressman Richard L. Ottinger complained, "[Schlesinger] didn't
give us anything in a definitive way. . .[he just] says they're

* 70
considering
37Jimmy
Carter Interview,
PCP.
70

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this and considering that."38
Members of the legislative branch were not alone in their
exasperation over the lack of information coming out of the OEPP.
With Carter's blessing, the policy planning process also had
excluded the president's own senior advisers.39 From the earliest
stages of the planning process, Schlesinger had guarded his
energy turf zealously and resisted any action that he felt
circumvented his control. Interior Secretary Cecil Andrus quickly
learned this lesson when Schlesinger intercepted the secretary's
natural gas policy suggestions to the president. In defending his
action, Schlesinger informed presidential adviser Jack Watson
that particular policy options should not be considered in
isolation from the rest of the OEPP's work and added that
Andrus's proposals already had been considered by the task force.
Schlesinger refused to discuss his planners' activities even with
Carter's most trusted advisers. Charles Schultze, chair of
Carter's Council of Economic Advisers, later noted that getting
information from Schlesinger "was like pulling teeth."40 Many of
Carter's senior staff, including Stu Eizenstat,
38
Memo, Fred Hitz to Energy Staff, Subject: JR Schlesinger
Appointments on Hill, "Testimonies 4/77," Box 3, James
Schlesinger Collection, Jimmy Carter Library; Steve Rattner,
"Congress Is Briefed by President's Aides on Energy Message," New
York Times. 9 April 1977.
39Author's
interview with Schlesinger.
40Charles
Schultze Interview, PCP.
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began to express great concern that as the April 20 deadline
approached they still knew little about what the task force was
going to present to the president.41
At the end of March, Schlesinger delivered a black briefing
book to the president with the OEPP's energy policy
recommendations—the core of the administration's soon-to-be
announced National Energy Plan (NEP). With less than four weeks
remaining before Carter's self-imposed deadline for presenting the
plan to Congress, the president and Schlesinger finally allowed
the senior staff to examine the OEPP's energy recommendations. The
contents of the black briefing book revealed a comprehensive
energy policy massive in both its breadth and complexity. Whereas
previous energy proposals under Nixon and Ford had favored
increased exploitation of existing energy sources, the NEP
stressed conservation through the centralization of federal energy
planning, higher prices for oil and natural gas, incentives for
energy conservation, major expansion of federal regulatory
authority over energy producers, suppliers, and consumers, and an
increase in federal expenditures for alternative energy research
and development. Policy proposals ranged from a "gas guzzler" tax
levied on the purchase price of low gas mileage cars to encourage

* 72
the purchase of more fuel efficient vehicles to tax credits for
41Memo,
James Schlesinger to Jack Watson, Subject: Cecil
Andrus Memorandum, 9 March 1977, "3/15/77 (2)," Box 12, Office
of the Staff Secretary Collection, Jimmy Carter Library; Stu
Eizenstat Interview, PCP.
72

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home insulation and the use of solar energy. A host of new federal
regulations would be implemented to strengthen the energy
efficiency standards for new buildings, automobiles, and even
kitchen appliances. New federal taxes would be placed on utilities
and industries that burned oil or natural gas rather than coal.
The two most important components of the plan—and
potentially the most politically explosive—centered on the issue
of oil and natural gas pricing. Rather than embracing outright
deregulation as a means of raising natural gas prices (and thereby
increasing production and discouraging consumption), the
Schlesinger proposal created a complex formula that continued the
labyrinth of interstate price controls on existing gas wells.42
New natural gas well prices would be subject to federal control on
both interstate and intrastate sales, but prices would be allowed
to rise to the energy equivalent cost of oil. Prices of new gas
subsequently would be adjusted for inflation and were anticipated
to rise to three dollars per thousand cubic feet by 1985.
I have yet to find a full explanation for Schlesinger' s

and Carter s decision to continue price controls on natural gas.
The proposal clearly violated Carter's pledge during the
campaign to deregulate gas. Although Carter never explained this
reversal, Schlesinger indicates in his Miller Center interview
that political pressure from Senator Jackson and Representative
Dingall caused him to abandon natural gas deregulation.
Likewise, Eizenstat identifies the influence of Dingell and
Jackson, but also speculates that members of Schlesinger s
planning staff influenced him to continue controls. James
Schlesinger Interview, PCP; Stu Eizenstat Interview, PCP.
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Schlesinger proposed an even more intricate procedure for
raising oil prices. The government would adopt a new three- tiered
pricing system for domestically produced oil. A price ceiling of
$5.25 per barrel for wells in production before 1975 (first tier
oil) would continue indefinitely.
Oil from new" or "second tier" wells (wells in production after
1975) would have a price ceiling of $11.28 a barrel, and oil from
"stripper" wells (wells producing 10 barrels or less per day)
would be allowed to sell at the world price.
As with natural gas pricing, the price ceilings of oil would be
adjusted to rise at the rate of inflation. Taking the final step
to bring domestic prices up to world oil prices, Schlesinger
created a crude oil equalization tax (COET) on oil sales to be
applied in three stages beginning in 1978. All proceeds from COET
would be passed back to the public in the form of tax credits.
COET allowed for an equalization of world and domestic prices, but
also lessened the economic hardship on American consumers through
the tax plowback.
Although Carter praised Schlesinger for doing an "excellent
job" on putting together the NEP, he also expressed concerns that
the complexity of the plan might inhibit its enactment. In
particular, Carter feared that while the massive scope of the plan
provided for broad distribution of its costs (a primary goal of
Carter's), it also made the plan virtually incomprehensible to
"the person in the street." Because of this concern, the president
instructed Schlesinger to work with domestic policy adviser
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Stu Eizenstat, Secretary of the Treasury Michael Blumenthal,
economic adviser Charles Schultze, and budget director Bert Lance
to "tie together" the plan. Still clinging to the notion of
confidentiality, Carter instructed his top aides to review the
work of the task force but pointedly instructed them not to share
the contents of the proposals with their respective staffs.43
The reaction of Eizenstat, Schultze, and Blumenthal was
decidedly negative. Eizenstat, whom Carter unofficially had
designated as the "keeper of campaign promises," expressed
amazement that Schlesinger had discarded Carter's campaign pledge
to decontrol natural gas prices. Treasury secretary Blumenthal
worried that the Rube Goldberg machinery of Schlesinger's price
control system unnecessarily delayed getting U.S. prices to world
levels, and fudged on the administration's commitment to other
western nations to raise domestic prices in order to reassure
world financial markets about the nation's ability to stabilize
its precarious energy situation. In particular, he argued that the
German and Japanese governments expected the U.S. to deregulate
prices completely and that the NEP failed to meet this
expectation. Vice President Mondale feared that higher fuel prices
and the new penalties and regulations on the automobile industry

* 75
would invite the enmity of organized
M / 43Memorandum, Carter to Schlesinger, 29 March 1977, 3/29/77,

Box 14, Office of the Staff Secretary Collection, Jimmy Carter
Library; Carter, Keeping Faj hh. pp. 96-97; Eizenstat Interview,
PCP, p. 28.
75

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labor, an essential constituency for the administration. As a
group, the president's senior economic and domestic policy
advisers took a wary view of a plan that they believed not only
continued regulation but increased the cumbersome administrative
rules governing energy policy. In particular, Eizenstat suggested
that Schlesinger's multitiered system of oil and gas prices "might
pose severe administrative problems."44
The economic impact of the program aroused the sharpest
criticisms from Carter's senior aids. Eizenstat cautioned the
president that the plan might have a cumulative inflationary
impact on the economy and noted that the higher domestic prices
the plan intentionally created might encourage OPEC to raise
prices even higher. The domestic policy adviser also emphasized to
the president that the plan's "impact on the economy must be very
carefully computed and considered."45 [Emphasis original.] When
Treasury Secretary Blumenthal and chief economic adviser Charles
Schultze finally obtained a copy of the draft several days later,
they reiterated Eizenstat's concerns about the program's economic
consequences in much harsher
Memorandum, Stu Eizenstat to the President, Subject:

Handwritten Notes on Schlesinger Draft on Energy Policy, 28-29
March 1977, "Energy Bill (2)," Box 198, Domestic Policy Staff
Collection, Stu Eizenstat Papers, Jimmy Carter Library;
Interview with Stu Eizenstat, PCP, p. 28; Cochrane Interview.
45Memorandum,
W.M. Blumenthal and Charles L. Schultze to
President Carter, 5 April 1977, "4/7/77," Box 16, Office of the
Staff Secretary Collection, Jimmy Carter Library.
76

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terms. Citing the absence of any substantive economic analysis
within the plan, an exasperated Schultze and Blumenthal argued
that the failure of the plan to include this analysis would doom
the policy's chances of enactment. They also expressed grave
misgivings about the inflationary impact of the program. If Carter
wanted to salvage the plan, they concluded, he could do so only if
he agreed to extend the deadline for its completion and provide
for the "expansion of the group involved in preparing the
proposal"- -a not so subtle reminder that they had been excluded
from the policy planning process.4®
The vociferousness of his advisers' objections apparently
caught Carter off guard. The comments of Schultze and Blumenthal
particularly irritated the president and caused him to complain
angrily to presidential assistants Frank Moore and Hamilton Jordan
that "[Schultze and Blumenthal] treat me like I'm an idiot." Yet
the Schultze-Blumenthal concerns could not be ignored. The
president's highest ranking economic advisers had leveled a
serious charge against the president's proposed energy plan and
had made an implicit attack against his trusted friend and adviser
James Schlesinger. What Carter considered his "most important
domestic priority" appeared to be in danger of falling apart
before it even reached Capitol Hill.

* 77
Carter, however, still had faith in both the plan and
46Ibid.
77

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Schlesinger and called for an emergency meeting of his senior
advisers. At 3:30 that afternoon, the president,
Vice President Mondale, Interior Secretary Cecil Andrus, Treasury
Secretary Blumenthal, and presidential advisers Schlesinger,
Schultze, Eizenstat, Moore, Jordan, and Watson assembled in the
cabinet room for the most extraordinary meeting of Carter's three—
month—old administration.^
For the next four and one-half hours, Schlesinger found
himself on the hot seat, as Carter's advisers questioned him
relentlessly about the various proposals contained in the energy
plan. The discussion became so spirited that on a break, Jack
Watson requested aspirin while Frank Moore called his secretary
and asked her to bring him "one of those little blue pills in my
desk." The central points of contention, the economic impact of
the policy and a debate over deregulation versus government price
controls, mirrored the energy debates in which political leaders
had engaged since the 1973 oil embargo. Although Eizenstat favored
continued controls on oil prices, he reminded the conferees of the
administration's campaign pledge to deregulate natural gas.
Schultze and Blumenthal criticized the plan for its complexity and
reiterated their earlier fears about the inflationary potential of
the plan. In essence, the meeting turned into the full White House
consultative process that Schlesinger previously had avoided. As
the
^Stanley Cloud, "With Jimmy from Dawn to Midnight, 18 n

Time. April 1977, p . 16; Presidential Schedule Files.
78

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debate continued for hours, Schlesinger vigorously defended the
plan and refused to alter its position on decontrol.
When the meeting finally concluded, Carter's faith in his energy
adviser remained as strong as ever. Speaking briefly to a reporter
for Time magazine outside the room, Carter noted that his advisers
"really took a lot of shots at Schlesinger. But [Schlesinger]
defended himself well. He is a very smart man."4® Though the
session reinforced Carter's confidence in the work of the task
force, several of his other advisers failed to share his renewed
enthusiasm. Schultze, Blumenthal, and Eizenstat still expressed
anxiety over the political and economic feasibility of the plan.
One exhausted adviser expressed his frustration as he walked away
to make a phone call. "Hell," he grumbled, "if Schlesinger does
what he wants to do, I'll never be able to go to Texas again in my
life."48 49
The crisis atmosphere that enveloped the task force's work
did not evaporate with the marathon April 6 meeting.
More specific details of the plan had yet to be worked out, and
time was running short. Schlesinger himself became worried enough
to ask the president for an extension of the ninety-day timetable.
The president refused. Because of this time constraint, the
already harried atmosphere at the OEPP became even more hectic and
tension-filled. Economic
48 i
Cloud, "With Jimmy from Dawn to Midnight," p 18;
Presidential Schedule File.
49Ibid.
79

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impact analysis continued to present a conundrum for the planners.
Even with the recent participation of the Treasury Department, the
Office of Management and Budget, and the president's Council of
Economic Advisers, the planners could not predict adequately the
impact the plan would have on the economy. On April 19, the eve of
Carter's deadline, the president held a last-minute staff meeting
with Schlesinger, several members of the task force, and a number
presidential assistants putting the final details on the plan. The
meeting finally adjourned at 12:20 a.m. At last, after ninety
days, the national energy plan neared completion.
Concurrent with the last-minute drafting of legislation and
his consultations with other members of the administration,
Schlesinger turned his attention to the task of congressional
salesmanship. In what would later prove to be something of an
understatement, Schlesinger dryly informed Carter that "a great
deal of work will be necessary to sell the national energy plan."
In order to "sell the plan" and blunt potential attacks that might
be levied against it, Schlesinger set up a series of meetings for
congressional leaders, labor, governors, consumer groups, industry
representatives, and environmentalists to be held during the week
of April 13. Unlike the previous sessions Schlesinger had
organized, however, these meetings were not designed to "invite
input." Instead, they would be confidential, detailed briefings on
the specific policies of
80

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the task force's energy proposal. Once again, the intent behind
these meetings was "to get all those groups who would be
potentially hostile [to particular parts of the plan] to hold
their fire." Somewhat naively, he also hoped that through these
sessions, he could convince the attendees to "applaud the boldness
of the plan and reserve judgement on specific details."5® As with
the last-minute refining of the legislation, these consultations
would continue until Carter actually presented the plan to
Congress.
Ninety-one days after his inauguration, Carter appeared
before a joint-session of Congress to unveil the National Energy
Plan. Calling on the nation and its legislators "to act now—
together—to devise and to implement a comprehensive national
energy plan to cope with a crisis that could otherwise overwhelm
us," Carter outlined the most sweeping energy policy proposal in
U.S. history.* 51
In all, the NEP featured 113 proposals to alter
American's energy consumption habits. Although the NEP would
result in higher energy costs in the short term, Carter conceded,
its implementation would reduce sharply the domestic energy growth
rate, drastically curtail oil imports, and achieve a ten percent
reduction in gasoline consumption by 1985.
Unlike past attempts at energy policy reform that emphasized
Memorandum, Jim Schlesinger to the President, Subject:

National Energy Plan, not dated (submitted to the President 21
March 1977), "3/21/77," Office of the Staff Secretary
51
Public Papers of the Presidents. 1977. p . 663.
81

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increased domestic fuel supplies through market deregulation, the
Carter program promoted conservation as the primary vehicle for
energy stability. His plan would create the higher prices sought
by Nixon and Ford, but would make the increases more politically
palatable by diverting a portion of the new revenue away from oil
companies and back to the consumer via the federal treasury. The
pricing schemes, though complex, eased the burden of price
increases on consumers, but also allowed producers additional
revenues. Like the president who advocated it, the plan sought a
rational means to increase conservation through higher costs, but
insure equity by distributing the costs broadly to consumers and
producers alike. As Carter noted in his Oval Office address two
nights earlier, the quest for a new national energy policy would
be "the moral equivalent of war" and the sacrifices required by
the plan would "be fair. No one will gain an unfair advantage
through this plan. No one will be asked to bear an unfair burden.
The task force's three—month policy planning ordeal had
finally ended. For a brief, fleeting moment, Carter and his
advisers could relax. Their respite would be short-lived, however,
as the job of selling the plan to the Congress and the nation soon
would become their primary task. As Schlesinger puffed on his pipe

* 82
in his White House office
52Pyblic
... Papers of the Presidents. 1977. p. 656 and p. 661 .
82

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after the president s congressional address, he knew that
the real battle lay ahead.
83

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CHAPTER IV
CARTER, CONGRESS AND THE NATIONAL ENERGY PLAN
On the morning of April 20, 1977, the day Carter unveiled
his National Energy Plan to Congress, the president followed his
usual routine, rising for an early breakfast and leaving before
seven a.m. for the short walk from the White House living quarters
to the West Wing. Eschewing the formal surroundings of the Oval
Office, Carter retreated to a small study and edited the speech he
would make before Congress that evening. As Carter annotated the
typed draft, he noted a comment from speech writer James Fallows
encouraging the president to mention that the date of the address
marked the two hundred and second anniversary of the battles of
Lexington and Concord. Fallows suggested that the president
include the anniversary in his speech as a way of reminding the
nation of the role patriotism and national unity could play in
overcoming seemingly overwhelming odds.
As a facetious afterthought, Fallows added that the date also
marked the sixteenth anniversary of the disastrous Bay of Pigs
invasion. Unfortunately for the Carter administration, events
would prove the latter anniversary a more appropriate analogy.1 * 84
•i / ^Memorandum, Jim Fallows to the President, 20 April 1977,

4/20/77 (3)," Box 19, Office of the Staff Secretary
Collection, Jimmy Carter Library. Ironically, neither the
battles of Lexington and Concord (April 19), nor the Bay of
84

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To a degree, Carter had reason to be optimistic about the
chances for swift congressional approval of the NEP.
For almost three months, the president had used his bully pulpit
in the White House to stress the need for a comprehensive energy
plan. The natural gas shortages of the winter of 1976-77
demonstrated the hardships that would result from any future
energy disruptions and gave credence to Carter's rhetoric. Also
supporting Carter's insistence on immediate action energy policy,
a CIA report released in April warned of world-wide petroleum
shortages by 1985.* 2
Furthermore, in his first dealings with
Congress on energy issues in February, Carter's proposed Emergency
Natural Gas Act received congressional approval in only six days.
His stand on energy also garnered favorable media coverage, with
many newspapers and magazine writers commending Carter for his
courageous leadership on such a difficult issue.
Finally, Carter continued to enjoy high approval ratings from the
American public. A Gallup poll conducted earlier in late April
placed his approval rating at seventy-one percent, while the
Harris poll measured an approval rating of seventy-five percent.3
Pigs Invasion (April 17) occurred on April 20.

2Richard Corrigan, "The CIA Survey," National .Tnnrnal 23
April 1977, p. 640. '
3Burton
I. Kaufman, The Presidency of James Earl Carter. Jrii.
(Lawrence, Kansas: University Press of Kansas, 1993), p.
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Although these factors contributed to a sense of confidence
in the White House, Carter at least partially realized the
difficulty the NEP would encounter. Since he first directed
Schlesinger to develop an energy policy, Carter had displayed an
intense suspicion of organized special interests groups and the
threat they posed to his national energy policy. In his nationally
televised energy address on April 18, he warned the American
public that "[w]e can be sure that all the special interest groups
in the country will attack the part of the plan that affects them
directly."4 Also, despite the president's personal popularity,
polling data raised questions about Carter's plan to rely on
substantial public support for the NEP. According to a series of
Gallup surveys, the American public remained evenly divided over
the existence of an energy crisis.5 Most daunting of all to the
plan's successful implementation, however, was the gauntlet of
congressional committees awaiting the bill on Capitol Hill.
Although Carter's party controlled both the Senate and the House,
the
4Public Papers of the Presidents of the Hnited States:
Jimmy Carter, __ 1977. (Washington, D.C. : Government Printing

Office, 1978), p. 661.
5A
Gallup poll released on April 14, 1977 indicated 41% of
those polled viewed the energy situation as "very serious."
Polling results from other dates during the year indicated
similar opinions, although those viewing the problem as "very
serious" declined as the year progressed: June 2, 44% viewed
energy problem as "very serious"; June 23, 40% "very serious";
September 8, 38% "very serious"; George H. Gallup, The Gallup PP-
llj . 1977 (Wilmington, Del.: Scholarly Resources, 1978), pp.
1045-46, p. 1103, p. 1118, and p. 1185.
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of the bill, its short-term tangible costs, its long-
term intangible benefits, and its attempts to alter drastically
the business practices of some of the largest and most powerful
industries in the country jeopardized hopes for easy passage.
Furthermore, the NEP's central conservation mechanism—higher
energy prices through taxation schemes had little appeal to energy
interests, the Congress, or the public. As one analyst noted,
unlike earlier government programs that did things for people,
"Carter's proposals will do things to people."6
Not surprisingly, reaction to the administration's program
was mixed. Many Republicans charged that Carter's program
represented yet another ill-fated attempt to use big government to
solve problems best left to private industry. Oil interests fumed,
claiming that the NEP would "aggravate rather than alleviate
domestic petroleum shortages." Texas Governor Dolph Briscoe
charged that the NEP "is like a cocked gun" aimed at energy
producing states, while General Motors Chairman Thomas Murphey
concluded that the policy was "rash, ill-conceived and ill-
prepared." The GM boss also added that the gas guzzler tax was
"the most simplistic, irresponsible proposal ever made" (a comment
to which Carter s Energy advisor James Schlesinger responded: "I
guess what's good for General Motors is still not
6Bob
Rankin, "Carer's Energy Plan: A Test Of
Leadership,
" Congressional Quarterly Weekly 23 April 1977, P-
727.
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necessarily good for the United States"). Even labor unions,
traditional supporters of Democratic party policies, expressed
dismay over the plan. Construction union leader Robert Georgine
for instance, claimed the plan contained "some serious
shortcomings" and would lead to the loss of thousands of jobs.7
Others, however, responded positively to Carter's proposal.
Republican Governor James Thompson of Illinois praised Carter's
courage in addressing the energy issue, while even an automobile
executive, AMC Chairman Roy Chapin declared the program "a
sensible approach" to the energy problem (not coincidentally,
Chapin's company specialized in the manufacture of compact, fuel
efficient cars). Environmental and consumer groups also expressed
their support for the plan. Perhaps most encouraging to the
president, an ABC New/Harris poll taken after his address
revealed that Carter's approval rating had increased three points
rather than dropping as the president and his advisers had
feared. Read carefully, however, the poll raised serious concerns
about some of the more crucial aspects of the program. In
particular, a majority of those polled expressed opposition to
the standby gasoline tax—a central provision of the bill—and
sixty—two percent of them * 88
Quotations taken from: "The Energy War," Time 2 May 1977,

pp. 10-14; Allan J. Mayer, "The Battle Begins," Newsweek 9 May
1977, pp. 22-24; Rankin, "Carter's Energy Plan," p. 732.
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felt that the plan did not provide for "equality of sacrifice."8
From the time he first directed Schlesinger to develop the
NEP, Carter had believed that its eventual success would depend
on his ability to mobilize the American public in support of the
plan. As governor of Georgia, he frequently had appealed to the
public to pressure the state legislature to enact comprehensive
policy proposals.9 This same thinking had undergirded his
original approach to energy policy, but in the interval between
his initial instructions to Schlesinger and the presentation of
the policy, Carter had come to realize, at least in part, that
dealing with Congress would take more than simply making public
appeals. For the bill to become law, Carter, the self-proclaimed
political outsider, very quickly would need to learn to play by
Washington insiders' rules.
To sell his program, Carter and his aides developed a

multi~pronged
attack that sought to galvanize the support of both
the public and the Congress. The public mobilization effort
consisted of a series of meetings and events to publicize the
president's plan. Administration officials
8
Chapin quoted in Rankin, "Carter's Energy Program," p 732;
Thompson quoted in "The Energy War," p. 10; Polling data cited in
"The Energy War," p. 14.
9In
his effort to reorganize Georgia's state government,
Carter met regularly with the citizens groups and undertook a
massive public relations campaign to induce the recalcitrant
state Senate to enact his reforms. Kaufman. The Pres idem™ r»f
James Earl Carter. Jr., p . 10. --
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began to contact all fifty of the nation's governors and the
mayors of every city with a population over 200,000 to provide
information about the bill and to seek their support for it.
Media advisor Gerald Rafshoon contacted prominent business
supporters of Carter and asked them to place full- page
advertisements in major metropolitan newspapers supporting the
plan. Cabinet members and other administration officials made
appearances on news shows and followed Carter's directives to
work energy into as many of their public addresses as possible.10
In concert with this massive public relations effort, the
administration also lobbied for the program in Congress. Unlike
previous administrations that relied on centralized congressional
lobbying, however, Carter chose to utilize a collective strategy
that lacked a strong central coordinator. This type of
organization reflected Carter's distrust of a centralized White
House staff, which he believed had contributed to the abuses of
power during the Nixon administration.11 The administration's
energy lobbying would involve a group effort spearheaded by
congressional liaison Frank B. Moore, energy advisor James
Memorandum, Mark Siegel to the President, Subject:

Public/Political Mobilization—Energy, 18 April 1977, "4/20/77
[4]," Box 19, Office of the Staff Secretary Collection, Jimmy
Carter Library.
11See
Q. Whitfield Ayres, "The White House Staff," in The
Carter Years: The President and Policy Making, ed. M. Glenn
Abernathy, Dilys M. Hill, and Phil Williams (New York: St.
Martin's Press, 1984), pp. 150-151.
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Schlesinger, and their respective staffs (which were relatively
small given the scope of the task before them). Carter also
insisted that the cabinet take an active role in the effort,
lobbying Congress wherever and whenever they thought
appropriate.12
Despite Carter's insistence on a decentralized lobbying
effort, Moore tried to steer the president to a more structured
process. Moore, who had served as Carter's legislative liaison in
Georgia, had no Washington experience and already had acguired a
reputation among legislators as ineffective, inefficient, and
inept in dealing with Congress. Less than a month after Carter's
inauguration, House Minority Leader John J. Rhodes (R-Ariz.)
publicly complained that Moore and the administration displayed
"a complete lack of understanding of how the Congress works and
the proper relationship [between the Congress and the White
House]. in seeking a more structured process for the energy bill,
Moore undoubtedly hoped to avoid his earlier missteps on Capital
Hill. A successful strategy for a national energy plan, Moore
told the president, must have one voice, one focal point," and he
requested that one person be designated a "project coordinator."

* 91
Carter,
12Memorandum,
Frank Moore to the President, Subject: Weekiy
Legislative Report, 23 April 1977, "4/23/77," Box 20, Office of
the Staff Secretary Collection, Jimmy Carter
^Mercer Cross, "Carter and Congress: Fragile

^'®”ers“1P' Congressional Quarterly. 26 February 1977, p.
JU6 •
91

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however, remained committed to his notion of a strong cabinet
government leadership organization, dismissed Moore's
suggestions, and reminded Moore that Schlesinger, Mondale, and
their respective staffs, as well as the president himself, would
participate equally in the effort.14
With the loose structure of the congressional lobbying
team in place, the administration was confronted with several
potentially crippling problems. The first dealt with the plan
itself. As noted previously, because of the speed and secrecy in
which Schlesinger and his staff developed the NEP, the
president's economic advisers could not review the projected
economic impact of the plan until shortly before Carter presented
it to Congress. Even after Carter submitted the plan to the
legislative branch, the administration still could not provide
consistent estimates of its economic effects. On April 29,
Eizenstat convened a meeting of Carter's economic advisers in a
belated attempt to develop a realistic and consistent set of
numbers.
Because of the central role of taxes in the NEP, the question of

92
its economic impact would play a central role in
1
^Memorandum, Frank Moore to the President, Subject:
Strategy for National Energy Plan, 27 April 1977, "4/29/77," Box
21, Office of the Staff Secretary Collection, Jimmy Carter
Library.
9
2

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the upcoming debates—as would questions about the
administration's economic calculations.15
Overview: The House and Senate Leadership Structural
changes in Congress and the scope of the NEP posed more serious
threats to the legislation's enactment, however, than the lack of
consistent economic figures on its impact. As Carter recognized,
the NEP was one of the most complicated legislative packages ever
presented to the Congress. The plan's reliance on higher energy
prices through continued regulation was likely to arouse
opposition from three groups: conservatives in both parties
opposed to any form of government regulation, Democrats from oil
and gas producing states whose constituencies favored
deregulation, and liberal Democrats from consuming regions who
abhorred the prospect of supporting higher energy prices. Giving
opponents to the plan additional strength, organizational reforms
in Congress in the early and mid- 1970s had weakened the power of
senior committee chairs, decentralized the decision-making process
and given new power and authority to subcommittee chairs. As a
result of the reforms, subcommittees with overlapping
jurisdictions proliferated—a situation that inevitably slowed the

93
Memorandum, Stu Eizenstat to the President, Subject:

Budget and Economic Impact of Energy Plan, 29 April 1977,
"4/29/77," Box 21, Office of the Staff Secretary Collection,
Jimmy Carter Library.
9
3

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progress of legislation through both the House and Senate.16
Because of these reforms and the breadth of the NEP, the bill
faced the prospect of hearings in as many as seventeen committees
and subcommittees in the House alone—a ripe feeding ground for
interest groups seeking to alter specific portions of the plan.
Carter strongly believed that if the plan became bogged down in
Congress, the momentum behind it would be destroyed, and the bill
would fail to emerge from committee hearings intact. In order for
the bill to get through Congress in a short amount of time,
Carter desperately needed the assistance of the Democratic
congressional leadership—in particular that of House Speaker
Thomas P. "Tip" O'Neill and Senate Majority Leader Robert Byrd.
In many ways, Jimmy Carter and Tip O'Neill seemed rather
unlikely allies. During the presidential campaign, candidate
Carter frequently expressed his belief in the corruption of the
Washington political structure and stressed his Georgia roots,
his outsider status, and his aversion to political machinations.
O'Neill, on the other hand, seemed to represent everything
candidate Carter campaigned against. A product of the Boston

* *
Democratic
16For an overview of congressional reforms, see Samuel C.
Patterson, The Semi-Sovereign Congress," in The New American

Political System, ed. Anthony King (Washington, D.C.: American
Institute for Public Policy Research, 1978), pp.
* ll77; Nelson w - Polsby, "Political Change and the Character of
the Contemporary Congress" in The New American Political System,
2nd Version, ed. Anthony King (Washington, D.C.: The AEI Press,
1990), pp. 29-46.
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machine, O'Neill had served in the House of Representatives since
1952. His jovial charm and mastery of persuasion earned him the
respect of both his colleagues and the press and led to his
election as Speaker of the House in January 1977. An unabashed
supporter of "Great Society liberalism," O'Neill had little
tolerance for Carter's pronouncements that government could no
longer be all things to all people. While Carter attempted to
bring the Democratic party to the center of the political
spectrum, O'Neill sought to preserve and strengthen its liberal
wing. No one better represented the stereotypical Washington
insider than the broad-waisted, ruddy-faced, cigar-chomping
O'Neill, and yet O'Neill would be one of Carter's staunchest
supporters on energy policy.
As early as December 1976, O'Neill had decided that one of
his first tasks as Speaker would to create a special ad hoc
committee on energy issues. Arguing that the numerous committees
with jurisdiction over aspects of energy policy hampered enactment
of energy legislation, the Speaker hoped a single committee could
enhance the House's ability to deal with energy policy.17 Not
surprisingly, O'Neill's plan initially encountered resistance from
members of committees and subcommittees whose power would be
threatened by an ad hoc energy committee. By April 21, however—the
day after Carter's energy address before the joint session—the

* 95
House
Thomas P. Southwick, "Barons Gone: House Changes

Complicate O'Neill's Vow to Become 'A Strong Speaker,'"
Congressional Quarterly. 25 December 1976, p. 3366.
95

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agreed to support a compromise agreement on the Speaker's "energy
super-committee." Under the terms of the compromise, the ad hoc
committee would refer components of the NEP to the appropriate
standing committees. The Ad Hoc Committee would have "secondary"
jurisdiction of the legislation and could review decisions of
standing committees and intervene to resolve jurisdictional
disputes. Following standing committee action, the Ad Hoc
Committee would put the individual components of the NEP back
together as a single piece of legislation, so it could be voted
on as a package by the full House. Additionally, while the
committee did not have the power to change the recommendations of
standing committees, it did have the authority to recommend
amendments for consideration on the floor. To avoid delays by
opponents of particular components of the plan, O'Neill set a
July 13 deadline for standing committees to complete work the
NEP. If a committee failed to take action by the deadline, the Ad
Hoc Committee would take over consideration of the legislation.18
0 Neill also took great care in selecting the members of the
committee. A Congressional Quarterly survey found
18
ôr a description of the Ad Hoc Energy Committee's
structure, see Bruce I. Oppenheimer, "Policy Effects of U.S.
House Reform: Decentralization and the Capacity to Resolve Energy
Issues," Legislative Studies Quarterly. Vol. V February 1980, pp.
20-21; See also Bob Rankin, "House Energy Committee: Plan Quietly
Revised," Congressional Ouarterlv. 12 February 1977, p. 288.
-------
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that "a solid majority [of the committee's members] have in the
past supported higher taxes on gasoline, continued regulation of
prices on oil and natural gas, stringent controls over strip
mining, and similar proposals that indicate a philosophical
compatibility with the President's approach to energy policy."19
Although he had to include certain powerful committee chairmen
such Al Ullman (D-Or.) from Ways and Means, Morris Udall (D-
Ariz.) from Interior, and Energy Subcommittee Chairs John Dingell
(D- Mich.) and John E. Moss (D—Calf.), O'Neill successfully made
the group reflective of the House in terms of geographical and
committee representation, thereby giving the committee added
legitimacy as a body representing the entire House. Although most
of the committee's 13 Republican members had supported
deregulation of energy prices and incentives for production
rather conservation, they were outnumbered by a substantial
margin by the committee's 27 Democrats.20 In
1
Congressional Quarterly Almanac. 1Q77r p.722.
20The
committee had 40 members—27 Democrats and 13
Republicans. Eleven members also served on the Commerce
Committee, ten on the Ways and Means Committee, and five on the
Banking Committee. Other committees represented included*
Government Operations, Public Works, Interior and Insular-
Affairs, and Science and Technology. Geographically, 10 members
represented eastern districts, 11 each from the south and
midwest, and eight from the west. Democrat members included:
chairman Thomas L Ashley (Ohio), Richard Bolling (Mo.), Harley
0. Staggers (W.Va.), Henry S. Reauss (Wis.), Charles A. Vanik
(Ohio), Paul G. Rogers (Fla), John D. Dingell (Mich.), Al Ullman
(Ore.), John Young (Tex.), Dan Rostenkowski (111.), James C.
Corman (Calif.), Morris K. Udall (Ariz.), Joe D. Waggonner, Jr.
(La.), Jonathan B. Bingham (N.Y.), Thomas S. Foley (Wash.), Bob
Eckhardt (Tex.), Walter Flowers (Ala ), Mike McCormack (Wash.),
Charles Wilson (Tex.), Joseph L.
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addition, the Independent Petroleum Association of America
(IPAA), an industry lobbying group that favored decontrol and
reduced government regulation of energy producers, gave low
ratings to a majority of the committee's membership. Fourteen of
the ad hoc committee's members received a rating of 0 (on a 0-100
scale) from the IPAA, and a total of 21 members received a score
of 35 or less.21 Despite differing political views on certain
issues, O'Neill's strategic maneuvering in the House would prove
beneficial to NEP'S chances of passage. Carter could not have
found a stronger ally for his energy plan than the Speaker from
Massachusetts.
Unfortunately for the president, his relationship with
Senate Majority Leader Robert Byrd was weaker than his
professional and personal relationship with the Speaker. In
comparison to O'Neill, Byrd appeared ill-equipped to be the
leader of his party in the Senate. Elected to the Senate in 1958,
the former small-town grocer from West Virginia
Fisher (Va.), Toby Moffett (Conn.), Phil Sharp (Ind.), and Paul
E. Tsongas (Mass.), Barbara A. Mikulski (Md.), Austin J. Murphy
(Pa.),
Republican members included: Mickey Edwards (Okla.),
Newton I. Steers, Jr. (Md.), John B. Anderson (111.), Clarence
J. Brown (Ohio), Frank Horton (N.Y.), John W. Wilder (N.Y.),
Garry Brown (Mich.), William Steiger (Wise.), James M. Collins
(Tex.), Barry M. Goldwater, Jr. (Calif.), Bill Archer (Tex.),
James G. Martin (N.C.), and Carlos J. Moorhead (Calif.).
"Interest Groups Rate Ad Hoc Energy Panel Members,"

Congressional Quarterly. 16 July 1977, p. 1436. The IPAA based
its score on fifteen energy votes in 1975 and 1976. The higher
the score, the more the interest group favored the member's
voting record. Four members were serving their first term and
had yet to receive a rating from the IPAA.
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diligently and quietly rose through the leadership ranks.
In 1971, he upset Senator Ted Kennedy for the position of Majority
Whip and won the majority leader's post in 1977 following a bitter
contest with Senator Hubert Humphrey. Unlike the charismatic
O'Neill, Byrd displayed little public charm and often appeared
uncomfortable and grim-faced when speaking in public. A number of
his colleagues refused to support him for majority leader because
of their concerns that he lacked leadership ability. (Byrd,
however, dismissed questions about his style and abilities saying,
"[a]s Popeye used to say, 'I yam what I yam and that's all I
yam.'")22 23
Conversely, senators who disliked the strongarmed
leadership of autocratic committee chairs in the fifties and
sixties undoubtedly welcomed a less powerful majority leader like
Byrd.
Byrd and Carter already had been at odds over what the
majority leader perceived to be the president's ineptitude in
dealing with Congress. Speaking to reporters just six days after
Carter's inauguration, Byrd complained that the administration
needed to consult with the "leadership" more frequently.22
Reiterating this complaint four days before Carter's April 20
congressional address on energy, Byrd warned the administration
that it could not treat the Senate
22Richard
E. Cohen, "Byrd of West Virginia—A New Job, A New
Image," National Journal. 20 August 1977, p. 1292.
23Martin
Tolchin, "Byrd, Hinting Strained Relations, Says
Carter Fails to Seek Advice," New York Times. 27 January 1977,
P. 1 .
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as it had the Georgia legislature and criticized Carter for not
adequately consulting the Senate during the development stages of
the NEP. Although Byrd said he shared the president's concern
over the energy situation, he believed reaching a consensus in
Congress would be almost impossible.24
Unlike O'Neill, Byrd also held little faith in any attempt
to circumvent the usual committee structure in debating the NEP.
Maintaining a sense of independence from the White House, he
argued against those who saw his role as the president's "point
man" in the Senate and refused to appoint a special committee to
shepherd the bill through the upper house. He pledged to the
administration only that he would try to prevent the division of
the bill into more than two major parts. Interestingly, despite
Byrd's repeated statements in the press playing down the oft-made
comparisons between his leadership abilities and those of the
House Speaker, he privately told Carter's legislative aides that
he feared any embarrassment that would result from the speedy
passage of the bill in the House while it bogged down in the
Senate.25 * 19
Memorandum, Dan Tate to the President, Subject: Conversation

with Senator Robert Byrd, 18 April 1977, "4/18/77
[2], Box 18, Office of the Staff Secretary Collection, Jimmy
Carter Library.
2^Memorandum,
Frank Moore to the President, 25 April
1977,
4/25/77 [1]," Box 20, Office of the Staff Secretary
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The NEP and the House of Representatives Byrd's
concern about the House quickly taking the lead on energy policy
proved prescient. On May 4, the House Ad Hoc Select Committee on
Energy, led by Ohio representative Thomas L. "Lud" Ashley, held
its first hearings on the Carter proposal with Schlesinger
testifying. Ashley, who had not taken an active stance on energy
issues in the past and had never chaired a full committee during
his twenty— tenure in Congress, was well—liked by his colleagues
and enjoyed a close relationship with the Speaker. Widely viewed
as a master legislative tactician, Ashley also shared Carter s
belief that the enactment of energy policy required lawmakers to
rise above parochialism and "act in the national interest."26 To
further enhance the committee's Productivity and assist its four
full-time professional staff members, the committee temporarily
appropriated professional staff members from Commerce and Ways and
Means, a tax expert from the Joint Committee on Taxation, and a
special representative from the Speaker's office. As their work
began, O'Neill, fearful that the legislation might encounter
resistance, made clear that he would not tolerate any delays in
the timetable for approval. Early in the proceedings he warned
each member "I'll be biting your ass to make sure you keep going.
. .my reputation, our party's
26"NOW
Its Up to Congress,'
Time, 2 May 1977, pp. 12-13.
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reputation, and the reputation of the Congress are all tied up
with this legislation. You've got to get it out."27.
And get it out they did. The Ad Hoc Committee referred
roughly half the bill's proposals to the Interstate and Foreign
Commerce Committee and roughly another half—those involving tax
provisions—to the Ways and Mean Committee. Three other committees
considered the remaining proposals.28 Under the pressure of
O'Neill's July 13 deadline to report the legislation back to the
Ad Hoc Committee, most of Carter's proposals proceeded rapidly
through committee hearings. This is not to say, however, that the
NEP went unchallenged. As in the past, the debate over natural gas
pricing proved particularly contentious.
The Energy and Power Subcommittee, which had jurisdiction over
natural gas pricing, was chaired by John D. Dingell of Michigan,
an advocate of price controls who had spear—headed the fight
against the Ford administration's energy deregulation proposals.
Countering Dingell's support of the NEP s natural gas pricing
system, however, were ranking
Thomas P. O'Neill, Jr. with William Novak, Man of the

House: The Life and Political Memoirs of Speaker Tip O'Neill (New
York: Random House, 1987), p. 323. See also Bob Rankin, Energy
Committee: A Race Against Time," Congressional Quarterly 16 July
1977, pp. 1435-39.
28 •
The Banking, Finance and Urban Affairs committee had

jurisdiction over the home insulation loans proposal;
Government Operations oversaw a proposal for government van-
pooling; and, Public Works and Transportation worked on the
plan s program for the installation of solar technology in
government buildings; Bob Rankin, "Energy Committee: A Race
Against Time," Congressional Quarterly. 16 July 1977, p . 1435.
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minority member Clarence J. Brown (R—Ohio) and influential Texas
Democrat Robert Krueger, both of whom embraced decontrol of the
oil and gas industries. Despite the lobbying of the
administration, the deregulation proponents achieved a momentary
victory on June 9 when the committee voted against Dingell's
position and narrowly approved (12— 10) Krueger s proposal to
deregulate gas prices. Five Democrats sided with the committee's
seven Republicans in rejecting the NEP's gas proposal.29 103
On the same day, Ways and Means soundly rejected (IQ- 27)
Carter's standby gasoline tax (a proposal that would place an
additional federal tax on gasoline sales at the pump if targeted
energy consumption goals were not met). Democrats from rural
areas joined with Republicans to vote against the tax,
complaining that it unfairly penalized their constituents, who
had to drive long distances and had little access to public
transportation. The Ways and Means Committee also approved (24—
13) a weakened version of the gas guzzler tax (a proposal that
placed additional taxes on the sale of inefficient automobiles).
Many of the Democrats opposed to the administration's original
gas-guzzler tax represented urban districts with large numbers
of automobile industry employees. They argued that the tax would
act as a subsidy for higher-mileage imported cars, thereby
adversely
29Judy
Gardner, "Carter
Difficulty in Two House Panels, Energy Program Runs Into "
June 1977, pp. 1137-1138. Congressional Quarterly. 11
10
3

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affecting the sales of American automobiles and potentially
causing American auto workers to lose their jobs.30
Although the natural gas vote and the tax changes
represented serious challenges to the NEP, both the

or
administration and O'Neill continued to fight for the i9inal
program's approval. A slew of administration representatives,
from cabinet secretaries to departmental liaisons, pressured
individual legislators to uphold the president's original
proposals. Carter himself brought influence to bear whenever
necessary, going as far as having a photo session with the West
Virginia Strawberry Queen as a courtesy to the Chair of the
Interstate and Foreign Commerce Committee, the committee which
oversaw the natural gas legislation. On another occasion,
responding to a request from Frank Moore to phone Marc Marks
(R-Penn.) and encourage him to vote for the original NEP plan,
Carter not only phoned the legislator, but instructed Rosalynn
Carter to have their daughter Amy invite Marks's daughter to the
White House.31 Carter also remained
Judy . GardnerV Carter Energy Program Runs Into Difficulty
in Two House Panels," Conaressional Ouarterlv. 11 June 1977, pp.

1137-1138. -------
31Memorandum,
Frank Moore to the President, "Photo Session
with West Virginia Strawberry Queen," 18 May 1977, 5/20/77,' Box
Library; Memorandum, Frank Moore to the President, 28 June 1977,
"6/28/77 [2]," Box 34, Office of the Staff Secretary Collection,
Jimmy Carter Library; Handwritten Note, President to Mrs.
Carter, 28 June 1977, "6/28/77 [2],"
Box 34, Office of the Staff Secretary Collection, Jimmy Carter
Library.
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upbeat publicly, refrained from criticizing the House, and
proclaimed his faith that initial setbacks would be reversed.32
The administration's lobbying of Congress in general and
its work with Dingell in particular achieved its greatest success
when the full Commerce committee adopted 22—21 Dingell s amendment
to restore the administration's original natural gas pricing
proposal at the end of June, thereby overturning the earlier vote
for deregulation by the ^*n®r9y and Power Subcommittee. National
Journal energy analyst Richard Corrigan gave Carter credit for the
victory, noting that the president had succeeded in defining the
debate as a choice between the nation's future and "nefarious"
special interests.33 As O'Neill's deadline of July 13, 1977
approached, the committees concluded their reviews of the NEP. All
of the House committees completed their work on schedule except
for Interstate and Foreign Commerce, which missed O'Neill's
deadline by one day. At this point, the Speaker's carefully
selected Ad Hoc committee took over and zealously guarded the
program against unwanted amendments on the floor. With little

* 105
delay, the committee made some final modifications to the
32P.U.blic Papers of
the Presidents: Jimmv Carter. 1977
D*c-: Government
Printing Office, 1978), 13 June
1977 News Conference, p. 1103.
33Richard
Corrigan, ^"Carter'
Momentum on Capitol Hill
1068. s Energy
Plan Is
Gaining "
1 National
0 Journal.
5 9 July
1977, p.

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NEP and prepared to bring the bill as a whole to the floor for a
vote. When the Ad Hoc Energy Committee presented the bill to the
full House, Carter's NEP had survived largely intact.
Last-minute challenges to the crude oil equalization tax
(COET) and natural gas pricing marked the most contentious
moments of debate preceding the final vote. An effort to kill
COET, led by oil state Democrats,
Republicans, and liberals concerned about the effect of higher
prices on consumers, failed on a narrow 203-219 vote. The close
vote and the unusual coalition of interests against COET
demonstrated the delicate middle ground the administration had to
capture if the NEP was to be enacted.
A more serious threat faced Carter's natural gas proposal, as
deregulation proponents Brown (R-Ohio) and Krueger (D- Tex.) once
again pushed a proposal to phase out price controls completely.
Carter's supporters, however, held fast. After four hours of
debate, O'Neill—in an unusual move spoke from the floor,
exhorting his colleagues to vote against big oil," and the
"influx of [energy] lobbyists."34 35

As he slapped his hands
together and waved his arms, the Speaker shouted for approval of
the NEP and declared that "the future of this nation ... is at
33
stake. The majority of his colleagues responded with
34Bob Rankin, "House Gives Carter Major Energy Victory "
Congressional Quarterly. 6 August 1977, p. 1627.

35Ibid.
106

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vigorous applause, debate ended, the House rejected the gas
deregulation amendment, and voted in favor of the National Energy
Act 244—177 on August 5.
Carter had achieved the first major legislative triumph of
his administration. Since the Arab Oil embargo in 1973, two
administrations and the Congress had struggled to enact energy
policy reform, but with little success. Political analysts hailed
the House's action, marvelling that what normally would have taken
at least a year to get through had completed its course in a
matter of months. But the fight for a national energy policy was
far from over. The NEP faced debate in the Senate and then a joint
House-Senate conference. Furthermore the House hearings, brief as
they were, had provided signs of problems with the bill that would
cause additional trouble in the Senate. Although the House had
approved the NEP, throughout the accelerated approval process many
members had voiced reservations about the administration's
estimates of the plan's economic effects. By the August vote,
questions about the validity of the economic projections contained
within the NEP had become common. As early as May 30,
congressional liaison Moore had warned Carter that many in the
House and Senate expressed concern over the "lack of specific
numbers on the economic impact of the plan." Additionally,
congressional leaders told Moore they did not believe the
administration had proven convincingly that the plan's tax
proposals would achieve the claimed energy savings. An extensive
review of
107

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the NEP release by the Congressional Budget Office on June 1 gave
the administration even more difficulty by disputing the estimated
energy savings and costs of the plan.
Congress also complained that many of Carter's lobbyists did not
seem to understand the totality of the proposal and could not
provide committee members with satisfactory information. Even one
of Carter's own aides alluded to this problem, noting that "the
hearings clearly demonstrated that the administration did not have
adequate background analysis for many of its proposals."3®
A more pressing concern to the administration was the need
to maintain the fragile coalition supporting the NEP. The plan's
most important provisions, gas and oil pricing, had received
narrow approval. As the House debates indicated, the
administration could not count simply on party loyalty to insure
the bill's enactment. During committee hearings and the floor
debate, liberal Democrats opposed to higher energy prices (whether
regulated or not) often allied themselves with producer state
representatives and Republicans who favored outright deregulation.
During committee hearings, members frequently supported Carter on
certain issues but opposed other parts of the NEP that they
believed particularly deleterious to their respective
constituencies. Carter ally Dingell, for instance, led the fight

* 108
for the president's natural gas proposals, but—
36Information
and quotes from Memoranda in the Office of the
Satff Secretary Collection, Carter Library.
108

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reflecting the concerns of his auto industry constituents— spear—
headed attempts to weaken the gas—guzzler tax and voiced his
opposition to tax rebates for purchasers of energy-efficient
(i.e. imported) automobiles. Many other legislators exhibited the
same type of voting behavior, but the power of the Ad Hoc Energy
Committee and the presentation of the NEP as an all—or—nothing
proposition once it reached the floor limited the damage that
these split allegiances could inflict. Although the NEP had
emerged from the House relatively unscathed in spite of these
factors, the administration would have to continue its efforts to
maintain its shaky coalition of support and insure the
legislation's approval in the Senate. For the moment, however,
Carter could savor his victory in the House.
Following its victory, however, the Carter administration
faced a damaging loss of momentum before the Senate began
consideration of the National Energy Plan. Immediately after the
House action, Congress adjourned for its August recess and did not
meet again until after Labor Day. With Congress not in session,
energy issues faded from the nation's attention. The recess also
removed some of the pressure from the Senate to follow the House's
lead and enact the bill. Although Carter could have used this
interval to strengthen and continue his campaign for public
support of the NEP, subsequent events forced him to do otherwise.

109
1
0
9
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Beginning in July, allegations began to surface
regarding the financial practices of one of Carter's most
respected and trusted advisers—OMB director Bert Lance.
With little other national news breaking during the summer recess,
the media jumped on Lance's controversial business dealings and
made his private banking practices front page news for much of
August.37 The "Lance Affair" soon began to consume the
administration, creating organizational chaos within the White
House, and devouring the administration's political capital on the
Hill and popularity with the public. By Labor Day, calls from the
public, media, and Congress for Lance's resignation intensified,
finally forcing Carter to capitulate and accept Lance's
resignation several weeks later. Although officially over, the
Lance episode had a damaging effect on Carter's energy program.
With Lance's resignation, Carter lost one of his best operatives
on the Hill, and one of his most trusted senior advisers. More
significantly, the controversy diverted both the administration's
and the public's attention away from energy issues. By the time
Congress reconvened after Labor Day and the Senate began
consideration of the NEP, the
37
Most of the charges of impropriety related to Lance's
tenure as president of the National Bank of Georgia and the
First National Bank of Calhoun (Ga.). Among the charges were
allegations that Lance had skirted banking laws by allowing
large overdrafts for bank officers and relatives and that he
had misused bank funds during his unsuccessful run for the
Georgia governorship in 1974.
110

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momentum for Carter's quest for a national energy policy had been
curtailed dramatically.
The NEP and the Senate
The loss of momentum caused by the August recess and the
Lance Affair were not the only problems the NEP faced as the
Senate reconvened. True to his earlier pledge, Byrd did nothing to
facilitate the massive bill's passage. He developed no strategy
for approval and set no timetable for the energy hearings. Nor did
he even express strong support for the plan; instead he simply
urged his administration critics to "let the Senate work its
will." The effects of Byrd's leadership on the NEP soon became
clear. With no committee to coordinate the legislation, Byrd broke
the policy down into six individual bills that would be reported
separately to the Senate floor following committee action. At no
time would the Senate vote on the NEP as a single piece of
legislation. Furthermore, as congressional analyst Charles 0.
Jones has noted, "it did not take lobbyists very long to identify
the merits of this more disjointed method of acting on the

* 701
President's energy
38 . .
The six bills were: (1) S 977, coal conversion bill
forcing electric utilities and other industrial users to burn
coal or other fuels rather than oil and natural gas; (2) S
701, a bill authorizing federal matching grants for energy
conservation in schools and hospitals; (3) S 2057, a bill
containing wide-ranging energy conservation measures; (4) S
2104 a bill on natural gas; (5) S 2114, a bill reforming
electric rates; and, (6) a bill proposing tax measures such as
the Crude Oil Equalization Tax.
111

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package," for the procedure allowed numerous opportunities to
amend and weaken the proposal.
The lack of a forceful party leader in the Senate was not
the only problem the administration faced in its attempt to move
the legislation through the upper body. The two committees
overseeing much of the bill, Energy and Finance, generally were
less inclined than the House to favor Carter's prescription of
federal management of energy issues. As political scientist James
Everett Katz noted, unlike their House counterparts, the Senate
Energy Committee lacked a pro-consumer majority and the Finance
Committee widely was regarded as a bastion of oil industry
supporters. In addition, energy producer states and conservative
western states had much greater power in the Senate than in the
House since apportionment of representation was not based on
population. Further complicating this situation, the chairs of the
Energy and Finance Committees differed markedly in their approach
to energy policy. Energy Committee Chair Henry "Scoop" Jackson (D-
Wash.), widely viewed by his colleagues as the Senate's leading
authority on energy issues, had opposed all previous attempts to
end price controls on the petroleum industry. His counterpart on
the Finance committee, Russell Long (D. La.), had just as ardently
112
supported the efforts of the gas and oil industry
• 39(j:,hafles ês, "Congress and the Making of Energy Policy,"

in New Dimensions to Energy Policy, ed. Robert Lawrence, p.
173.
112

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to end price controls. Long and Jackson also had expressed
reservations about other provisions of the NEP. Long argued that
the plan did too little to encourage production, while Jackson
expressed reservations about Carter's intention to raise oil prices
to world levels. Because of Jackson's and Long's different views on
the NEP, it appeared unlikely that the administration could count
on the same type of vocal and united party leadership that it
enjoyed in the House.40
On Wednesday, September 7, 1977, four and one half months
after Carter had first presented the NEP to Congress, the Senate
finally began serious deliberations on energy policy. By late
September, the NEP appeared headed for disaster. The Senate
Committee on Energy gutted Carter's proposals for utility rate
reform and weakened Carter's coal conversion bill. The Finance
Committee also participated in the bloodletting by rejecting the
plan's gas guzzler tax. Shortly thereafter, one independent (Harry
F. Byrd Jr.-Va) and two Democrats (Floyd K. Haskell-Col. and
Gaylord Nelson- Wis.) joined the committee's Republican members to
reject the centerpiece of the NEP—the crude oil equalization tax-
in a 10-6 vote. Ironically, consumer and labor lobbyists who had
supported the tax in the House debate reversed their position in
the Senate fearing that Chairman Long would amend the tax rebate to
create a plowback for the oil industry. Perhaps nothing better
summed up the fate of the 113
40Richard
Corrigan, "The
Senate," National Journal Carter
Energy
1 Epic—
1 Enter the
3 20 August
1977, p.
1306.

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NEP in the Senate than the headline that appeared the week of
September 24 in the Congressional Quarterly Weekly: "Senate
Hacks Up Carter Energy Program."41
More trouble followed these legislative setbacks. The
plan's call for continued price regulation of natural gas prices
elicited strident criticism from powerful Senate members such as
Long and Lloyd Bentsen (D—Tex.). Because the Energy and Natural
Resources Committee remained deadlocked on the issue, Committee
Chair Jackson sent the measure to the Senate floor without
recommendation. During the floor debate, it became clear that
deregulation supporters had a majority of votes to alter the
bill in favor of decontrol. In an effort to stop the
deregulation forces, liberal Democratic Senators James Abourezk
(S.D.) and Howard M. Metzenbaum (Ohio)—both of whom opposed any
•^c^^^ses in the price of natural gas—mounted a nine day
filibuster that brought all work on the NEP to a halt.
Taking extraordinary advantage of my prerogative as leader,"
Byrd teamed with Vice President Mondale to end the ^*^kuster on
October 3. The next day, a phased—in natural gas deregulation
bill passed the Senate 50-46.42
41 Bob Rankin, "Senate Hacks Up Carter Energy Program,"
Congressional Quarterlyr 24 September 1977, pp. 1999-2000.
42Bob Rankin, "Natural Gas Filibuster Ties Up Senate,"

Congressional Quarterlyr 1 October 1977, pp. 2059-2064; Bob
Rankin, Senate Continues Dismantling Energy Plan," Congressional
Quarterly. 8 October 1977, pp. 2119-2122; "Night of the Long
Winds," Time, 10 October 1977, pp. 12-14.
114

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More bad news for the Carter White House followed the
natural gas vote. The Senate Finance Committee voted down
Carter's proposed tax on utility and industrial use of oil and
natural gas, thereby emasculating his coal conversion program.
The same day, the full Senate approved a watered- down version of
a bill designed to encourage utility companies to conserve
energy. Carter again suffered a stinging defeat. By the end of
the week, the Senate essentially had completed its actions on the
NEP. After a total of seventy-three roll call votes on five
different bills, not including the 109 votes that occurred during
the natural gas filibuster, the Senate had approved a program
that resembled Carter's original proposal in name only. At the
end of the tumultuous week, Senator Abraham Ribicoff (D- Conn.)
mused publicly, "I'm just wondering ... if the President
shouldn't admit that his energy program is a shambles."43
If Ribicoff expected Carter to back away from the NEP, he
soon would be disappointed. The following week, Carter's top
aides gathered to outline a plan to resurrect the policy. The
group, echoing Frank Moore's earlier concerns about a more
centralized lobbying procedure, agreed to establish a joint White
House/Department of Energy task force headed by Hamilton Jordan

* 115
to coordinate another public
43Ribicoff
quoted in Bob Rankin, "Senate Continues
Dismantling Energy Plan," Congressional Quarterly Weekly 8
October 1977, p. 2121; see also Jones, "Congress and the Making
of Energy Policy," p. 174.
115

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relations effort and lobby Congress. They also reiterated the
need for every administration official in every department to
"carry our message to their constituencies." Meetings with
congressional leaders and committees would be intensified and
also would be used to stress the administration's support for the
House bill. Energy policy, they argued, must receive top
priority. The group also agreed that Carter should again address
the nation in order to rekindle a sense of urgency in enacting
the NEP, but they advised him to "avoid attacking lobbyists and
the Senate."44
The next day, Carter held a news conference to reiterate
his determination to pass the NEP. Although aides had warned the
president to temper his remarks and speak only in general terms,
Carter ignored their advice. As he took the podium in the White
House press room, observers noticed a change in the president's
demeanor. Gone was the wide toothy grin, replaced by an icy stare
and harsh-toned voice. Completely disregarding the advice of his
aides, Carter launched into a diatribe. Charging that "never has
this much money" been used to derail public
Memorandum, Stu Eizenstat to the President, 12 October

1977; Memorandum for the President From Jim Schlesinger, Stu
Eizenstat, Subject; Strategy for Energy Legislation, 12 October
1977, Jimmy Carter Library; Domestic Policy Staff 10n' Sû E*zenstat
Papers, "Energy Bill [O/A 6341 ] [8] Box 198, Jimmy Carter
Library. Members of the group included: Vice President Mondale,
Schlesinger, Robert Strauss, Jordan, Powell, Moore, Lipshutz,
Caddell, Rafshoon, Kitty Schirmer, and members of the Mondale and
Schlesinger staffs.
116

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policy, Carter accused oil companies of "potential war
profiteering" in the energy crisis. "Oil companies," he claimed,
apparently want it all" and were attempting "the biggest ripoff
in history."45
If Carter hoped his remarks would rekindle interest in the
energy debate, he was correct. Unfortunately much of the
publicity that followed reflected negatively on the
administration. Senate Minority Leader Howard Baker responded
that the NEP faced difficulty not because of the oil lobby but
because "it's a bad bill." Standard Oil of Indiana Chairman John
Swearington charged that Carter's diatribe was an emotional
appeal to defend a tax program that is not defensible." The
National Taxpayers Union spent $11,124 to place a full page ad in
the Washington Post headlined "DEMAGOGUERY AT THE WHITE HOUSE"
and signed by forty-one economists denouncing the attack. Senator
Long, referring to the speech, solemnly noted, "We'd all be
advised to turn down our rhetoric."45
Carter, however, refused to temper his fervor. The outburst
reflected Carter's deep-seeded antipathy towards the petroleum
industry and his belief that the industry represented a "cartel"
that required close government * 117
, . ^klic—Papers—of—the ___ Presidents: Jimmv Carter. 1977

(Washington, D.C.: Government Printing Office, 1978), p. 1783.
46
Bob Rankin, Carter Criticizes Industry; Finance Markup
Ends,"
gongressional __ Quarterly Weekly. 15 October 1977
p.2216;
27. The Biggest Rip-Off," Time. 24 October 1977, pp. 24—
1
1
7

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supervision.47 The speech also demonstrated once again his efforts
to go directly to the public to overcome the influence of
lobbyists in the legislature. If he could not remobilize public
support, he believed, the NEP faced the prospect of never emerging
from Congress. While many questioned the wisdom of his decision to
launch an attack on oil interests, the administration desperately
needed to refocus the public's attention on the energy plan.
Polling data from late October revealed that the president had
only a forty-three percent overall approval rating, while fifty-
seven percent of those polled disapproved of his handling of
energy policy. Carter hoped that his appeal to the public for
support, despite any potential negative effects, would propel
energy policy back to the forefront of public policy debate and
regain both the public's and Congress's support for the program.48
Carter's renewed commitment to the NEP quickly would
receive its first test. Under an agreement reached between the
House and Senate leaders, forty—three conferees from both bodies
met on October 18, 1977, to begin the process of reconciling the
two versions of the energy program. On the House side, O'Neill
appointed seventeen Democrats and eight Republicans, all of whom
had served on the Ad Hoc Energy
47Carter's
Handwritten
Notes for News October 1977, Conference, 13
"10/13/77," Box 54, Office of the Staff
Secretary Collection, Jimmy
Carter48Library.
Harris Poll cited in "The Biggest Rip-Off," Time, 24
October 1977, p . 25. ----
118

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Committee. The Senate leadership selected all eighteen members
(eleven Democrats and seven Republicans) of the Energy Committee
as conferees on the gas pricing, an unusual move given that the
committee had deadlocked on the issue previously. Of the twenty
Senate conferees, eleven were Democrats and nine were
Republicans. The Senate leadership divided these conferees into
smaller groups to oversee the electric utility bill, coal
conversion bill, and conservation bill.49
At the same time, Carter and his aides began a mammoth to
build support for the House version of the NEP. Frank Moore and Stu
Eizenstat set up a barrage of meetings between the president and
individual conferees for the last two weeks of the month. Carter
even cancelled a two-day governors' conference on energy so that
the he could devote his full attention to congressional arm-
twisting. He ordered cabinet members to provide him with weekly
summaries detailing the number of times they had mentioned energy
issues in speeches and public appearances and encouraged them to
take any opportunity possible to lobby representatives and
senators. Even the staid and dour Attorney General Griffin Bell
managed to plug the NEP in a speech he delivered to the National
Security Traders Association. While publicly striking a
conciliatory tone regarding the conference, Carter and his energy

* 119
advisers
4^ Conference Begins on Carter's

Energy Plan " Journal. 22 October 1977. National
1
1
9

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privately stressed their intent to do whatever necessary to
support the House bill over the Senate's proposals.50
Despite the renewed attention Carter devoted to the NEP,
the conferees remained deadlocked on the controversial issues of
energy taxation and natural gas pricing. Hoping to prod them to
action, Carter made his third energy fireside chat on November 8
and struck a conciliatory tone towards Congress, encouraging his
listeners to support their representatives in developing a
solution to the energy crisis. Although Carter thought it
imperative for Congress to finish work on the bill by year's end,
the conferees made little effort to accommodate him. They
frequently worked only four days a week, for no more than five
hours a day. Slowing the process even further, the group remained
divided over the more controversial portions of the Carter plan—
natural gas pricing and taxation issues. The administration,
cognizant of the deadlock between the House and Senate conferees,
nevertheless remained publicly committed to the House version of
the NEP and made no attempt to seek a compromise position.
Critics later would fault Carter for his intractability on the
issue; however,
50Memorandum,
Jim Schlesinger, Stu Eizenstat to the
President, Subject: Strategy for Energy Legislation, 12 1\977'
Enersy Bil1 CO/A 6341 ] [2]," Domestic Policy staff Collection,
Stu Eizenstat Papers, Jimmy Carter Library; Memorandum, Jack
Watson, Jane Frank to the President, Subject: Schlesinger
Eizenstat Memorandum on "Strategy For Energy Legislation," 14
October 1977, "10/15/77," Box 54, Office of the Staff Secretary
Collection, Jimmy Carter Library;
Launching the Energy Blitz," Time. 31 October 1977, DD. 1214.
r trtr
120

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privately he and his aides had realized that the administration
would have to forge a compromise agreement to push the
legislation forward. Recognizing the fragility of the coalition
supporting the NEP and fearful of alienating his liberal
constituents, Carter decided that his political interests would
be best served by allowing House conferees to initiate any
compromise agreements. If the conferees failed to do so,
Schlesinger discreetly would explore areas of potential
compromise with the administration's supporters. The decision to
avoid compromise resulted from political calculation, not simply
obstinacy or dogmatism as later claimed by Carter's critics.51
As the conferees remained deadlocked on the NEP, lobbyists
for scores of interest groups descended upon the capitol to push
for changes to the legislation. A sampling of the groups
represented demonstrated the hurdles the plan faced. As expected,
the energy industry was represented in full force to oppose the
NEP's continued regulation of prices. A coalition of major
corporations that included General Motors, Union Carbide, and
Anheuser-Busch teamed up to create the Electric Consumers
Resource Council to lobby against the administration's utility
rate reform plan. The AFL-CIO marshalled its forces to oppose tax
breaks for energy producers and push for a 100 billion dollar
* 121
energy
_ Memorandum, Jim Schlesinger, Charlie Schultze et al to

the President, Subject: Long Range Strategy on~iHirgy Conference
November 1977, "11/1/77," Office of the Staff Secretary
1
2
1

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bank to finance energy production plant construction. The home-
building industry fought against the administration's home
insulation tax credit program arguing that the program would
lead to shortages of materials needed for new home construction.
The United Auto Workers association lobbied against the gas-
guzzler tax and requirements for the production of fuel-
efficient automobiles. The Consumer Federation of America, Ralph
Nader's Public Citizen Tax Reform Research Group, the
Environmental Policy Center, and senior citizens groups joined
with oil industry representatives, industrial energy users, and
labor unions to oppose efforts to revive the crude oil
equalization tax. Carter's warning in his April 18 energy
address about the pressure lobbyists would place on the NEP had
materialized to an even greater extent than the president had
expected.52
On November 18, the conferees adjourned for a ten-day
Thanksgiving recess. Lud Ashley, Chairman of the House Ad Hoc
Energy Committee, believed that the conferees needed to break in
order to negotiate a compromise that could salvage the bill. The
protracted debate over apparently intractable differences had
demoralized and wearied a number of members. As Louisiana
Senator J. Bennett Johnston noted, the leadership called the

122
recess "because we're all sick of [the
^Richard Corrigan, "Lobbyists Are Putting the Blitz on

Carter s Energy Program," National Journal. 26 November 1977, pp.
1836-1839.
122

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energy struggle]."53 Five weeks had passed since the conferees
began negotiations. In those five weeks, they reached agreement
only on the more minor provisions of the bill. This lack of
progress in the conference so alarmed Carter that he took the
unprecedented step of canceling his November 22 diplomatic
mission to nine foreign countries. Not since anti-American riots
prevented Dwight Eisenhower from travelling to Japan in 1960, had
a major presidential trip abroad been canceled so abruptly.54
Following their Thanksgiving recess, the conferees returned
to Washington and took up the issue of natural gas Pr^-c^-n9’
During the recess, meetings between the conference leaders had
made little progress in forging a compromise
the remaining issues, particularly natural gas pricing.
With the Christmas adjournment rapidly approaching, Senate
Finance Chair Russell Long refused to allow any action on Carter
s tax proposals until the conferees resolved the natural gas
question. Making superb use of his parliamentary prowess, Long
held the tax provisions hostage for nine days in an attempt to
force his fellow senators to accept a natural gas deregulation
bill. The conferees, however, remained evenly divided on the
issue. Because of this deadlock, no action could be taken on
either natural
Bob Rankin, Conferees Vote Utility Rate Compromise,"

Congressional Quarterly. 19 November 1977, p . 2445.
54"Carter
Decides to Stay Home," Time. 14 November 1977, p.
1 7 . '
123

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gas or the energy tax provisions. After two weeks of fruitless
negotiation, the conference recessed indefinitely on December
15.55
During the Christmas recess, the administration desperately
attempted to resolve the conflict over natural gas pricing. The
conferees' inability to reach a compromise on natural gas caused
the White House to change its lobbying strategy and directly
involve the president in negotiating a compromise agreement.
Fearing the debilitating effects of a continued struggle over the
gas issue, the administration recognized that embracing some form
of gas deregulation would be necessary. Carter feared that if the
gas issue evaded timely resolution, the chances of reviving the
most
important component of the NEP ---- the crude oil equalization
tax—would be jeopardized. Pursuant to this decision, the
administration focused its efforts on swaying enough House
members, particularly John Dingell, to accept a modified
deregulation proposal. Schlesinger would work closely with
Senator Jackson to forge a compromise that would receive the
support of enough moderate deregulation opponents and proponents
to insure approval. In order to save COET, the administration
would take whatever steps necessary to forge an agreement on gas

* 124
pricing, even if this meant alienating
„ , . 55''Energy: Conferees Break Over Natural Gas Pricing,"

National Journal. 31 December 1977, p. 2019.
12
4

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part of its energy coalition by supporting some form of
deregulation.56
For the following eight months, the administration worked
closely with Senate and House leaders in an attempt to find a
solution for the natural gas imbroglio. Carter met with
individual legislators to discuss compromise options and to
encourage them to reach an agreement. Although the administration
had hoped agreement could be reached in the first quarter of the
new year, the conferees remained deadlocked and expressed little
hope for reaching an agreement. The inability to resolve the gas
issue in conference meant that Carter's other energy proposals,
many of which had won conference approval, languished in a
legislative purgatory. True to form, Carter resisted any efforts
to act on the other parts of the NEP individually, insisting that
the energy program be implemented as a single comprehensive
package. He again argued that if the administration abandoned the
comprehensiveness of the plan, he would lose the political
leverage necessary to force his gas and oil policies through
Congress. The president also
Memorandum, Jim Schlesinger, Frank Moore to the

President, Subject: National Energy Plan Congressional Strategy,
not dated; Memorandum, Stu Eizenstat and Jim Schlesinger to the
President, Subject: Immediate Energy Concerns, 7 January 1978;
Memorandum, Frank Moore, Bob Thomson to the President, Subject:
Call to Jackson re Natural Gas, 9
January 1978; Memorandum, Jim Schlesinger, et ________al to the
President, Subject: Proposed Energy Bill Strategy and Positions,
13 January 1978; Brief, "How to Achieve a Natural Gas
Compromise," 31 January 1978. All memoranda found in Energy Bill
[o/A 6341] [2]," Domestic Policy Staff
Collection, Stu Eizenstat Papers, Jimmy Carter Library.
125

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feared that the failure to enact a comprehensive program would
indicate to U.S. allies that the nation lacked the ability and
resolve to bring U.S. energy prices up to world levels.57
Despite the enormous pressure and effort the administration
and Carter personally invested in seeking a compromise on natural
gas pricing, the issue continued to remain unresolved. As had
happened so often in the previous thirty years of debate over
natural gas pricing, it appeared that no consensus could be
achieved. Even with the mounting political costs of fighting for
a bill that appeared to have no core constituency, Carter refused
to abandon his quest to see the natural gas pricing issue
resolved. Working closely with the president and Schlesinger, the
conference committee finally drafted a compromise bill in late
April 1978—a year after Carter first proposed the NEP. Under the
terms of the compromise, federal controls would be placed on both
interstate and intrastate gas sales, with regularly scheduled
upward adjustments of the price ceiling until July 1985, at which
point all controls would be lifted.
Formally approved by the conference in May 1978, months
passed as opponents to the proposal attempted to amend or obstruct
its enactment. Carter and his lobbyists, however, maintained steady

* 126
and intense pressure on Congress to adopt
57
For Carter's continued demands for a comprehensive see
Lefcter,
Carter to Howard Metzenbaum, 11 April 1977, Energy Bill
[0/A 6341] [2]," Domestic Policy Staff
Collection, Stu Eizenstat Papers, Jimmy Carter Library.
12
6

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the plan as the only means of reforming the natural gas pricing
system. To gain additional political leverage, the White House
also began an extraordinary, and largely successful, effort to
enlist the support of the business and financial communities.
Under the leadership of Anne Wexler, the administration's
recently created Office of Public Liaison (part of Eizenstat's
Domestic Policy Staff) organized a series of confidential
meetings between the administration and executives from the
insurance, steel, automobile, construction, aerospace, and
manufacturing industries.58 Opponents of the administration's
efforts charged that Carter was attempting to bribe and/or
blackmail industry to support the bill. Responding to a similar
charge in a Washington Post: article alleging that the
administration had linked the steel industry's support of the gas
bill to favorable consideration of the industry's pleas for tax
relief and protection from imports, an anonymous administration
official simply replied "If you're going to suck the federal
teat, I guess you're going to have to pay for it once in awhile."

* 16
Senior Carter adviser Robert
58
Memorandum, Jim Schlesinger, Frank Moore, Stu
Eizenstat, Jerry rafshoon, Anne Wexler to the President Subject:
Natural gas, 26 August 1978, "8/26/78," Office of the Staff
Secretary Collection, Jimmy Carter Library David E Rosenbaum,
White House Lobbyists Employ the Hard Sell to Win Senate support
for Natural Gas Bill. ConoressionM
16 September 1978, p. 2452; Richard Corrigan, "Chalk OnluD
September ie9S78^ BaiAgnal 30
127

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Strauss, however, denied the allegation the following
day.59
Regardless of the innuendo surrounding the meetings, the
sessions yielded impressive results, and on September 11, the
Department of Energy supplied senators with 55 major industrial
and financial corporations and twenty trade associations that
endorsed the natural gas compromise. As these efforts indicate,
the administration refused to back away from the natural gas
debate. Carter's unyielding attempt to achieve a natural gas bill
later prompted political scientist Pietro Nivola to conclude,
"[t]he resiliency and resourcefulness of the White House, which
repeatedly salvaged the Natural Gas Policy Act from the brink of
defeat, was awesome."60
On September 27, 1978, the Senate passed the Natural Gas
Policy Act (NGPA) by a 57-42 vote with an unusual alliance of
liberals and conservatives voting against the measure.
Deregulation opponents Edward Kennedy, James Abourezk, William
Proxmire, and George McGovern joined conservative oil industry
advocates Russell Long, John Tower, Robert Dole, and Howard Baker
in opposing the bill. Despite this success, the bill appeared to
be headed for possible defeat in the House several days later when
28
NGPA
59Washinqton Post. 7 September 1978, p. A2.
Pietro S. Nivola, "Energy Policy and the Congress: The

Politics of the Natural Gas Policy Act of 1978," Public Policv
28 No. 4 (Fall 1980), p. 526. “
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opponents attempted to separate it from the rest of the Carter
energy program in order to defeat it. Once again, however, O'Neill
managed to keep the bill together and the House passed the energy
package 231 to 168 on the morning of October 15, 1978.
Following an eighteen-month battle, Carter finally had
achieved a partial victory in his quest for a national energy
plan. Strikingly, the question of natural gas pricing—the subject
of heated debate for the previous thirty years—had achieved
resolution. Although many of Carter's less controversial
conservation programs remained intact (tax credits for energy
conservation measure, appliance efficiency standards), the victory
was far from complete. The Senate's unwillingness to approve taxes
to discourage consumption deprived the NEP of its most significant
mechanism for increasing conservation. The plan as enacted
eliminated the proposed gasoline tax, reduced the gas-guzzler tax
and rejected Carter's proposal to tax industrial use of oil and
natural gas. The centerpiece of Carter's conservation plan—the
crude oil equalization tax— had fallen victim to the delay caused
by the natural gas fight. Carter, in pushing for rapid
consideration of his energy package, had argued repeatedly that
delay would jeopardize the program. His reasoning proved sound as
both senators Jackson and Long conceded in March 1978 that the
approaching November congressional elections made a tax increase
proposal such as COET politically impossible to
1 29

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consider since the continuing debate over natural gas would place
the COET vote even closer to election day.^
Because of these tax provision omissions, as Carter signed the
legislation into law on November 10, 1978, he knew that his task
to redirect the nation's energy policy remained far from complete.
The fight over the NEP had exacted a heavy toll on the
Carter administration. Originally envisioned by the president (and
a number of House and Senate leaders) as a legislative effort that
would be concluded by the end his first year in office, discussion
and debate over the policy had dragged on for almost two years.
During that time, Carter s approval ratings began and continued a
steady decline. As noted previously, when the policy finally
received congressional approval, it lacked the most significant
tax provisions of Carter's original conservation measures. Many in
the press and Congress placed the blame for the long and costly
fight over energy policy squarely on the shoulders of the
president. According to the critics, Carter erred by rushing into
the program, by drafting it in virtual secrecy, and by failing to
lobby Congress effectively.
Those arguing that fault for the program's difficulties lay
at Carter's feet, however, failed to take into account a larger

* 130
structural problem that inhibited the policy's
61Bob
Rankin, "Shaky Compromise Reached On Gas Bill,"
Congressional Quarterly, 11 March 1978, p. 631.
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chances of success. In the early 1970s, both the House and Senate
adopted a series of reforms designed to enhance the responsiveness
and innovativeness of the policy-making process. Decentralized
decision-making, increased equity among members regardless of
seniority, democratization of the leadership selection process,
and other internal procedures characterized the overall thrust of
these reforms. Unfortunately, as Bruce Oppenheimer has argued,
rather than facilitate policy, making these reforms actually
inhibited the process by creating new means of obstruction and
delay. This "new obstructionism" made it possible for almost any
member or minority coalition to block the passage of legislation.
The new obstructionism also increased the power of interest groups
in the decision-making process.62
Oppenheimer contends that the new obstructionism prevented
the enactment of energy legislation in the 94th Congress and
almost succeeded in doing so again in 1977-78. Only through the
extraordinary efforts of O'Neill and his decision to create an Ad
Hoc Committee did energy policy manage to emerge intact from the
House. Conversely, Byrd's unwillingness or inability to create a
similar body to supervise the NEP as a single piece of legislation
and his decision to divide the bill into separate components
allowed
62,
'Bruce I Oppenheimer, "Congress and the New
Obstructionism:
„ _ , 0 Developing an Energy Program," in Congress
Reconsidered, Second Edition, ed. Lawrence C. Dodd and Bruce
I. Oppenheimer (Washington, D.C.: Congressional Quarterly
Press, 1981), pp. 275-295.
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obstructionists to attack the plan piecemeal and hold it
hostage in order to force changes in other parts of the
plan. As Oppenheimer notes, this process received its
fullest demonstration in the fight over natural gas:

Until hours before the adjournment of the 95th
Congress, Senate opponents of the Carter program from both
the political left and right worked to delay consideration
of the conference report on the energy tax bill. These
efforts were designed to prevent the House from considering
the conference report on the combined bills in a single
vote, which it could not do unless the Senate passed the
tax conference report.
(The other conference reports had already passed the Senate
separately.) The opponents hoped to force the House to take
a separate vote on the natural gas conference report
because they believed it could be defeated on a separate
vote but not as part of a package.
Ironically, a number of Carter's critics complained that the
comprehensive nature of the NEP made it more difficult to enact.
Oppenheimer points out, however, that Carter's obsessive pursuit
of a comprehensive plan prevented opponents from blocking the
NGPA. The problems of obstructionism created by the congressional
reforms of the early 1970s made the partial enactment of the NEP
all the more remarkable.
In addition to the changed decision-making environment of
Congress, the administration faced another significant its quest
for a national energy policy. A successful energy policy, whether
it emphasized conservation or production, required energy prices
to rise and therefore would exert a substantial financial burden
on virtually
630ppenheimer,
Congress Reconsidered pp. 282-283.
13
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every citizen, business, and industry, making the costs both
widely distributed and heavily concentrated. Yet the benefits of
the policy would not necessarily accrue to those bearing the
costs. Schlesinger summarized the dilemma facing the
administration succinctly when he noted, "there is no
constituency for the energy program. There are many
constituencies opposed. But the basic constituency for the
program is the future."64 The prospect of advocating a policy with
virtually no constituency did little to temper Carter's
insistence to address the nation's energy woes.
The fight over the NEP had cost the president incalculable
political capital and earned him few public accolades. Yet his
determination to confront the still unresolved issue of oil

133
pricing remained unwavering.
64Bob
Rankin, "Many Factors Led to Energy Stalemate,"
Congressional Quarterly. 24 December 1977, p. 2631.
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CHAPTER V
THE BEGINNING OF THE END: THE IRANIAN

CRISIS AND ENERGY PHASE II
To many observers, it appeared that the great battle for a
national energy policy ended on November 9, 1978, when Carter
signed the National Energy Plan into law. Despite the grueling
eighteen-month legislative battle, however, the victory was only
partial, for Congress had failed to act on the NEP's oil pricing
proposals. As a result, the legislation would reduce imported oil
consumption by an estimated 2.4 to 2.9 million barrels a day by
1985, rather than the 4.9 million barrels projected under Carter's
original proposal. At a news conference following the signing
ceremony, the president reiterated the need to bring U.S. oil
prices in line with world prices to encourage conservation and
honor his pledge to the western allies at the 1978 Bonn economic
summit. Aside from the issue of oil pricing, however, it appeared
that energy issues no longer would take primacy in the
administration's domestic policymaking efforts, instead, by late
1978 Carter and his aides increasingly focused on the rapidly
rising consumer price index. Inflation, not energy issues,

134
apparently would be
1
3
4

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the focus of the administration's policy-making in late 1978 and
1979.1
For a brief moment, however, the administration could pause
to enjoy two significant accomplishments. In addition to the
enactment of the NEP, Carter celebrated his greatest foreign
policy achievement just weeks before when he joined Egyptian
President Anwar Sadat and Israeli Prime Minister Menachim Begin
for the signing of the Camp David Accords, a historic peace
agreement between Israel and Egypt. Yet even as the
administration celebrated these two victories, civil unrest in a
country half a world away would set in motion a series of
developments that would endanger not only the administration's
brief triumphs on energy and foreign

policy, but the political viability of the administration itself.
ironically, energy and the Middle East, the two areas of
policy-making over which Carter appeared to have attained mastery,
joined together in an explosive combination beginning in the fall
of 1978. The Shah of Iran, one of the United States' staunchest
allies and the leader of one of the richest petroleum producing
nations in the world, ruled over a country increasingly torn by
civil strife. Since 1953, when he reclaimed the Peacock Throne
through a CIA backed coup, Mohammed Reza Pahlavi had used terror
* Oil
and
1Richard
Halloran, "Energy Act Is Signed: Limits Seen "
ggVgf* ?0 November 1978, p. D1 ;%ichard Cor??gaA,
Oil Price Decision Falls Victim to the War on Inflation,"
National Journal. 13 January 1979, pp. 58-9.
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repression to subjugate his nation's citizens. Drawing upon the
nation's vast oil wealth, he undertook a military buildup and a
western-style-modernization campaign in his country that angered
Islamic fundamentalists, suspicious of western cultural norms. As
Pahlavi increasingly alienated his people, his ties to the U.S.
only strengthened. Iran's oil fields furnished the U.S. with a
vital economic necessity, and its army provided a strategic bulwark
against the Soviet Union in the Middle East.
The strong ties between the U.S. and Iran began to unravel
in 1978, however, as conflict between the Shah and Islamic clerical
leaders escalated. By late 1978, protests against the Shah
increased, and Pahlavi faced a widespread revolutionary foment.
Demonstrations and confrontations between fundamentalists and the
Shah's army grew in number and became increasingly violent. In a
futile attempt to restore order, the Shah declared martial law on
September 8. Opposition forces responded with fury, staging more
demonstrations. More alarming to the West, during October,
fundamentalists began staging strikes at the nation's oil fields,
attempting to cripple the Shah by depriving him of wealth. As
Western executives and technicians who managed the fields fled the
nation to escape the escalating turmoil, the nation's oil exports
dwindled. By the end of the year, Iran's oil production had
plummeted from 5.5 million barrels a day to a scant 500,000 barrels
a day. On December 27, exports of petroleum from Iran to other
nations came to an
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abrupt halt. The world's second largest exporter of petroleum no
longer could provide enough crude for its own needs, let alone
those of the oil-starved West. Creating further turmoil in world
energy markets, representatives of the Organization of Petroleum
Exporting Countries (OPEC) announced on December 17 their decision
to raise export prices by 14.5 percent during the coming year.
From the vantage point of late 1978, it became increasingly
apparent that the energy policy victory the administration claimed
in October might amount to little more than a cease-fire, and an
unstable one at that.
In spite of the deteriorating situation in Iran and the
need to bring U.S. oil prices in line with world prices (a
provision of Carter's energy plan that Congress had refused to
enact in October), the administration made few energy policy
pronouncements in the first month of 1979. At the time this
reticence could be justified. The Iranian situation, although
quite serious and potentially devastating in the long-term, did
not pose an immediate threat to U.S. supplies. Initial shortages
from the Iranian shutdown were offset by other exporting
countries. Saudi Arabia, for instance, boosted its production from
8.5 million barrels a day to 10.5 million. Other OPEC members

137
followed suit. As a result, free—world oil production in
1
3
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the first quarter would be only 5 percent lower than normal.2
Because of the actions of other oil-exporting nations, the
administration believed that a potentially catastrophic situation
would be averted, at least temporarily. At a January 3 news
conference, Energy Secretary Schlesinger noted that while a
prolonged shutdown of Iranian exports could lead to shortages by
the following winter, no severe energy shortfalls would occur in
the short-term. He reiterated this view to the president the next
day, although he added one caveat, noting that "the greatest
short-term danger, outside of another crisis elsewhere in the
world, would be an overreaction by the public, leading to panic
and hoarding. To avoid public panic, Schlesinger recommended to
Carter that the administration continue to stress the need for
energy conservation while also offering assurance that no
petroleum crisis would arise in the immediate future.3
Rather than focus on energy policy early in 1979, the
administration centered its domestic policy-making efforts on
combatting inflation. The consumer price index had begun rising
at a disturbing pace in the preceding two years, hitting an
annual rate of 6.5 percent in 1977 and climbing
2Daniel Yergen, The Prize: The Epic Quest for Oil, Money.
and. Power (New York: Simon and Schuster, 1991), p. 685.

3|jew_.
York Times, 4 January 1979; Memorandum, Jim
schlesinger to the President, 4 January 1979, "1/10/79 [11 " Box
114, Office of the Staff Secretary, Jimmy Carter Library.
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again in 1978 to an annual rate of 7.7 percent.4 Responding to the
increases in prices, Carter and his top advisers spent much of
January 1979 developing a 1980 budget plan that could navigate a
treacherous path between slowing inflation while attempting to
avoid recession. Because of Carter's and, perhaps more
importantly, the public's concern with the immediate pressures of
inflation, the administration avoided public discussions
regarding its future energy policy plans—particularly when those
plans almost certainly would call for higher energy prices.^
Some analysts believed that the administration had abandoned its
energy policy efforts. John Zamzow, vice president for energy and
regional economics at the influential Chase Econometric
Associates group, summed up the feelings of many energy and
political analysts when he stated that "we just don t think its
possible for [the administration] to get their act together
before the 1980 elections—and they probably won't get their act
together until after the 1980 elections.
. Council of Economic Advisors, The Economic Report of the

^981)6nt (Washington, D.C.: Government Printing Office,
5Author's
interview with Katherine
"Kitty" Cochrane, March 1996 (hereinafter Schirmer
cited as interview). Cochrane
... .m to he War in Richard Corrigan, "Oil Price Decision Falls

on Inflation," National Journal. 13 January 1
^
979, p. 59 .
■
*
139

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The outward appearance of the administration's inaction on
energy policy, however, was somewhat illusory. Since its first
meeting on December 19, 1978, the president's cabinet- level
Energy Coordinating Committee had been working on phase II of
Carter's energy program. Unlike the development process of Energy
I, Carter had abandoned the notion of using a small, isolated,
confidential task force operating outside of established
departmental and agency channels to develop policy in favor of an
inter-agency task force. As early as June 28, 1978, OMB director
James McIntyre had urged the president to reject the confidential
task force model in favor of an interdepartmental energy
coordinating committee to develop national energy policy. Carter
initially resisted McIntyre's proposal, citing his preference for
another informal arrangement headed by Schlesinger. On August 14,
McIntyre again addressed the issue of a more formal arrangement,
this time with Schlesinger's full concurrence. A month and one-
half later, Carter approved Executive Order 12083, formally
establishing a new cabinet-level Energy Coordinating Committee
(ECC).7
Memorandum, Jim Schlesinger to the President, Subject:

First Energy Coordinating Committee Meeting, 15 December 1977,*
12/19/78, Box 112, Office of the Staff Secretary Collection,
Jimmy Carter Library; Memorandum, Jim McIntyre to the
President, Subject: Proposed Executive Order Establishing the
Energy Coordinating Committee, 28 June 1978, "Energy (General),
Box 200, Domestic Policy Staff Collection, Stuart Eizenstat
Papers, Jimmy Carter Library; Memorandum, Jim McIntyre, Jim
Schlesinger to the President, Subject: Energy Coordinating
Committee, 14 August 1978, "Energy (General)," Box 200,
Domestic Policy Staff Collection, Stuart Eizenstat Papers,
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The establishment of the ECC marked a concerted effort to
avoid a repeat of the protracted legislative battles fought over
Energy I and reflected the growing influence of domestic policy
adviser Stu Eizenstat.8 Many political analysts and congressional
leaders (as well as Eizenstat) had attributed the shortcomings of
Carter's first energy policy to the use of a confidential task
force that operated outside of the normal consultive process.
Political Scientist David Davis, for instance, argued that the
task force's refusal to allow input from interest groups had led
to a revolt by energy lobbies that doomed the policy's complete
implementation. The lack of advance consultation with members of
Congress also had created a number of political headaches that
had further endangered that plan's chances of survival.9
The structure of the ECC differed markedly from
Schlesinger's task force in Energy I. Chaired by the Schlesinger,
the committee consisted of the secretaries of all cabinet-level
departments and numerous senior White House officials, including
the director of OMB, the chair of the Council of Economic
Advisers, the director of the Office of Science and Technology,
the National Security Adviser,
Q
°Cochrane interview.
9F°r
critiques of the use of the confidential task force
see: David Howard Davis, "Pluralism and Energy: Carter's
National Energy Plan," in New Dimensions to Energy Policy, ed.
Lawrence (Lexington, Mass.: D.C. Heath and Co.), pp! 192-3;
Bob Rankin, "Many Factors Led to Energy Stalemate,"

Congressional Quarterly. 24 December 1977, pp. 2631-32.
141

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and the Domestic Affairs Adviser. By utilizing this array of
department officials and presidential advisers, the administration
could combine the neutral competence and expertise of the cabinet
departments with the more politically attuned White House Staff.
As a result, the ECC could analyze policy options in terms of both
technical rosrit and political viability. As the committee evolved
over subsequent months, its structure and leadership would alter,
and its duties would grow to include consultations with both
Congress and interest groups, as well.
Although the ECC had begun its work in December, the
president's public stance indicated little about his future energy
plans. Concerned about stemming the rising tide of inflation and
chastened by his earlier experience in Energy I, Carter made
energy policy a lower profile priority while the ECC developed
policy options.10 Perhaps more importantly, in a dramatic reversal
of his earlier micromanagement of energy issues, he chose to
remove himself from the early discussion of policy proposals. In
decidedly un- Carteresque fashion, when one of his aides sought
his counsel on the administration's gas rationing plans, Carter
simply responded "Leave me out of it for now."11 As for the
critical oil pricing issue, the ECC began exploring
10Cochrane interview.
11Memorandum, Bob Lipshutz to the President, Subject* OPEC Price
Increases, 20 December 1978, "1/2/79 [1]," Box 114,
Office of the Staff Secretary Collection, Jimmy Carter Library.
*
142

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policy options and informed the president of its progress in the
first week of January. While noting that interest in the
administration's oil price stance was growing, the ECC advised the
president not to commit himself to any particular proposal until
the committee had "time . . .to refine our analyses as well as to
consult further with the Congress and others." The president
heeded the committee's advice and remained relatively quiet on the
issue.12
Repercussions from events in Iran, however, would continue
to bring energy issues to the forefront of national policy
discussions. On the afternoon of January 15, the Shah departed
Iran for what he described as "a trip, a vacation." Unlike a
similar "vacation" the Shah had taken in 1953, on this "trip" the
CIA would not intervene and restore him to power. For the first
time in thirty—seven years, the Peacock Throne sat vacant. The
Shah's abdication sent tremors through world energy markets as
investors and energy suppliers nervously eyed the provisional
government's attempts both to restore order in the strife—torn
nation
and, more importantly, resume the production and export of oil.
In the wake of the Shah's abrupt departure from Iran, the

* Oil
Senate Energy Committee summoned Schlesinger to testify
1 Memorandum, Jim Schlesinger, Mike Blumenthal, Richard ooper,

Charles Schultze, Alfred Kahn, Jim McIntyre, Henry Owen, Stu
Eizenstat to the President, Subject: Domestic Crude
Oil Pricing—Information, 3 January 1979, "1/3/79," Box 114
1
143

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on the Iranian situation and the administration’s energy policy
plans.
Schlesinger, with his longstanding reputation in Washington as an
arrogant know—it—all, had what could best be described as a
cautious relationship with members of Carter's White House Staff.
Although Carter valued the Secretary's
and grasp of issues, some high—placed members of the
president's staff saw the Energy Czar as a walking political time—
bomb, liable to offend any constituency at any time, able to
derail single-handedly the administration s energy strategy by
unilaterally pronouncing his verdict on a particular energy issue.
In short, they saw Schlesinger as the proverbial loose cannon in
their carefully crafted energy policy-making process.13 Just hours
prior to Schlesinger's appearance before the committee, Eizenstat
and McIntyre urged the president to call the Energy Secretary and
again remind him of the need to keep the administration's policy-
making options open. Employing the most delicate terms possible,
they reminded the president of the need "for careful, private
consultation with members of Congress, and the importance of
thorough preparation to the ultimate success of our policies."
Unless Schlesinger tempered his pronouncements, they feared,
13Cochrane interview.
1
4
4
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the administration would find itself in yet another drawn out
battle over energy policy.14
The hearing began on January 16 and did not conclude until
the following day. Schlesinger, attentive to the president's
insistence that he make no policy pronouncements, continued to
reiterate the administration's view that the Iranian situation
posed no immediate threat to U.S. energy supplies and argued that
the administration needed additional time for study and evaluation
before embarking upon a new round of energy policy initiatives.
From the administration's perspective, the hearing concluded
successfully. At the same time, however, it offered insight into
the obstacles facing any proposed energy policy. All the committee
members urged the administration to pursue another round of energy
initiatives, yet none seemed to agree on the form those
initiatives should assume. The divisions of opinion cut across
party and ideological lines. Some Democrats such as Bennett
Johnston (La.) favored decontrol of domestic oil prices, while
other Democrats such as Howard Metzenbaum (Ohio) chastised the
administration for pursuing any policy that would lead to higher
prices. As Schlesinger listened to the committee members'
questions and statements, he witnessed again the difficult
tightrope the 145
Memorandum, Stu Eizenstat, Jim McIntyre to the

President, Subject: Recommended Call to Jim Schlesinger Before
his Testimony this Morning, 16 January 1979, "1/17/79," Box
115, Office of the Staff Secretary Collection, Jimmy1 Carter
Library.
145

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administration would have to walk to achieve energy policy
reform.15 16
In only one area of energy policy could the committee
members find consensus: in their opinion the administration's
energy policy efforts were proceeding too slowly. This undoubtedly
struck Schlesinger as highly ironic, given that many of these same
senators had criticized Carter for moving too rapidly on energy
policy in 1977. These sentiments were not held simply by a few
members of the Senate Energy Committee. Ten days later, Senate
majority leader Robert Byrd also expressed his exasperation over
the pace of energy policy development, sarcastically asking, "Has
energy suddenly become a stepchild [to the administration]?"^
Carter apparently felt similar frustration with the slow progress
of his energy proposals. Late in January, the president directed
Eizenstat to convene a new multi-agency force that modified the
ECC and assumed its duties. Superficially, the new task force bore
a distinct resemblance to the ECC, but the new group had several
important differences. First, the new task force would meet in the
west wing of the White House rather than the Department of Energy,
thereby enabling closer supervision and involvement from the White
House
_ Hew—York—Times, 19 January 1979; Conaressional

Quarterly. ---------
16Byrd
cited in Ann Pelham, "Congress to Face Difficult
Energy Decisions This Year," Conaressional Ouarterlv. i February
1979, p. 205. ~-------- ------- *■
146

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Staff. Second, unlike the haphazard meeting schedule of the ECC,
the newly formed task force would meet daily. Finally, perhaps the
most striking difference of all was that Eizenstat—not
Schlesinger—would chair the task force.17
Carter's decision came at a propitious moment, for severe
strains had developed between Schlesinger and the White House
staff. On February 7, Schlesinger again appeared before the Senate
Energy Committee. Ignoring the president's January admonition to
avoid inflammatory statements and any remarks that might hinder
the administration's policy development process, the Secretary
coolly informed the committee members that the shutdown of Iranian
oil fields was "prospectively more serious" than the crippling
1973-74 Arab oil embargo. This unexpected assertion not only
startled the Senators in the hearing room, it shocked the world
financial markets as well. The dollar plunged in currency trading,
the stock market dropped, and gold prices surged to an all-time
high of $254 an ounce. Within hours, frantic White House staffers
scurried to clarify and minimize the Secretary's remarks.
One Department of Energy (DOE) official insisted that Schlesinger
intended his remarks to "promote prudence, not panic" and the

* 147
Secretary himself backed down somewhat the
17 ,
Stu Eizenstat Interview, White Burkett Miller Center of
Public Affairs, University of Virginia, Project on the Carter
Presidency, 1982 (hereinafter cited as PCP), p. 77; Jimmy
Carter, Keeping Faith: Memoirs of a President (New York* Bantam
Books, 1982), p . 110. ’
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next day, claiming that with adequate conservation measures the
U.S. could "live with" the curtailment of oil production by the
Iranian revolution. Charles Schultze publicly argued that the
claims of similarity between the '73-'74 oil embargo and the
Iranian crisis were greatly exaggerated. Privately, Schultze told
Carter that remarks such as Schlesinger's could create an
economic catastrophe and urged the president to make a more
"balanced presentation" of the current energy situation.18
Fortunately for Carter, the financial markets stabilized by
the end of the week, and the administration could refocus its
efforts on developing its new policy initiatives. The president
already had taken a small first step in this regard by calling
for voluntary conservation efforts by energy users (i.e. lowering
thermostats). Using his executive authority, he ordered federal
agencies to lower thermostat settings in federal buildings,
restrict the use of government vehicles, and suspend "energy
intensive research activities." The more significant and
controversial policy decisions still remained under development,
although both Schlesinger and the president
18
Ann Pelham, "Cut in Iranian Oil Prompts Talk of
Gasoline Rationing," Congressional Quarterly. 10 February 1979,
p. 223; Tom Matthews, "Man Over a Barrel," Newsweek. 19
February 1979, p. 22; Merrill Shells, "A New Oil Crunch,"
Newsweek, 19 February 1979, pp. 20-26; "Double Jeopardy in
Iran, Time, 19 February 1979, pp. 44-45; Memorandum, Charlie
Schultze to the President, Subject: How Bad Is the Iranian
Situation Compared to the 1973 Embargo? 9 February 1979
2/9/79," Box 119, Office of the Staff Secretary Collection!
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pledged that the proposals would be ready by early April.
In addition, Schlesinger informed Senator Bennett Johnston that
the DOE would deliver a standby gasoline rationing plan as well
as other standby conservation plans to the Senate no later than
February 26.19
While the DOE concentrated its efforts on the standby plans,
Eizenstat's task force worked to develop phase II of Carter's
energy program. By early February the task force had narrowed its
focus to four major areas of energy policy that consisted of: 1 )
administrative measures on crude oil supplies and prices;
2) programs for international cooperation through the
International Energy Agency; 3) ways to meet energy commitments
to Israel; 4) options for maximum utilization of Alaskan oil;
and, 5) possibilities for other administrative actions to
alleviate fuel shortages. Eizenstat realized that these areas of
energy policy extended far beyond the jurisdiction and expertise
of the Energy Department alone. Thus, he and his assistant
Katherine (Kitty) P. Schirmer solicited input and expertise from
approximately twenty executive agencies ranging from the
Department of Energy to the Department of Health, Education, and
Welfare. After obtaining this information, they worked with

* 1
presidential
19Pelham,
"Cut in Iranian Oil," p . 223; "Double Jeopardy in
Iran, p . 44; Memorandum, Jim McIntyre, Stu Eizenstat to t e
President, Subject: Standby Gasoline Rationing and Ener9y
Conservation Plans, 23 February 1979, 2/24/79, Box 121, Office of
the Staff Secretary Collection, Jimmy Carter Library. '
1
4
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advisers such as Schultze, McIntyre, and Brzezinski to distill
the information and craft it into politically feasible policy
options in the form of Policy Review Memoranda (PRM). These
memoranda were to distributed to the members of the committee
for review and comment and then submitted to the president. As
with Energy I, Carter became intimately involved with the
group's policy option discussions. In contrast to Energy I,
however, the Energy II decision-making process was characterized
by a high degree of collegiality and collaboration between the
politically attuned White House staff and the technical
expertise of department officials. Although the process could
not match the speed of policy development exhibited by
Schlesinger1s earlier task force, Eizenstat hoped that more
thorough examination of energy issues would reduce any proposed
policy's political liabilities.20
Despite the smooth operation of Eizenstat's task force, the
administration could not escape the inherent divisions over the
form energy policy would take. Before the primary * 6
20
Memorandum, Stu Eizenstat, Zbigniew Brzezinski to the
President, 9 February 1979, "2/13/79 [4]," Box 120, Office of
the Staff Secretary Collection, Jimmy Carter Library; "Case
Study: Creation of an Energy Plan," Congressional Quarterly.
6 October 1979, p. 2203. For more on the collegial decision-
making model used by Carter, see Erwin C. Hargrove, Jimmv
Carter as President: Leadership and the Politics of the Pnhl-
ir; —Q°° (Baton Rouge: Louisiana State University Press, 1988),
Jotin p* Burke, The
Institutional Presidency (Baltimore: Johns
Hopkins University Press, 1992), pp. 117-39; and Colin
Campbell, Managing the Presidency: Carter. Reaaan. and the
Search for Executive Harmony (Pittsburgh: University of
Pittsburgh Press, 1986).
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energy initiatives could be made public, the administration first
had to honor Schlesinger's pledge to deliver the mandatory
standby conservation measures to the Congress by February 26.
Unlike the other areas of energy policy, the DOE developed the
standby measures independently from the White House task force.
Unfortunately, in a scene reminiscent of the lack of coordination
between energy officials and members of the White House staff
during the development stage of Energy I, Eizenstat's task force
did not receive DOE s standby plans until three days before they
were to be submitted to Congress. Again echoing the problems of
1977, White House officials recoiled at what they saw.21
Under the DOE's proposal, the administration would submit a
standby gasoline rationing plan to Congress. Along with the
rationing plan, the DOE developed four plans for standby
mandatory energy conservation that would restrict the weekend

* 121
sales of gasoline and diesel fuel, reduce
21
See Memorandum, From Jim McIntyre, Stu Eizenstat to the
President, Subject: Standby Gasoline Rationing and Mandatory
Energy Conservation Plans, 23 February, 1979, "2/24/79," Box
Library; Memorandum, Frank Moore to the President, Subject:
Eizenstat/Mclntyre Memorandum re Standby Gasoline Rationing Ener9y
Conservation Plans, 23 February 1979, 2/24/79, Box 121, Office of
the Staff Secretary Collection, Jimmy Carter Library; Memorandum,
Jerry Rafshoon to the President, Subject: Comment on
Mclntyre/Eizenstat Memo on Gasoline Rationing, 23 February 1979,
"2/24/79," Box 121
Office of the Staff Secretary Collection, Jimmy Carter Library;
and, Memorandum, Stu Eizenstat, Jim McIntyre, Subject: Decision
on Outdoor Lighting Conservation Plan " 26 February 1979,
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commuter parking in order to increase the use of mass transit,
ban the use of electricity to illuminate outdoor signs, and require
owners of most commercial, industrial, and public buildings to set
thermostats no higher than sixty-five degrees for heating, and no
lower than 80 degrees for cooling. The DOE drafted these standby
plans in almost complete isolation, consulting neither the White
House nor congressional leaders about the proposals. Making matters
worse, the department's slowness in developing the plan after
Schlesinger had promised Congress a delivery date made any
substantive alterations all but impossible.^
Because of Schlesinger's self-imposed deadline, Eizenstat
reluctantly advised Carter to forward the plan to Congress but
urged him "to avoid giving any impression that the conservation
plans or the rationing plan [would] be used to deal with the
Iranian problem." This would give the administration time to
reexamine the standby measures and make necessary improvements to
them. While Eizenstat avoided any direct criticism of either
Schlesinger or the DOE, communications director Rafshoon could not
contain his anger and frustration with Schlesinger and his
department. Calling portions of DOE's proposals "hairbrained
schemes,"
, Schlesinger s failure to consult with Congress before

ubmitting the standby rationing and conservation plans exemplified
both his autocratic leadership style and his poor management
skills. Schlesinger's leadership of the Department incr®asin9
criticism from congressional oversight committees and prompted
several legislators to call for his resignation m March.
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Rafshoon summed up the feelings of many of Carter's advisers when
he told the president, "You have been incredibly ill- served by
the Department of Energy. . . The position the DOE has put you in
could not be much worse. ... My recommendation is that you take
bold action—but the option I would favor is not mentioned in the
memo." The option to which Rafshoon referred was the dismissal of
Schlesinger.^
The deterioration of Schlesinger's relationship with other
members of Carter's staff paled in comparison to the animosity
that developed in March between the Secretary and Congress. Since
becoming Carter's energy adviser in 1977, Schlesinger had never
enjoyed a cordial working relationship 23
23
After further discussion, Carter and his White House
advisers decided to table the conservation measures that
banned outdoor advertisement lighting and the restrictions on
commuter parking. Schlesinger reluctantly agreed to the these
two provisions and then surreptitiously lobbied the president
over the weekend for the outdoor lighting ban s inclusion. When
he arrived at the West Wing the following Monday morning,
Eizenstat learned that the lighting provision had been sent to
Congress after all. For a detailed description of this issue,
see Memorandum, From Jim McIntyre, Stu Eizenstat to the
President, Subject: Standby Gasoline Rationing and Mandatory
Energy Conservation Plans, 23 February, 1979,"2/24/79," Box121, Office of th
Secretary Collection, Jimmy Carter Library; Memorandum, Frank
Moore to the President, Subject: Eizenstat/Mclntyre Memorandum
re Standby Gasoline Rationing and Mandatory Energy
Conservation Plans, 23 February 1979, "2/24/79," Box 121
Office of the Staff Secretary Collection, Jimmy Carter-
Library; Memorandum, Jerry Rafshoon to the President, Subject:
Comment onMclntyre/Eizenstat Memo on Gasoline
Rationing, 23 February 1979, "2/24/79," Box 121, Office of the
Staff Secretary Collection, Jimmy Carter Library; and.
Memorandum, Stu Eizenstat, Jim McIntyre, Subject: Decision on
Conservation Plan," 26 February 1979,
2/27/79, Box 121, Office of the Staff Secretary Collection,
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with the legislative branch. Although several influential
lawmakers, such as Senate Energy Committee Chair Henry Jackson,
had a high regard for Schlesinger's abilities, the number of
those who disliked him grew steadily with the passage of time.
By March 1979, the anti-Schlesinger mood in Congress began to
gather critical mass. On March 11, Senator George McGovern (D-
ND) described the administration's energy policy as a "disaster"
and called for the Secretary's firing.24 The following day,
during energy hearings, Senator John Durkin (D-NH) angrily asked
Schlesinger, "Why shouldn't the Congress abolish the Energy
Department and call for your resignation now?" Schlesinger, in
turn, accused Durkin of engaging in "demagoguery," adding that,
"In the course of your statement you have accumulated more
misapprehensions and misinformation than I have seen put
together in any question—if that's what it is—yet provided on
Capitol Hill."25
That same day Senator Dennis DeConcini, in a publicly
released letter to the president, listed a litany of missteps by
Schlesinger and his department and concluded that "the
Administration and the Nation would be better
^4"McGovern Urges Carter

P o l i c i e s , N e w York Times. 12 Dismiss Schlesinger for Energy
March 1979, p. A13.
2 511
Qana. "Resignation of Schlesinger Sought by Several Senators,
Congressional Quarterly. 17 March 1979, p. 499; Richard Corrigan,
Bad Reviews for Schlesinger's Longest- ?Sno«9 fnergy Sh°w' National
Journal. 17 March 1979, pp.
March HOW Hi9h IS °P?" Ssasassk' 26
154

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served if Mr. Schlesinger resigned his present position in favor
of an individual better suited by temperament and background to
take command of this most crucial of policy areas."26 The following
day, three more Senators called for Schlesinger's resignation.
Carter, however, stood firm behind the besieged Secretary and
responded to the calls for resignation by reasserting his "full
trust and confidence" in Schlesinger.27 Despite any grievances
Congress or even his own staff had with the DOE chief's
performance, Carter continued to support him unequivocally. Noting
the close personal relationship between Carter and Schlesinger,
some Carter associates suggested that the Secretary's bullheaded
approach to energy policy actually found favor with the
president.28
Despite the angry rhetoric, the trading of accusations over
Schlesinger's abilities, and congressional questions on the pace
of energy policy development, at the end of the week Schlesinger
remained ensconced in his position, and Eizenstat's task force
continued plotting a national energy strategy. Probably unnoticed
by most of the key figures in the energy policy-making process, a
new movie that touched
26Letter,
Senator DeConcini to the President, 12 March 1979,
"3/14/79," Box 122, Office of the Staff Secretary
27
Letter, Jimmy Carter to Senator Dennis DeConcini, 14
March 1979, "3/14/79," Box 122, Office of the Staff Secretary
28Matthews, "Man over a Barrel," p. 22.
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on energy issues premiered that same week. Hailed by critics as a
well-crafted, suspenseful thriller, The China Syndrome told the
story of a near catastrophic accident at a nuclear power plant. In
the movie, a chain reaction of human and technical error almost
caused a meltdown of the reactor s core. The meltdown, or China
syndrome, would have resulted in a nuclear disaster. Like many of
his peers, critic Richard Schickel of Time magazine praised the
Columbia Pictures production in spite of the "the sizable body of
scientific opinion about the improbability of a chain of accidents
anything like that posited by the film." Twelve days later,
however, events would validate the film's premise.
In the early morning hours of March 28, an alarm sounded
inside the control room of Metropolitan Edison's Unit 2 nuclear
generating facility at Three Mile Island, Pennsylvania. A pump and
then a valve supplying water to the unit's steam generating system
failed. Hundreds of thousands of gallons of radioactive water
poured into the reactor building, and an indeterminate amount of
radioactive gas escaped into the air. Due to the loss of coolant,
part of the nuclear core was exposed. The formerly obscure concept
of a China syndrome became close to reality as technicians
struggled to cool the reactor. Nearby schools closed and thousands
of local residents fled their homes. * 26
29Richard
Schickel, "Art: An Atom-Powered Thriller." Time
26 March 1979, p. 64. ----
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After several tense days, plant engineers eventually regained
control of the situation. The following Sunday, the nation watched
news footage of their nuclear technician president, clad in yellow
safety booties, inspecting the control room of the damaged
reactor. Area residents gradually returned to their homes.
Catastrophe had been averted.
To many, the release of The China Syndrome and the incident
at Three Mile Island reinforced fears about the nation's energy
future. Nuclear technology, after all, was one of the means by
which the U.S. could ease its dependence on imported petroleum.
Ironically, the perils of this dependence became even more clear
several hours before the alarms sounded in Unit 2's control room
when OPEC ministers announced new pricing schedules for crude oil.
Effective April 1, export prices would rise nine percent. In
addition, the ministers voted to permit individual members to add
surcharges to the price of their exports. Nigeria, Libya, and
Algeria wasted no time in announcing surcharges that would raise
prices as much as four dollars above the new base price of $14.95.
Scattered gasoline shortages began to reappear, with one "out of
gas" sign showing briefly in the window of the gas station owned
by the president's brother Billy. The OPEC action and the incident
at Three Mile Island demonstrated the need for Carter to pursue a
second round of energy policy initiatives. 157
15
7

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Throughout March, debate continued within the
administration over the best way to respond to the energy
situation. The time for action had arrived, yet the White House
could not reach a consensus on the how to proceed. On March 19,
Carter called his closest advisers together in a day-long meeting
at Camp David, Maryland. Like Moses ascending the heights of Mt.
Sinai to receive the wisdom of Yahweh, Carter climbed Maryland's
Catoctin Mountains in search of energy solutions. For eight hours
his advisers sought to reconcile energy policy options with the
administration's commitment to reduce inflation. In particular
they discussed the many energy policy options developed by
Eizenstat's task force and the effect these options would have on
the inflation rate. This proved to be a particularly vexing
dilemma. Efforts to lessen dependence on foreign oil, encourage
the development of alternative sources of energy, and compel
conservation could not occur without higher oil prices that in
turn would lead to higher inflation. Yet without higher oil
prices, inflation as well as severe economic hardship likely would
occur given the current state of world oil supplies. In short, it
appeared likely that every policy option would exact a tremendous
political cost. As one aide gloomily noted, "We've got to do what

158
is in the best interests of the country—but it's
15
8

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damn hard to see how anything we do will be in the best interests
of Jimmy Carter."30
At the conclusion of the meeting, which DPS energy
specialist Kitty Schirmer described as "very contentious," Carter
and his aides identified four general and, in some cases,
competing areas of concern regarding the oil pricing plan. First,
any proposal would have to uphold Carter's pledge to the western
allies to bring U.S. oil prices to world levels. The
administration feared that any indication that Carter would break
this pledge would result in an unfavorable reaction from world
financial markets that would further de-stabilize the value of the
dollar. Second, the continued rise in the rate of inflation and
the impact of higher fuel prices would need to be balanced. Third,
any plan pursued by the administration would have to take into
account the political feasibility of its enactment.
Finally, the attendees agreed that the existing price structure of
oil would need to be altered to end the distortion of oil
prices.31
Mirroring the debate that had taken place on oil
deregulation during the past five years, the administration
For information about the meeting at Camp David see

"Agenda for Monday's Camp David Meetings," 19 March 1979,
Jimmy Carter Library; "DOE Energy Briefing Book, Camp David
Meeting," March 19, 1979, "3/19/79 [2]," Box 123, Office of the
Staff Secretary Collection, Jimmy Carter Library; Carter aide
quoted in "Next: Challenges at Home," Time. 2 April 1979, p. 14.
31Cochrane 159
interview.
15
9

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was divided on the specific policy option to pursue.
Mondale initially expressed reservations about the political
repercussions of decontrol, arguing that such a move would lead to
much higher prices and alienate the administration's supporters in
organized labor and consumer groups—two vital democratic
constituencies. Inflation adviser Alfred Kahn feared the economic
consequences of decontrol and urged the president to maintain some
level of price ceilings on oil to prevent skyrocketing inflation.
Schlesinger and Treasury secretary Blumenthal advocated a complete
phasing out of price controls beginning on June 1, 1979 and
culminating in September 1981. To make this option more palatable
P°^-itically, they suggested the administration concurrently send
Congress a tax program to capture any excess profits resulting
from the lifting of price ceilings. They emphasized, however, that
decontrol should occur regardless of congressional action on the
administration's tax proposals. Budget director James McIntyre
sought a compromise position that would phase out price controls
more gradually than Schlesinger and Blumenthal favored and make
the decision on decontrol contingent on the Congress's enactment
of tax provisions on windfall profits. The revenue from these

160
taxes would be used to provide tax
1
6
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credits for lower income groups and fund an alternative energy
development program.32
As debate within the administration continued throughout
March 1979, Carter authorized his aides to invite members of
Congress to the White House to confer on energy policy options.
Unlike his handling of Energy I, Carter actively sought the
advice of Congress, energy interest groups, and advocates for the
environment, consumers, the poor, and solar power proponents
before he made his final decision on energy policy. The format of
the meetings, directed by domestic policy staff liaison Anne
Wexler, closely resembled those conducted during the natural gas
controversy. Recognizing the political difficulties that
effective energy policy initiatives would face, Carter hoped that
extensive consultations could identify problems in the policy
options and also give members of Congress a stake in the energy
program. Carter knew that the worsening domestic energy situation
meant that neither he nor the
Memorandum, Stu Eizenstat, Kitty Schirmer to the

President, Subj: Crude Oil Pricing Options, 26 March 1979;
Memorandum, Stu Eizenstat, Kitty Schirmer to the President,
Subject: Crude Oil Pricing, 29 March 1979; Memorandum, James T.
McIntyre to the President, Subject: Crude Oil Pricing, 26 March
1979; Memorandum from the Vice President to the President,
Subject: Crude Oil Pricing, 26 March 1979; all found in "3/29/79
(1)," Box 124, Office of the Staff Secretary Collection, Jimmy
Carter Library.
161

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nation could afford another eighteen-month battle over energy
legislation.33
By the time these consultations began, Carter had decided
that despite his concern with inflation, the administration must
pursue some form of oil decontrol.
Still unresolved, however, was the speed with which decontrol
would proceed and whether decontrol should be linked with new tax
proposals for producers. Although Carter and the vast majority of
economists and energy experts believed decontrol (and the
resulting higher prices) essential to the success of any energy
policy, the subject generated considerable opposition from
members of the president s own party in Congress. Liberals such
as Howard Metzenbaum and Edward Kennedy vowed to fight any effort
at decontrol that did not include a tax provision on the oil
companies windfall profits. Democrats from energy producing
states and many Republicans favored decontrol but abhorred the
idea of any additional taxes. Carter also had to determine
whether he should pursue decontrol gradually or a^ a** once•
Unfortunately, the administration's extensive
33Memorandum,
Anne Wexler to the President, Subject:
?Q7Qly'^C/oV/ioierS->?et?0rt““Week Ending March 23, 1979, 24 March 1979,
3/26/79
[2], Box 124, Office of the Staff Secretary
Collection, Jimmy Carter Library; Memorandum, Anne Wexler to
r?Ybf!ect: Weekly Activities Report, 31 March 1979,
4/2/79 [2], Box 125, Office of the Staff Secretary
Collection, Jimmy Carter Library; Memorandum, Frank Moore to the
President, Subject: Meeting with Members of Congress on Solar
Energy Policy, 27 March 1979, "3/28/79 [1]," Box 124,
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consultations with Congress demonstrated that no consensus
existed on this politically divisive subject.34
On March 29, 1979, Carter invited twenty-four of the most
influential Democratic members of Congress to the White House for
one last consultation on decontrol.35 36

Of the participants,
Carter asked three questions:

1. In September, 1981, deregulation becomes a fact. I
need you to share your thoughts with me on what
options we have to increase domestic oil supplies and
avoid giving the oil companies a $17 billion windfall.
2. What kind of tax do you think would pass the Congress?
3. Do you have suggestions as to what uses you would put

energy tax revenues: plowback, poor (CPI), home
heating, oil rebates, wood burning stoves,
etc?37
34
Cochrane interview.
35The Democrats in attendance included Senators Lloyd

Bentsen (Tex.), Dale Bumpers (Ark.), Robert Byrd (W.Va.), Frank
Church (Idaho), John Durkin (N.H.), Wendell Ford (Ky.), Henry
Jackson, (Wash.), Bennett Johnston (La.), Russell Long (La.),
Howard Metzenbaum (Ohio) and Congressmen Tip O'Neill (Mass.), Jim
Wright (Tex.), John Brademas (Ind.), Dan Rostenkowski (111.),
John Dingall (Mich.), Harold Johnson (Cal.), Lud Ashley (Ohio),
Toby Moffett (Conn.), Philip Sharp (Ind.), Bob Eckardt (Tex.), Mo
Udall (Ariz.), Richard Bolling (Mo.), Abraham Kazen (Tex.), and
Jim Howard (N.J.).
36Underthe Energy Policy and Conservation Act of 1975, the
government's authority to regulate the price of domestic oil
would expire on September 30, 1981 . The Act also provided that
the president could lift controls between June 1, 1979 and
September 30, 1981.
3Memorandum,
Frank Moore to the President, "Meeting with
House and Senate Leadership on Energy Policy," 28 March 1979,
"3/29/79 [2]" Box 124, Office of the Staff Secretary
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Although Carter could not get those in attendance to reach a
consensus on these issues, he nevertheless demonstrated his
willingness to work with Congress and more importantly his
determination to seek a solution to the worsening energy
situation. Carter told the legislators that while he did not look
forward to making the difficult decision on decontrol, he was
nevertheless "prepared to take that burden on." House Majority
Leader Jim Wright noted afterwards that Carter was "smart as hell"
to hold the meeting because "[i]t showed Congress how impossible
it is to get a consensus.1,38
The meeting with the congressional leadership once again
highlighted the divisiveness of energy policy. Senate Majority
Leader Byrd urged the administration to consider resubmitting the
crude oil equalization tax originally proposed as part of the NEP.
Senator Long argued for decontrol first and then consideration of
a windfall profits tax with a portion of the tax refunded to
energy producers. Conversely, Senator Jackson urged Carter to
introduce the tax program first and submit a decontrol plan only
after Congress approved the tax, while Representative Bolling
insisted that the tax and decontrol measures be considered as a
single package. Senator Johnston argued against any type of
windfall profits tax, while Senator Metzenbaum vigorously opposed

* 164
any decontrol measures. Even as the
38Ann
Pelham, "Carter Studying Decontrol of Oil, Taxes on the
Profits," Congressional Quarterly. 31 March 1979, p. 551.
164

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energy supply situation become more critical and urgent, the same
ideological and regional disputes continued to characterize the
debate over energy policy. As Senator Church mused at the
conclusion of the meeting, the president met with twenty
legislators in attempt to find some type of consensus and instead
received twenty—one opinions for his energy proposal.39
Despite the lack of consensus, Carter promised the
congressional leadership at the meeting that he would announce his
decision the following week. The president believed that "duty
demanded that" he act in order to reduce snsrgy consumption
despite the political costs associated with the issue.40 In the
days that followed, he and the White House Staff worked around the
clock to have an energy policy and message ready by April 5. The
key area of disagreement continued to be oil price decontrol.
Although Carter backed efforts to deregulate the trucking and
airline industries, he hesitated in pursuing a similar tack with
the oil industry. As noted earlier, Carter viewed oil interests as
a selfish cartel that required government supervision.
In dealing with the oil industry, Carter resembled a smalltown
populist suspicious of the industry's power. Further demonstrating
his distrust of the oil industry, he directed
*3 Q
Carter's handwritten notes on meeting with congressional
leaders, "3/29/79 (1), " Box 124, Office of the Staff Secretary
Collection, Jimmy Carter Library; Pelham, 'Carter Studying
Decontrol," p. 551.
40Keepinq Faith, pp. 110-111.
165

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Schlesinger to investigate the possibility that the major
producers were conspiring to create shortages.41 Regardless of the
president's suspicions, however, Eizenstat's energy task force
had concluded that some form of deregulation was the only way to
curb consumption and placate the concerns of western leaders and
international financial markets.
As the date for Carter's scheduled energy message
approached, the pressure in the West Wing became palpable as the
president and his aides debated deregulation proposals, &11 of
which appeared to be a politically unpopular— particularly within
the president's own party. Yet Carter appeared undaunted and
approached the energy dilemma with a zest that bordered on moral
fervor. As the internal debate continued, he admonished his
advisers to "list what we want to say—arrange items in priority—
then say them plainly and bluntly. Hit hard and early. Don't
apologize nor evade tough issues."42 In vintage form, Jimmy Carter
had set his course and was ready to take a strong stand on the
issue regardless of the political costs. Heeding the advice of
Schlesinger and Blumenthal and becoming increasingly concerned

* 166
with the deteriorating energy situation, Carter
41James
Schlesinger Interview, White Burkett Miller Center
of Public Affairs, University of Virginia, Project on the Carter
Presidency, 1982.
42Carter' s handwritten note on Memorandum. ,Terr»
April 1979, "4/2/79 [2], Box 125, Offr

Secretary Collection, Jimmy Carter Library.
166

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finally agreed to begin phased decontrol of oil prices on June 1,
1979 instead of waiting until September for decontrol to occur
automatically. To make decontrol more palatable politically (and
to satisfy his own concerns about the "greed" of the oil
companies) he also agreed to introduce windfall profits tax
legislation on energy producers concurrently with phased
decontrol.
"Our nation's energy problem is serious—and it's getting
worse."43 So began Jimmy Carter's second address introducing a
round of energy policy initiatives, almost two to the day after he
first declared the "moral ®*Iuiv9-lsnt of war' on the United Sates'
energy woes. In
Newsweek termed his "prime—time TV summons to the Age of
Limits," Carter outlined to the nation his plan to free the
country from its addiction to foreign oil.44 The plan Carter
proposed resembled the president's rhetoric in its simplicity and
bluntness. Beginning June 1, the president said he would phase in
the gradual decontrol of oil prices, with all controls lifted by
September 30, 1981. In conjunction with decontrol, Carter called
on Congress to enact a windfall profits tax that would appropriate
fifty percent of the extra revenue oil companies would receive due
to decontrol. Proceeds from the tax would be used to fund
. . — 1 — P a p e r s — o f the Presidents: Jimmv Carter. 1979

44"The Energy Tangle," Newsweek. 16 April 1979, p . 21.
167

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mass transit, offset increased fuel expenses for low—income
families, and finance a proposed Energy Security Fund that would
develop alternative sources of energy. Other provisions of
Carter's plan included expedited federal approval of pipelines
and other energy projects, increased energy production from
federal lands, and restrictions on thermostats of non-residential
buildings. Throughout the address, the president readily
acknowledged that several of these measures, particularly
decontrol, would require immediate sacrifices by most Americans.
Only through such sacrifice, Carter emphasized, could the United
States achieve a secure energy future.45 46
arriv©3
As he concluded the speech, a telegram for Carter at
the White House. The telegram's author, Robert 0. Anderson—
chairman of the board of the powerful Atlantic Richfield Company
(ARCO) and a frequent critic of the administration's energy
policies—offered a brief appraisal of the president's speech.
"The courageous program you outlined tonight for meeting
America's energy challenge is the most constructive step in more
than five years. . .Congratulations on making these difficult but
necessary decisions."45 Many others wrote and telephoned
45Public Papers of the Presidents: Jimmy Carter. 1979
(Washington, D.C.: Government Printing Office, 1980), DD 609-14.
46Telegramfrom Robert 0. Anderson to President Carter, 5

April 1979, "4/4/79 [2]," Box 125, Office of the Staff
Secretary Collection, Jimmy Carter Library.
168

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Carter expressing similar sentiments. British Prime Minister
James Callaghan, French President Valery Giscard d'Estaing, and
West German Chancellor Helmut Schmidt also expressed their
support of the Carter initiative. They praised Carter's boldness
and commended his political courage. An ABC News/Louis Harris
poll taken immediately sftsr the address found that 73% of those
polled approved of Carter's proposals. Based on initial reactions
such as these, Carter's April 5 response to the Iranian situation
and possible energy shortages appeared to have given him the
opportunity to reassert his leadership of the nation.47 * 169
47 n Western Nations Hail Carter Program," Washington

7 April Post. 1979, p . A10; Poll cited in J.P. Smith and
Russell, Mary Gas Prices Seen Rising 15-20 Cents,"
Post, 7 Washington April 1979, p. A1. ---
1
6
9

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CHAPTER VI
ENERGY AND THE CRISIS OF CONFIDENCE
As Carter delivered his April 5 energy address, his senior
advisers gathered in press secretary Jody Powell's office eating
pizza and drinking beer as they watched the speech on Powell's
three television sets. For the second time in as many years, the
president addressed the nation on the urgent need to reduce its
dependence on imported sources of oil. For the second time, he
outlined a series of legislative proposals to encourage energy
conservation. For the first time, however, he announced that he
would assume the political burden of lifting price controls on
domestic oil in order to spur conservation. At the conclusion of
the address, one staffer remarked, "He's done the right damn
thing. ^ The "right damn thing," in this instance, was the
president s announcement that he would lift price controls on
domestic oil.
The decontrol decision had not been an easy one for a man
who expressed almost conspiratorial suspicions about the "greed"
of the oil industry, who pledged during the 1976 campaign to
continue controls on oil prices, and who ran on ^ party platform
that reiterated the pledge to continue controls. In 1977, he had
attempted to avoid decontrol by
Peter Goldman, "The Energy Tangle," Newsweek. 16 April

1979 p. 13 .
1
7
0

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proposing a complicated pricing scheme that would raise prices to
world levels but maintain government regulation. The attempt
failed. Because of his unyielding belief that oil prices must
rise in order to encourage conservation and production, Carter
decided he could not risk another futile legislative battle over
the issue and instead chose to act under the authority given him
by the 1975 Energy Policy and Conservation Act, which empowered
the president to remove controls after June 1, 1979.2 To soften
the financial (and political) impact of decontrol and satisfy his
own reservations, Carter proposed the windfall profits tax on oil
companies with part of the proceeds to be redistributed to
consumers through tax credits. Windfall profits revenues would
also be used to finance an energy security fund to develop
alternative sources of energy. Carter saw these measures as the
most efficient, balanced, and expedient way
2
Carter had not attempted decontrol in Energy I for two
reasons: (1) The 1975 Energy Policy and Conservation Act gave the
president discretionary power on oil control only after June 1 ,
1979. (The Act also stipulated that price control
authority would expire on September 30, 1981 ); (2) Even had he
had the power to so, Carter would not likely have exercised this
option. The president viewed the oil industry as a monopoly that
required government regulation. Because of the fight waged over
natural gas decontrol and the crude oil equalization tax in 1977
and 1978, however, Carter believed that another attempt to find
an alternate means of raising prices would not receive
congressional approval in the near future. His commitment to U.S.
allies and his own belief about the need to raise prices to
encourage conservation required swift action, so Carter
reluctantly decided to authorize phased—in decontrol of prices.
See Carter's nfrt</Wr^ter! N°tes for News Conference, 13 October
1977, 10/13/77,' Box 54, Office of the Staff Secretary
171

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of dealing with the nation's energy woes—even if this meant
reversing both his and his party's longstanding stance on the
politically treacherous issue of oil pricing.
After struggling with energy issues for most of his
presidency, initial reaction to the proposals seemed encouraging
for the president. An ABC News/Louis Harris P°ll taken
immediately following the speech indicated that 73% of those
polled approved of the president's proposals. House speaker
O'Neill supported the president's actions, pledged to work for
swift passage of the legislative components of the package, and
said he would fight legislative attempts to stop decontrol.
Louisiana Senator Bennett Johnston, who had opposed the crude oil
equalization tax, expressed tentative approval for the windfall
profits tax as a reasonable trade-off for decontrol. Even
opponents of Carter's NEP offered support. Shell Oil president
John F. Bookout called Carter's decision "courageous," and House

minority leader John J. Rhodes said he generally endorsed the
plan.3
Opponents of the administration's plan greatly outnumbered
its supporters, however, with the harshest criticism coming from
members of the president's own party.
On the issue of decontrol, liberal Democrats from consuming * 172
3j-p-
Smith and Mary Russel, "Gas Prices Seen Rising,"
gashinqton Post, 7 April 1979, p. 1; Merrill Shells, "Wh4t
Decontrol Will Mean," Newsweek. 16 April 1979, pp. 24-26;
1979fcpp S19-209Y Plan'" -News and World Report. 16 April
1
7
2

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areas condemned Carter's decision. Senator Ted Kennedy (Mass.)
called the move an "unnecessary self-inflicted wound," and Rep.
Pete Stark (Ca.) charged that Carter "sold out to the oil
companies." Toby Moffet (Conn.) said that decontrol amounted "to a
declaration of war on the Northeast" and added that Carter's
standby conservation measures would be defeated in retaliation. A
coalition of New England Democrats, citing the already escalating
cost of home heating oil, feared that decontrol would wreak havoc
on New Englanders trying to heat their homes in the coming winter.
While liberal democrats voiced disapproval of decontrol, more
conservative Democrats from producing regions questioned the
wisdom of the windfall profits tax. Senate Finance Committee chair
Long said he would seek to table the windfall profits tax unless
the proceeds were plowed back to the industry rather than to
consumers and the energy security fund, and fellow Finance
Committee member Lloyd Bentsen refused to support the tax in any
form. Even Democrats who supported the plan disagreed on whether
the tax was too harsh or too lenient and whether or not decontrol
would proceed too quickly or too slowly.^
Of course, congressional Democrats were not alone in their

173
opposition to the plan. A number of Republicans in
J.P. Smith and Mary Russel, "Gas Prices Seen Rising,"

Washington Post, 7 April 1979, p. 1; Merrill Sheils, "What
Decontrol will Mean," Newsweek, 16 April 1979, pp. 24-26;
Carter s Energy Plan," U.S. News and World Report. 16 April
1979 pp. 19-20. -- H
173

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both the House and Senate expressed reservations about imposing a
new tax of any type. Also, in an odd alliance that recalled some
of the battles over the NEP, several consumer and business groups
expressed opposition to the Carter program, albeit for different
reasons. Ellen Berman, executive director of the Consumer Energy
Council, charged that "it is the height of hypocrisy to remove
price controls from the oil industry." Her counterpart at the
Business Roundtable said that the president's tax proposal was
unacceptable and vowed to fight it. Contrary to charges that
Carter "sold out" to the oil industry, the majority of producers
objected to the plan as well. Charles DiBona, president of the
American Petroleum Institute charged that windfall profits taxes
were "unnecessary," and Mobil Oil Corporation's president
complained that the president was unfairly singling out the oil
industry for punishment.^
The vociferous criticism did not catch Carter off guard.
When he met with the congressional leadership several days before
announcing his decisions, the president informed them that he
would endure whatever criticism his decision caused rather than
"spend another two years arguing with you about what ought be
174
done, when you know what ought
winHfan D £arter Pledges Oil Decontrol, Wants

Ui d6 9-6 20 ; r 7 April 1979,
TtX' 0-nqressi0nal Quarter 1 y
. S£Ener
S' J 1(- fl 3V Plan," U.S. News and World
Report, 16 April 1979, pp. 19-20. ---------------
17
4

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to be done. ® Although his decision demonstrated considerable
determination and willingness to assume risk on his part, more
than simple moral aggrandizing would be required to see the
proposals enacted. The administration faced the daunting task of
uniting many disparate interests to support the plan. As with the
NEP, Carter would have to secure the support of factions from both
the Democratic and Republican parties. His task with energy XI,
however, would be more complicated. With consumer price index
inflation soaring to double—digit levels, his inherently
inflationary energy proposals would have to run a political
gauntlet in the Congress.
To develop, promote, and sell his energy program,
Carter turned not to Schlesinger as he had in 1977, but to
Eizenstat. With Carter's approval and encouragement, Eizenstat
guided and completed the evolution of the White House policy-
making apparatus from one based on Carter's notion of cabinet
government to one controlled fully by the senior White House
staff. Energy policy, first entrusted to energy secretary
designate Schlesinger, and then to a cooperative arrangement of an
Eizenstat—chaired task force working closely with Schlesinger and
the Department of Energy, now fell under the complete control of
the White House domestic policy staff. Eizenstat organized this

175
third and final energy task force to initiate, direct and
6peter
.... Goldman, "The Energy Tangle," Newsweek. 16 April i y /y •
175

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coordinate all of the administration's energy activities.
In doing so, he essentially shut Schlesinger out of a
policy-making role and ended Carter's experiment with
^^■binet government, at least in regard to energy policy.^
As conceived by Carter and Eizenstat, the Energy Task Force
had six basic responsibilities. These consisted of: (1) drafting
the energy legislation Carter intended to pursue; (2)
implementing the administrative actions of the program (i.e.
decontrol and other executive orders); (3) coordinating lobbying
efforts for the program in Congress, with particular emphasis on
the windfall profits tax, the Energy Security Fund, and the four
standby conservation measures the administration formulated in
February; (4) creating a press and media campaign to provide the
public with easily understandable information about the
president's program; (5) preparing a public and congressional
relations program for the president, vice president, and cabinet
secretaries; and, (6) cultivating public and interest group
Memorandum, Stu Eizenstat for the President, Subject:

Energy Program—Status Report No. 1, 21 April 1979, "4/11/79 (2),
Box 127, Office of the Staff Secretary Collection, Jimmy
r,uûer„Llt>rary' For more on the organization of the Carter White House
see: Carl M. Brauer, Presidential Transitions;
hower through Reagan (New York: Oxford University Press
1986), pp 181~186; Q. Whitfield Ayres, "The Carter White House
Staff, m The .Carter Years: The President and Policy Mkina, ed.
M. Glen Abernathy, Dilys M. Hill, and Phil Williams (New York:
St. Martin's Press, 1984), pp. 145-153* John P. Burke, The
Institutional Presidency (Baltimore* The Johns Hopkins University
Press, 1992), pp. 117-121; Erwin C. Haf ?F?ve' —Carter as
President: Leadership and the
~^/tics—of—the—Public _____ Good (Baton Rouge: Louisiana State
University Press, 1988), pp. 14-16.
176

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support of the program. To carry out these directives, Eizenstat
selected a membership that tilted heavily towards the White
House staff. Of the group's thirty members®, only nine
represented cabinet departments. Only three of these nine
Califano from HEW, Adams from Transportation, and Andrus from
Interior—were cabinet secretaries. For ^spresentation from the
departments of Energy and Treasury, Eizenstat selected deputy
officials. Recognizing the enormity of the task facing them,
Eizenstat divided the group into three subcommittees, each
headed by a presidential assistant. Eizenstat chaired the
legislative subcommittee, Anne Wexler the outreach subcommittee,
and Gerald Rafshoon the public information subcommittee.
The creation and use of this new Energy Task Force marked a
significant change in the president's approach to governing.
Since his days as a candidate in 1976, Carter had campaigned
against the trappings of Nixon's imperial presidency. Following
his election, he eschewed a highly centralized White House staff
(which he believed had contributed to the Watergate scandal) in
favor of a more
Members of the task force included: (1) White House staff -Anne
Wexler, Mike Chapin, Frank Moore, Bill Cable, Dan Tate, Jerry
Rafshoon, Greg Schneiders, Fred Kahn, Frank Press,
Gene Eidenber9f Pat Bario, Kitty Schirmer; (2) 0MB--BO
Cutter, Eliot Cutler, Ken Glozer; (3) CEA—Charlie Schultze, George

Eads; (4) CEQ—Charlie Warren, Gus Speth; (5) Department of Energy—
A1 Aim, Les Goldman; (6) Treasury—Don Lubick, Emil Sunley, Gene
Godley; (7) Interior—Andrus; (8) Transportation—Adams; (9) HEW—
Califano. Memorandum, Stu Eizenstat for the President, Subject:
Energy Program—Status Report No. 1, 21 April 1979, "4/11/79 (2),"
Box 127, Office of the Staff Secretary Collection.
177

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collegial, decentralized model that relied on the leadership of
cabinet officials. Carter had utilized this model of cabinet
government when he was governor of Georgia and sought to recreate
a similar leadership environment as president. In his first news
conference as president-elect Carter reiterated this point,
noting that "the White House staff would be serving in a staff
capacity only—not in an administrative capacity."9
As his administration progressed, however, it became clear
that the collegial cabinet government process could not
adequately achieve consensus on policy issues. At the same time,
Eizenstat increasingly had gained the trust and respect of both
Carter and congressional leaders. Beginning in 1978, he began to
assume a central role in the administration as the chief
coordinator of domestic policy making. On energy policy, however,
Eizenstat's role grew beyond that of coordinator, as he assumed
much of the responsibility for policy development as well. In
fact, the organization and duties of the Energy Task Force bore a
striking resemblance to the domestic policy making model
recommended by the Ash Council in 1970 and used by Nixon.10 Having
previously avoided a strong centralized
g
Brauer, Presidential Transitions, pp. 181-186; The
--Years, pp. 145-153; Burke, The Institutional

Presidency, pp. 117—121; Hargrove, Jimmv Carter as President.
1 4—16.
10
Richard Nixon commissioned the Ash Council, officially
known as the Advisory Council on Executive Reorganization, to
reorganize the administrative and managerial structure of the
178

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staff, Carter now embraced it in order to secure passage of his
energy policy proposals.
When Congress returned from its Easter recess three weeks
after Carter's April energy announcement, it became clear that
the administration again would encounter a difficult battle on
energy issues. Although the president did not need congressional
approval to begin the phased-in decontrol of oil prices on June
1, liberal Democrats in both the House and Senate attempted to
enact legislation that would override the president's authority
and extend price controls. In the Senate, former NEP ally and
energy committee chair Scoop Jackson, who had indicated he would
support phased-in decontrol, yielded to constituents angered over
rising fuel prices, changed his position, and vowed to introduce
legislation on the floor that would continue price controls until
1982. He admitted, however, that the chances of the Senate
approving it were slim.11
Prospects for continued controls appeared stronger in the
House. Representative Moffet introduced an amendment to the
Department of Energy appropriations bill pending before the
Commerce Committee that would extend price controls
White House. Acting on the council's recommendation, Nixon th l

Do.m®stic Council on July 1 , 1970 to coordinate the development
of domestic policy. As originally conceived, it

Security Council ,inStitUti°nal counterPart °f the National
P<r,1£am' "Opponents of Oil Decontrol Look for

Winning Play, Congressional Onart-prlv. 14 April 1979 D 712-
"The Fight to fiTBig Oil," Time, 23 April 1979 p 59
179

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until 1982. By the end of April, Carter's congressional liaison,
Frank Moore, notified the president that the move for continued
controls appeared to be gaining strength in the Commerce
Committee and warned him that the administration could count on
the support of only three Democrats and probably all fifteen
Republicans—three votes short of the 21 needed to stall the
amendment. In response, Eizenstat initiated a lobbying blitz on
members of the committee, and Carter himself worked closely with
John Dingell (chair of Commerce's Subcommittee on Energy) to
apply pressure on the committee to defeat the amendment. Carter
won a narrow victory on May 2, when the committee deadlocked 21—
21 on the amendment to continue controls. Democrats, including
committee chair Harley Staggers (WVa), voted 18-9 against the
president, as did three Republicans. Most of those voting against
the president cited the lack of constituent support as a primary
reason for their decision.12
Although the president won the first skirmish on decontrol,
the vote foreshadowed the difficulties his other proposals would
encounter. The administration suffered its first major energy
setback on May 10 when the House rejected
^Memorandum from Frank Moore to the President, Subject:

Congressional Leadership Breakfast, "1 May 1979," Box 128, the
Staff Secretary Collection; Memorandum from Frank Moore to the
President, Subject: Weekly Legislative Report, 27 April 1979, "5-
1-79 (2)," Box 129, Office of the Staff Secretary Collection; Ann
Pelham, "Oil Decontrol Wins in Close Committee Vote,"
Congressional Quarterly. 5 May 1979, pp. 822-823.
180

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the standby gas rationing plan Carter had submitted in March.
Although not directly tied to the initiatives Carter announced in
April, the defeat of the rationing plan indicated the problems
energy legislation faced in Congress. Since first submitting the
plan in February 1979, the administration had modified it twice in
an attempt to make it politically viable. Under the original
provisions of the proposal, the president would implement gas
rationing if demand exceeded supply by 20%. Ration coupons would
be distributed to registered vehicle owners, entitling them to
11.3 gallons of gas per week. In an attempt to garner the support
of legislators representing rural areas, who argued that their
constituents had to drive greater distances than those in urban
areas, the administration modified the plan to distribute
additional coupons to car owners in states where gasoline
consumption per capita was higher than the national average.
Although this compromise received Senate approval by a 58-39 vote,
it encountered intense opposition in the House where it was
defeated overwhelmingly on a 159246 vote. Ignoring the
exhortations O'Neill to "act in the national interest," 106
Democrats joined 140 Republicans in opposition. A Congressional
Quarterly analysis of the vote showed that the least opposition to
the plan came from the East (50-62) where mass transit was more
readily available. Delegations from rural areas in the West and
South overwhelmingly opposed the plan in spite of the compromise.
California legislators, arguing that the compromise short-
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changed their state, opposed it 9—29. In the vote's
aftermath, Carter assailed the House for its "political
timidity. . . [and] willing[ness] to put local or parochial
interests" above the national interest. House member
Richard Bolling (D Mo.) echoed Carter's sentiments, arguing
that this is the most gutless Congress I've ever served in,
and I served during the McCarthy years. They voted their
districts instead of their country." Aggravated with the
House's inaction, Carter refused to submit another plan and
instead called on the House to develop its own proposal.13

•
Clearly the gas rationing defeat represented a setback for
the administration, but a much larger and more critical battle on
energy policy loomed—the windfall profits tax and the energy
security fund. Although Carter had decided to seek the tax and
energy fund late in March, the technical legislative language of
the proposals was not determined by Eizenstat and the task force
until late April. Working closely with Frank Moore's
congressional liaison staff and OMB and consulting with the
staffs of the Speaker of the House, the Joint Committee on
Taxation, the House Ways and Means Committee, the Senate Finance
Committee, the Senate and House Energy Committees, and the House
Science and
,^.S.ee ,^nn Pelham, "Ration Plan Revisions Cool Hill

Opposition, Congressional Quarterly 28 April 1979, pp. 770771;
Pelham, "House Defeats Gasoline Rationing Plan," gg.Qqressional
Quarterly 12 May 1979, pp. 875-876; Peter Goldman, A Long Dry
Summer," Newsweek. 21 May 1979 D. 24’ Memorandum, Frank Moore to
the President, Subject: Congressional Leadership Breakfast, 21
May 1979, "5-22-79 (3), Box 132, Office of the Staff Secretary
Collection.
182

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Technology Committee as well as with representatives of the
energy industry and public interest groups, the task force
completed its work in the third week of April, shortly before
Congress reconvened following its Easter recess. In an attempt to
minimize potential legislative delays on the proposal, Carter met
with several members of the House Ways and Means Committee and
agreed that the proposal would be considered in two parts.
Creation of the tax and energy security fund would occur first,
and only after its approval would Congress determine how the
money in the fund should be spent. Carter believed that debate
over the exact uses of the fund would generate considerable
disagreement within the Congress and could jeopardize both the
tax and the creation of the fund.14
Seeking to maximize attention for the windfall profits tax
and the energy security fund, Carter approved the
administration's energy proposal in an unusual public ceremony in
the Oval Office on April 25. Carter described the upcoming
legislative action as "a classic confrontation pitting the common
and public good against the enormous power of a well-organized
special interest." He also declared that he would regard any

1
attempts to weaken the tax
1 Memorandum, Frank Moore to the President, Subject:

Meeting with Ways and Mean Committee Chairmen on Energy, 25
Apnl 1979, ""4/26/79 (2)," Box 128 Office of the Staff
Secretary Collection; Memorandum, Stu Eizenstat for the
President, Subject: Energy Program—Status Report No. 1, 21
April 1979, "4/11/79 (2)," Box 127, Office of the
Secretary Collection. Staff
183

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as a "travesty" and pledged that he would fight such efforts to
the utmost of [his] ability."^ Despite the harshness of the
president s tone, however, the windfall profits tax as developed
by Eizenstat was not as severe as it appeared, fh® fifty percent
tax on revenues resulting from decontrol would be deductible from
the industry's federal income tax, thereby making the effective
tax less than 50%.
Additionally, new oil produced from the Alaska North Slope fields
would be exempt from the tax altogether. Even with the tax, Carter
and Eizenstat projected that the oil companies would receive an
additional $6 billion dollars in revenue through 1981 as a result
of decontrol. As Eizenstat
the president, the tax strikes a proper balance between
providing the new oil production incentives and P^®venting excess
windfalls. The tax [also] generates sufficient funds to assist
low—income households, increase mass transit, and undertake new
energy research and development."16
although Eizenstat succeeded in reducing the severity of the
tax on the oil industry, he could not convince Carter to stop
defining the debate on energy policy as a battle
15Public Papers of the Presidents
728-29. Jimmy Carter. 1979.

pp.
Kathryn Waters Gest, "Carter Sends Congress Details of

Plan to tax Windfall Profits," Congressional Quarterly. 28
JP^1,. 1979' P- 772/ "Carter Outlines Proposal for Windfall
rofits Tax, National—Journal, p . 749; Memorandum, Stu
Eizenstat to the President, Subject: Windfall
Profits Tax, 27
April 1979, "4/27/79 (2) Box 128, Office of the Staff
Secretary Collection.
184

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between greedy oil companies and the public good. He repeatedly
urged the president not to use terms such as kickback,"
"hoodwink," and "laundering" when referring to the plowbacks
many industry advocates sought. Using such "inflammatory"
phrases, Eizenstat argued, served only to alienate both the
industry and members of Congress who favored a minimal plowback
provision.17 Members of the president's speech writing and
communications office disagreed, however. Reminding the
president of the need to rally public support for the proposals,
communications director Rafshoon and speechwriter Rick Hertzberg
told Carter that "the message that the President is taking on
Big Oil has only just begun to get through. We have to keep
hammering away."* 1® True to his understanding of presidential
leadership as appealing to the public good over that of interest
groups, Carter sided with Rafshoon and Hertzberg and continued
to define the energy debate as a test of the national interest
versus the greed of special interests. Days later, the release
of oil company profit reports for the first quarter of 1979 only
strengthened
Memorandum, Stu Eizenstat to the President, Subject-

Tone of Energy Remarks, 25 April 1979, "Box 127, Office of the
Staff Secretary Collection, Jimmy Carter Library.
1
Memorandum, Rick Hertzberg to the President, Subject:
Windfall Profits Statement—Stu's Comments, 25 April 1979 and
Note, Jerry Rafshoon to the President, not dated, "4/26/79 (2),
Box 128, Office of the Staff Secretary Collection; Memorandum,
Jerry Rafshoon to the President, Subject: Stu's memoôn the
tone of Energy Remarks, 25 April 1979, "4/26/79
[1]," Box 128, Office of the Staff Secretary Collection, Jimmy
Carter Library. 1
185

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Carter's position. Exxon reported an increase in profits of 37.4
from the previous year, while Mobil and Texaco reported staggering
increases of over 80 percent in earnings. Widespread publicity and
the ensuing public outcry surrounding the profit jumps appeared to
validate the need for Congress to adopt the tax plan.19
Throughout much of May and June, Carter sought through his
public appearances to increase awareness of the need for his
energy proposals. In addition, Anne Wexler began a series of White
House consultations with representatives of interest and industry
groups that would be affected by the plan. Further strengthening
the president's case for swift action, gasoline shortages began to
paralyze California, forcing Governor Jerry Brown to impose
gasoline rationing. Despite the threat of further gasoline
shortages, the administration's attempts to mobilize public
opinion in favor of the plan, and the extensive consultations
Carter conducted with Congress before he released his energy
proposals, the windfall profits tax and the president's plan to
begin decontrol in June became embroiled in a bipartisan attack on
the administration's energy policies. In the House Ways and Means
Committee, the tax proposal became entangled in a three-way
conflict between supporters of the president, liberal Democrats
who wanted a more severe tax, and Republicans who favored either
no tax at all or a tax
19"Oil Profits Surge: Fuel for Carter's Tax Fiqht," U S News
and World Report. 7 May 1979, p. 57. “
186

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with provisions to plow back a portion of the revenue to oil
companies. After canvassing members of the Committee, Blumenthal
informed the president that the movement towards stiffening the
tax was gaining strength, with some members supporting a tax rate
as high as 85% that would apply to all oil.20
Further impeding the progress of the tax bill in committee,
Democratic liberals again began clamoring to find enough support
to continue controls. Although Carter had hoped that his plan to
tax windfall profits would quiet his critics in the House on the
issue of decontrol, his assumption proved incorrect as rising
gasoline prices made decontrol an even more volatile political
issue. O'Neill, whose Massachusetts constituents faced much
higher heating oil bills under decontrol, reversed his earlier
pledge to support the president and said that if the issue of
extending controls came to a floor vote he would support it.
Majority Whip John Brademus also favored reconsidering the
amendment to continue controls. Complicating matters further,
Anne Wexler reported to the president that many representatives,
as well as traditional Democratic
20
Memorandum, Anne Wexler, Stu Eizenstat to the
President, Subject: Energy Activities, 2 May 1979, "5/15/79 [ 1
], Box 130, Office of the Staff Secretary Collection;
Memorandum, Mike Blumenthal to the President, Subject: Highlights
of Treasury Activities, 18 May 1979, "5/22/79 [2] " Box 132,
Office of the Staff Secretary Collection, Jimmy Library; Richard
Corrigan, "Tax Windfall, Oil Shortfall—Two Sides of the Crude Oil
Picture," National Journal 26 May 1979, p. 857. --------
187

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constituencies such as labor and consumer groups, were
withholding judgment on the tax pending the outcome of
congressional efforts to continue price controls.21
In an effort to stop price control advocates and refocus
attention on the tax issues, Carter met with the congressional
leadership for a breakfast meeting on May 22. Following the
meeting, Ways and Means member Dan Rostenkowski phoned the White
House and expressed his concern about the fate of Carter's
proposals in the House. Speaking to congressional liaison
staffer Bill Cable, the Chicago Democrat warned that "the
President is asking for help on energy from a bunch of gutless
guys who are wellmeaning, but are spineless. For the next 18
months he has to be tough. We are not going to take the blame
unless he takes it to the people and makes them understand.1,22
Two days later, the House Democratic caucus validated
Rostenkowski's concerns. The president's party publicly
humiliated him by affirming their opposition to decontrol in **

138—69
party caucus vote that reflected the strength of price
control proponents from consuming regions,
Memorandum, Anne Wexler to the President, Subject: Sc/JwS?1

rHi?h.fights—Week Ending May 4, 1979, 5 May 1979,' 5/7/79 [1], Box
Library; Ann Pelham, "Oil Decontrol Close Vote'" Congressional
Quarterly. 5 May 1979, pp.
^Memorandum, Bill Cable to the President, Subject: r?^n10n to

May 22
Leadership Breakfast, 22 May 1979, "5/23/79 [ J, Box 132,
Office of the Staff Secretary Collection, Jimmy Carter Library. 1
188

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particularly the Northeast, Midwest, and California. Generally
only representatives from conservative southern districts and
producing states voted against the caucus resolution. According
to Rep. Edward J. Markey (D-Mass), the vote sent a message to the
president—his policies are in conflict the philosophy of his
party." Significantly, other than an informal proposal from Rep.
Moffet to require drivers by law to refrain from driving one day,
those voting against decontrol offered no alternatives to remedy

23
the energy situation.
Despite resistance from his own party, the president
continued to press for his energy proposals and heeded
Rostenkowski's and his aides' advice to "take it to the people."
In his effort to rally the public to his side, Carter faced a
difficult task. A Gallup poll released at the end of May
indicated that although 44% of those polled characterized the
energy situation as "very serious" and 36% as "fairly serious,"
only 14% believed that a "real" shortage existed. A whopping 77%
believed that the shortage was simply contrived by oil companies.
Ominously for the president, a subsequent poll found that 57%
viewed inflation rather than energy problems as the most serious
problem facing the country. Because the president's energy
program
23
Memorandum, Frank Moore to the President, Subj:
Congressional Leadership Breakfast, 21 May 1979, "5/22/79
rl ] l B°* 132' Office of the Staff Secretary Collection, Jimmy
Carter Library; Ann Pelham, House Democrats Back Oil Price
controls, Congressional Quarterly. 26 May 1979, pp. 997-993;
189

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would cause an additional rise in the inflation rate, the opinion
polls gave strength to the arguments of legislators seeking to
continue price controls.24
In the absence of extensive broad-based public support for
his program, Carter worked with Anne Wexler to mobilize public
interest groups, labor, and environmentalists and also sought to
work with the energy industry. Both efforts, however, yielded
little success. On May 30, the president met privately with chief
executives of ARCO, Standard Oil of Indiana, Gulf, and Exxon, as
well as executives of ten other refiners and independent
producers, to discuss means of preventing a summer gasoline
shortage. Department of Justice officials also were present to
insure that antitrust laws were not broken. In addition to
advising the president to weaken the windfall profits proposal,
the officials urged Carter to stop demonizing the industry when he
discussed energy problems. With the exception of these two issues,
those in attendance failed to reach any type of consensus.
Gasoline retailers blamed the producers for increasing prices,
while producers blamed OPEC. Despite the lack of substantive
results from the two—hour meeting, the attendees were heartened by
Carter's apparent willingness to tone down the anti-industry
rhetoric. The administration- industry cease fire on inflammatory
rhetoric lasted only one
„ , 24„G<r01;ge H- GalluP' The Gallup Poll. 1979 (Wilmington,

Del.: Scholarly Resources, 1980), p. 167 and pp. 176-7.
190

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day—the very next afternoon, Carter referred to Mobil Oil Corp.
as "the most irresponsible company in America.
To avoid any appearance of collusion between the president
and the oil industry, Carter directed his staff to organize a
similar meeting with consumers and environmentalists, to take
place the next day. Carter's previous energy proposals generally
had garnered favorable support from the groups in attendance, and
Carter intended the session to be a "candid" discussion of ways
to increase public conservation activities and public awareness
of the energy situation. Far from resembling a collegial
discussion of energy policy options, the meeting turned into an
open-assault on the president's decontrol and windfall tax
proposals. In addition to participants challenging Carter s stand
on decontrol, they also attacked the administration's
credibility, its mass transit policies, and the inequity of the
its proposed windfall tax allocations to consumers. Reflecting on
the general acrimony of the meeting, Betty Furness, an NBC
consumer reporter, commented that she had never heard anyone talk
* 30
to a president "the way
Memorandum, Stu Eizenstat, Kitty Schirmer for the ?neMlde-irint-

/rtSu.^?ct; Meetin9 with Oil Industry Representatives,
30 May 1979, 5/31/79," Box 134, Office of the Staff Secretary
Collection; Memorandum, Topics Suggested for Discussion at
Meeting with the President, 20 May 1979, "5/31/79," Box 134,
Office of the Staff Secretary Collection; Memorandum, Frank
Moore to the President, 4 June 1979, "6/5/79 [1]," Box 134,
Office of the Staff Secretary Collection; "Carter Castigates
Mobil on Decontrol, New York Times. 2 June 1979, p . 31; "The Sky
Is Falling on Washington," Time. 11 June 1979, *p. 20.
191

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they talked to Jimmy Carter today."26 As the meeting demonstrated,
Carter's program faced not only the opposition of his own party,
but also that of major consumer and environmental groups.27
Although they assailed Carter's plan, the participants offered
the president no alternatives to easing the energy situation.
The strong approval of Carter's energy actions that showed
up in polls immediately following his April address had all but
disappeared by early summer. His overall approval rating fell to
37% in the Gallup poll with the most precipitous drop occurring
among Democrats and independent voters. The consumer price index
in May and June disclosed a 12.5 percent annual inflation rate
and further damaged the president's popularity. Energy prices
rose at an even faster rate, as average gasoline prices had
increased by 55% since January. The gasoline shortages that
initially had appeared only in California began spreading to the
east coast as well, and in many areas oil companies provided
stations with only 80% to 90% of their normal gasoline allotment.
As gas lines grew, so did consumer frustration. Sporadic
instances of violence by irate customers stuck in
26Quoted
in New York Times. 2 June 1979,
31, col. 1
27.
Memorandum, stu Eizenstat et al to the President
Subject: Energy Meeting, 23 May 1979, "5/25/79 [2]," Box 133'
Ann^l°if th!,St.aff SecretarY Collection; Memorandum*,* From
Anne Wexler, Stu Eizenstat to the President, Subject: Meeting
with Civic Consumer, and Environmental Organization
'n3l,Mal1979' "6/1/79'" Bo* 134, Office of the
Staff Secretary Collection; New York Times 2 June 1979, p . 31,
col 1
192

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blocks-long gas lines began to be reported on the evening
television news.28
Alarmed by the downward spiral in the president's
popularity, the deteriorating energy situation, and the lack of
movement of the administration's energy proposals on Capitol
Hill, Eizenstat's task force began to examine other ®n®rgy
initiatives that could serve two purposes; provide new sources of
energy and reverse the president's slide in P^klic opinion polls.
One initiative the administration seized upon came out of the
House rather than the executive branch. In the mid-1970s,
Congress had considered a synthetic fuels program that would
subsidize and encourage the manufacture of oil and gas-like fuels
from coal, shale, and other natural resources. President Ford had
advocated such programs in 1975 and 1976, narrowly losing in the
House on both occasions. Early in June 1979, Majority Leader
Wright met with Carter to discuss a new multi-billion-dollar
synfuels legislative package. Because of his concerns regarding
the high costs and uncertain benefits of the program, Carter
remained undecided on the issue initially.
As the plan gained more supporters in Congress, however, Carter's
aides urged the president to support the legislation. Eliot
Cutler in OMB suggested that the
28
M me Gallup Poll, 1979, p . 172; Economic data cited in
Memorandum, Stu Eizenstat to the President, Subject: Energy,
28 June 1979, [Trip to Japan and Korea, 6/22/79-7/1/791 Ml "
Box 157 Office of the Staff Secretary Collection! Ji^y Carter 1
Library.
193

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administration tie the synfuels program to its energy security
fund (and hence the revenues from the windfall profits tax),
thereby speeding enactment of the president's program. Still
withholding full endorsement of the plan, Carter instructed
Eizenstat to develop a Policy Review Memorandum (PRM) on synfuels
for consideration in July.29
The Energy Task Force developed the other major initiative
Carter embraced—a solar energy plan. The proposal called for the
creation of a federal Solar Development Bank to provide interest
subsidies for home improvement loans and mortgages for builders
who installed solar energy systems. It also included tax credits
for homeowners who incorporated passive solar technology in the
construction of new homes and a 646 million dollar research and
development fund for solar technologies. In addition to reducing
dependence on oil, the plan offered two benefits not directly
related to energy. As Eizenstat reminded the president before he
approved the proposal, "From both a substantive and political
standpoint, solar and renewable resources are the only really
bright spots on an otherwise bleak energy horizon." He added that
because of the
2
Memorandum, Eliot Cutler to Jim McIntyre, Stu
Synthetics and Energy Supply, 12 June
9
l ??' 6/14/79, Box 136, Office of the Staff Secretary
Collection; Memorandum, Stu Eizenstat to the President,
Subject: Moorhead Synfuels Bill, 13 June 1979, "6/14/79," Box
136, Office of the Staff Secretary Collection; Ann '
House Democrats Looking to Synthetic Fuels to
Pelham,
Meet Nation1s
Energy Demands," Congressional Quarterly. 9 June 1979
1099.
194

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likelihood of OPEC price increases at the end of the month, a
timely release of the solar program could help alleviate the
public s 'sense of despair" about the energy situation. Carter
approved the program immediately. As he dedicated the new White
House solar hot water heating system on June 20/ Carter used the
occasion to unveil the solar energy proposal, proclaiming that
"No one will ever embargo the sun or interrupt its delivery to
us."30
Three days after the announcement of the solar energy
program, Carter departed Washington for an economic summit
meeting in Tokyo where energy issues would dominate the agenda.
In an acrimonious exchange on the first day of the meeting,
Carter bore the brunt of harsh criticism from European and
Japanese leaders over the failure of the U.S. to reduce its
energy consumption substantially. Writing in his diary, Carter
called the session "one of the worst days of my diplomatic
life."31 Within hours, however, the situation Carter faced at the
conference would be overshadowed by events in Geneva and the
United States. As the president donned formal attire for a state
dinner with Emperor Hirohito, he received distressing news from
the OPEC
3
Memorandum, Stu Eizenstat to the President, Subject: Solar
Memo (with PRM attached), 5 June 1979, "6/8/79," Box InnI M°ffi1Ce
?f ,the Jâff Secretary Collection; Memorandum, ig?f
Weufi/onT^cTT,' Subject: Solar Energy Announcement, 19 June 6
t
Box 136' ?fflce of the Staff Secretary
Collection; Carter Sets Ambitious Effort for Use of Solar Energy,

Congressional Quarterly. 23 June 1979, p . 1245.
31 Carter, Keeping Faith, p. 111.
195

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meeting in Geneva. The oil ministers announced that prices would
rise to an average price of twenty-two dollars per barrel, a
fifteen percent increase over the previous week's rate. In less
than seven months, the price of OPEC oil had rocketed from a
maximum adjusted base of $12.50 to $22. The same day that OPEC
announced its price hike, Carter also learned that the House had
approved a weakened version of the windfall profits tax. Although
the House version called for a sixty percent tax rather than a
fifty percent tax, it did not provide for a permanent tax as
Carter wanted. In a victory for the oil industry, the House voted
to end the tax in 1990. Ninety moderate and conservative
Democrats joined with all but eleven of the House Republicans to
secure passage in a 236-183 vote.32
Compounding matters, the domestic energy situation in the
United States had approached a state of crisis. The gasoline
shortages that first appeared limited only to California and then
to large urban areas, had spread all over the country by late
June. A survey by the American Automobile Association disclosed
that 58% of the nation's gas stations closed on June 23 because
of low inventories. Seven states—Connecticut, New Jersey,
Florida, Maryland,
New York, Virginia, and Texas—as well as the District of Columbia
resorted to odd-even rationing to protect limited
32Ann Pelham, "House Ignores Proposal by Ways and Means
Panel, Passes Weaker'Windfall' Tax," Concretion*! Quarterly,30

June 1979, pp. 1283-1285. --------------------------------------
196

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supplies. Prices of gas in some areas topped one dollar per
gallon, an increase of almost seventy percent from December
1978. Reports of violence increased as brawls erupted among
frustrated consumers stranded in gasoline lines. Two motorists
were murdered in Brooklyn after they tried to cut in front of
other customers waiting in lines at service stations. An intrepid
consumer in New Jersey, who attempted to tap into a pressured
gasoline pipeline to fulfill his gas needs, caused a 1,500 gallon
fuel spill that forced the evacuation of over a dozen families
from their homes. In response to the shortfall, a nationwide
coalition of service station owners threatened to shut down if the
Department of Energy did not grant them an emergency profit margin
increase. As Mac Victor of the New York State Association of
Service Stations noted, "There is panic at the pumps.

It's the worst it's ever been."33
Anger over the high cost and scarcity of fuel led many of
the nation s 100,000 independent truckers to strike in protest.
While most of the strikers simply parked their rigs, other
resorted to more disruptive protests. Snipers fired on non-
striking truckers, injuring at least seven drivers by the end of
the month and killing one driver in Alabama. Other disgruntled
truckers used their rigs to
33Daniel
Yergin, The Prize: _The Epic Quest for
gjpney, and Power (New York: Touchstone, 1992), p. 694; _____Oil-.
Weisman, "Gas: Perception and Reality," New York Times.Steven
July 1979, p. 1.; Tom Morganthau, "The Energy Plague,"
Newsweek. 2 July 1979, pp. 22-24; "The Great Energy Mess,"
Time, 2 July 1979, pp. 14-17.
197

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blockade roads to refineries, further reducing the already scarce
supplies of gasoline. A blockade of an expressway in Levittown,
Pennsylvania led to a two-night riot that resulted in over forty
injuries. The Governors of Georgia, Kentucky, and Rhode Island
called out the National Guard to protect non-striking truckers and
clear blockades. In Alabama, Governor Fob James organized armed
escorts to protect convoys of non-striking truckers and encouraged
truckers to arm themselves. In addition to disrupting gasoline
shipments with blockades, the truck strike caused shipments of
produce to drop by as much as 40% in Massachusetts and hog
deliveries to drop 75% in the midwest. In many areas, produce
rotted in warehouses because of the shortage of shippers.34
Alarmed by the domestic situation, Eizenstat—who had stayed
in Washington during the summit—wired Carter sobering news.
Describing the crisis, the domestic policy adviser told the
president that he did not foresee any chance of short-term
improvement in the situation. In addition to the gas shortages and
the worsening rate of inflation, Eizenstat told the president that
the administration's economic advisers predicted a zero rate of
growth in GNP for July and forecast a high likelihood of recession
in the coming months. Even with the gloomy
"The Great Truck Blockade," U.S. News Report.

and Worlri July 1979, p. 18; "'One 2 July
Hellacious Uproar,'" Time, 979, pp. 22-27;
"The Energy Plague," p. 24
198

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economic figures, the energy situation—more than any other
factor—threatened the political survival of the
administration and warranted immediate action. Summarizing the
effects of the energy crisis, Eizenstat remarked that:
I do not need to detail for you the political damage we

are suffering from all this. It is perhaps sufficient to
say that nothing which has occurred in the administration
to date—not the Soviet agreement on the Middle East, not
the Lance affair, not the Panama Canal Treaties, not the
defeat of several major domestic legislative proposals,
not the sparring with Kennedy, and not even double-digit
inflation— have added so much water to our ship.
Nothing else has so frustrated, confused, angered the
American people or so targeted their distress at you personally.
. .Mayor Koch indicated to me. . .[that] he had not witnessed
anything comparable to the current emotion in American political
life since Vietnam.35
Eizenstat's assessment of the situation received validation
the next day, when Gallup released polling data indicating that
only 29% approved of the president's job performance.36
In response to the worsening domestic energy situation,
Carter immediately canceled his Hawaiian vacation plans and
returned to Washington on July 1. The next day, he convened a
special meeting of his energy advisers and told them, "I want a
bold and forceful program that, under the scrutiny of
3Memorandum, Stu Eizenstat to the President,

Subject:
2r8nJV.ne 1979, "[TriP to Japan and Korea, 6/22/79-
7/1/79]
[1], Box 137, Office of the Staff Secretary
36The 29% approval rating was the lowest of Carter's presidency

until that time, and represented a drop of 19
ta € P nts in
?m^So? ? Vu °i , .three months. Perhaps reflecting the impact
of the trucker s strike and gas shortage, his sharpest decline
occurred in the East, where his approval rating dropped from 51%
in mid-March to 28% in late June. The Gallup “OH» p. 190.
199

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the Congress and the public, will be highly acceptable, and we can
move without delay."37 For the next two hours,
Carter and his staff reviewed the status of energy legislation
currently pending in Congress, particularly the synfuels bill, and
discussed in general terms new policy proposals the administration
could sponsor. Although the attendees agreed to discuss specific
policy options the following day, a disagreement arose over the
timing of the new initiatives. Media adviser Rafshoon and press
secretary Powell both urged the president to take advantage of the
existing crisis atmosphere and the resulting public focus of
attention on the issue and outline his energy proposal that week
on national television. Rafshoon and Powell also contended that in
the crisis atmosphere, Congress would be more receptive to
enacting energy legislation, even politically difficult
legislation, than at any other time. Eizenstat argued against a
major address until later in July in order to give the staff more
time to prepare new policy initiatives. Carter, however, agreed
with Rafshoon and Powell and announced that he would outline the
second phase of his 1979 energy policy on Thursday, July 5.38
37Richard TVr
Halloran, "President to Outline Energy Plan on
New York Times. 3 July 1979, p. D12.
38 •
Richard Halloran, "President to Outline Energy Plan on
TV, New. York Times, 3 July 1979, p. D12; For details of the
disagreement over the timing of the speech, see Hedrick Smith,
President Cancels Energy Address: No Reason Offered," New York
Times. 5 July 1979, p. 1. ---
200

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Meeting again the next day with his energy advisers, Carter
initiated staff discussions of the particular policies he would
propose. Representatives from the domestic policy staff, OMB, and
Treasury advocated the creation of an independent, federally-
chartered synthetic fuels corporation to be funded by a portion
of the windfall Profits tax. In conjunction with the synfuels
corporation, Eizenstat also pushed for the creation of an Energy
Mobilization Board (EMB), modeled after the World War II era War
Production Board. The EMB would have authority to speed the
development of energy projects such as pipelines and
facilities. Carter also indicated his desire to revive the
standby gasoline rationing plan. Although the president and his
advisers reached agreement on the basic proposals to pursue, they
could not agree on the specifies of the initiatives. As his
advisers continued to discuss the particulars of the new energy
program, Carter departed for Camp David to prepare his address.39
Two days later—the night before the scheduled address-
Carter placed a conference call to Hamilton Jordan,
Mondale, Powell, Rafshoon, and deputy news secretary Rex Granum
and told them to cancel the speech. When the aides asked him why
he had made this decision, Carter refused to
Memorandum, Stu Eizenstat, Kitty Schirmer to the "7'nSub*™t:

M®®.tin9 with Energy Advisers, 3 July 1979,
ULAV'1^' offlce of the Staff Secretary Collection;

Hedrick^ Smith, New Bid By Carter on Gasoline Rationing Likely,
New York Times. 4 July 1979, p. 1.
201

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elaborate. Although exact details explaining the president s
sudden cancellation remain unclear, Carter apparently was
dissatisfied with the advice he was receiving on energy issues,
and he became convinced that the energy Pôblsm could not be
solved by making another address or sending another proposal to
Congress. Explaining the episode in his memoirs, Carter recalled
being influenced by a lengthy assessment of American attitudes on
energy and other issues prepared by presidential pollster Patrick
Caddell. Caddell argued that according to his polling data, the
public s distrust of government had become so great that further
appeals for action on energy were meaningless.
Caddell contended that before the president could win public
approval of his energy plans, he first must regain their trust
and confidence. Carter embraced his pollster's assessment and
chose to cancel the speech, fearing that another empty appeal to
sacrifice would "either put [the public] to sleep or arouse in
them a greater level of alienation and rejection."40
For the next ten days Carter remained secluded at Camp
David. The only public explanation for the abrupt change in
Carter s schedule was a two-sentence press release from * •
Carter, Keeping Faith, p. 114—115. Most of Carter's advisers

remain unsure about the exact reasons for the ~f the speech,
although several have said they believe that Carter s account
in Keeping Faith is probably
• Aw number of
Press accounts following the cancellation, however,
speculated that the president's action
address'111317 & Stunt to maximize publicity for his energy
202

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Powell that stated: "The president is in the process of assessing
major domestic issues which he believes are important to the
country and which include, but go beyond, the question of energy.
He will be consulting with a number of individuals whose judgment
he respects, both in and outside government."41 Rather than quiet
any controversy over the episode, the statement only added an air
of mystery (and interest) to the president's sudden withdrawal
from public view. Although concerns over energy policy initiated
the "Camp David Summit," the president's consultations quickly
escalated into a ten-day "self-study" of his administration that
he hoped would "dramatize the importance of the questions [he]
was trying to answer."42 Leaving the specific work on energy
proposals to the Eizenstat task force, Carter invited dozens of
politicians, business leaders, community leaders, public interest
groups, religious leaders, and journalists to discuss the state
of the nation and his administration.43 As the brainstorming
41Terence Smith, Has a "Decision by

Broad Effect," Carter to Put Off
42Carter, Keeping FaiFh.
Speech New York
p. 115. Times 6 July 1979,
p. 1.
addition to. the usual assortment of senators,
representatives, cabinet officers, and presidential
civicând' rCPfter ^ With an array of business, labor, ?chair ct,leade^s that
included Reginald Jones General Eiectric Corporation), A. Robert
Abboud (president, First National Bank of Chicago), Reuben
Mettler
TR W)', La?6 Kirkland (AFL-CIO)/ Douglas Frastr pfiSii dvA
UnJt^V w
t0 w°rkers); Jesse Jackson (director, Operation AllS^ president,
Urban League), Rev. Jimmy

TaiSnbinm Tim h®ad' SToutihtrn BaPfcist Convention), Rabbi Marc
Tanenbaum (American Jewish Committee), and Terence Cardinal
203

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sessions concluded, Carter reviewed the energy PRMs from
Eizenstat and prepared his final energy address to the nation.
Speaking from the Oval Office on Sunday evening, July 15,
Carter delivered one of the most important speeches of his
career. Described by the New York Times as "part homily, part
program," Carter devoted approximately half of his remarks to his
concern over the crisis of confidence and spirit that he believed
pervaded the nation. Calling it "a fundamental threat to American
democracy," Carter described "a crisis of confidence. . .that
strikes at the very heart and soul and spirit of our national
will." Listing symptoms of this crisis of confidence Carter noted
the growing disrespect for government, churches, and schools,
acquisitiveness, narrow self-interests, and a general paralysis,
stagnation, and drift" as signs that American society had lost
its moral and spiritual footings. As he concluded his remarks on
this crisis of confidence, Carter shifted the focus of the speech
and declared that "energy will be the immediate test of our
ability to unite this nation. . . .and seize again control of our
common destiny." He then outlined the far-reaching steps his
administration
Cooke. He also met with governors, mayors, and economists. For a

complete list of those who participated in the Camp David
meetings, see "Camp David Advisers: Who Carter Met,"
Congressional Quarterly. 14 July 1979, p . 1393.
204

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would pursue to end the nation's dependence on imported
oil.44
His most ambitious proposal called for the creation of an
independent, congressionally-chartered Energy Security
Corporation (ESC) to develop synthetic fuels. Modelled after the
Reconstruction Finance Committee, the ESC would receive 88
billion dollars in revenue from the windfall profits tax over a
ten—year period with a total energy savings target of 1-1.5
million barrels of oil per day by 1990. Carter also proposed the
creation of an Energy Mobilization Board empowered to speed
construction of energy projects such as pipelines and refineries
and expedite local, state, and national permit policies if
necessary. Carter sought to use another portion of the windfall
profits t&x revenue to fund his earlier proposals on solar
energy. Additionally, he would seek to direct 16.5 billion
dollars in windfall tax revenue to fund mass transit systems over
the next decade. The president pledged to pursue another standby
gasoline rationing gas plan, and declared that he would limit oil
imports to 1977 levels of 8.6 million barrels per day using the
powers granted him by the Trade Expansion Act of 1953.45
_ Hedrick Smith, Part Homily, Part Program," New York limes,

16 July 1979, p. 1; Public Papers of the Presidents. ^my
Carter, 1979, (Washington, D.C." Government Printing Office,
1980), pp. 1235-41;
y
^ 239^241 PaPerS of the Presidents:

Jimmy Carter. 1979.
205

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Perhaps due to the urgency for action created by gasoline
shortages, Congress and the public reacted more favorably to the
Carter initiatives than they had to any of his previous proposals.
Senate minority leader Howard Baker said the program warranted
bipartisan support and Texas Democrat Lloyd Bentsen, a frequent
critic of the administration's energy policies, pledged his
support, noting that Carter "certainly deserves the support of
Congress and I will certainly support him." Majority leaders Byrd
and Wright both predicted most of the legislation would receive
congressional approval no later than early fall, and Wright
forecast that the House would act on the synfuels and EMB
provisions by the August recess. Speaker O'Neill called it the
best speech Carter had ever made, and Republican Senator Jacob
Javits praised Carter's broad approach to the problem. Irving S.
Shapiro, chairman of DuPont and a board member of the business
roundtable, called the president's plan "sensible," and AFL-CIO
leader George Meany, who opposed most of Carter's economic
policies, endorsed the plan. A CBS News/New York Times poll taken
the night following the speech found that Carter's approval rating
jumped 11 points from the previous week (26% to 37% approval) and
that 77 percent agreed with his discussion of the crisis of
confidence in the country.4® 46
46Thomas
C. Hayes, "Business Praises Carter Concept," New
York Times, 17 July 1979, p. A11; Ann Pelham, "Congress Ahead of
the Game on Energy," Congressional Quarterlyr 21 July 1979, p.
1436; "Meany Backs Energy Program," New York Tines. 17 July
206

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Carter briefly lost some of the momentum from his speech
two days later when he requested "pro-forma" resignations from the
cabinet and senior staff. The president later explained that he
intended this action to demonstrate his willingness to redirect
the administration. Over the next two days, he accepted the
resignations of five cabinet officers—Schlesinger, Blumenthal,
Attorney General Griffin Bell, HEW secretary Joseph Califano, and
Transportation Secretary Brock Adams. Liberal Democrats expressed
outage over the firing of Califano, though few if any disagreed
with Schlesinger's resignation. Rather than signal his resolve to
strengthen the administration, the sudden manner in which Carter
conducted the cabinet house cleaning, re-opened questions about
his ability to lead and temporarily diverted attention from his
energy proposals.
Although the controversy surrounding the cabinet changes
subsided, Carter's desire to get his energy program through
Congress also was hindered by the August recess. By the time
Congress adjourned on August 2, none of the new energy proposals
had been acted upon by both bodies, although the House did approve
a standby gasoline rationing bill on July 31 in a 234—189 vote.
While Congress was in recess, Carter reorganized his energy team
for the last time. Now focused on legislative enactment rather
than
1979, p. A12; Adam Clymer, "Speech Lifts Carter to 37%; Public

Agrees on Crisis of Confidence," New York Times. 18 July 1979 p.
A1. ““ ' '
207

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policy development, he designated associate OMB director Eliot
Cutler to coordinate the activities of all staff and agencies in
regard to energy policy. Relying primarily on representatives from
OMB, the domestic policy staff, and the Department of Energy,
Cutler created sixteen "lead units" to oversee the energy
proposals. Each unit would be responsible for developing and
refining a general work plan to accomplish assigned objectives.
The unit then would undertake appropriate consultations with
Congress, solicit the support of relevant staff and agencies as
needed, and organize public support through Anne Wexler. Carter
and Cutler hoped this more formalized organizational structure
would improve communication with legislators and speed the
progress of the proposals through Congress by the end of the year.
Summarizing his charge to the lead units to oversee the enactment
of the legislation by the end of the year, Cutler remarked, "We
have five months to accomplish our goals, we do not have time for
task forces and lengthy consideration by committees."47
As Congress returned from its August recess, Carter's
lobbying effort received its strongest boost to date from public
opinion. Stung by the disruptive gas shortages of the summer,
public opinion shifted dramatically on energy issues. In contrast
to the lukewarm public interest in
Memorandum, Eliot Cutler to Hamilton Jordan, Subject:

Enactment of the President's Energy Program, 30 July 1979,
Jordan Collection, Jimmy Carter Library, Atlanta, Georgia.
208

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energy during the 1977 and 1978 battles over energy policy, polls
in late summer and early fall consistently showed that almost half
those surveyed saw energy as a "very serious problem" and one
third saw it as "fairly serious." As noted earlier, party leaders
in both houses expressed confidence that the bills would move
quickly through the Congress. The optimism felt by both the
administration and energy supporters soon disappeared, however, as
it became clear that the measures would become entangled in
partisan and jurisdictional squabbling. The rationing bill, for
instance, expected to pass before the August recess, did not
receive final approval from Congress until October 23, long after
the gas lines of summer had disappeared. Although the delays
resulted partially from differences over the costs of the
programs, a more serious impediment to energy legislation proved
to be the morass of committees and subcommittees continually
amending the proposals and slowing the legislation. In the House,
for instance, energy legislation fell under the jurisdiction of
six major committees and dozens of subcommittees. The
jurisdictional debate over the synfuels bill further illustrated
the committee gauntlet in Congress. The House Education and Labor
Committee claimed jurisdiction over synfuels on the basis that a
portion of the bill would create jobs financed by the
Comprehensive Employment and Training Act. Likewise, the Banking,
Finance, and Urban Affairs committees also used obscure House
rules to claim jurisdiction on the bill.
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Despite these obstacles and the growing delays in enactment of the
proposals, however, Carter's and Cutler's lead units continued
working with Congress in the hopes of pushing the proposals
towards enactment by year's end.
As Carter's energy legislation languished on Capitol Hill/
international events provoked renewed attention to the U.S. energy
situation. At approximately 3:30 am eastern standard time on
November 4, 1979, Elizabeth Ann Swift, the political officer
assigned to the U.S. embassy in Teheran, placed an urgent phone
call to the State Department's Operations Center. Iranian
demonstrators protesting outside the embassy compound had broken
through the gates and surrounded the chancery building. An hour
and one-half later, she phoned again to report that the protesters
had broken into the building and were binding the hands of embassy
personnel. "We're going down," she said, and then the phone went
silent. As the world would soon learn,
Iranian militants had seized the embassy and taken sixty- three
Americans hostage.48
The Iranian hostage crisis, which would last for 444 days,
was but the first of a series of disturbances in the Middle East
that gave added weight to Carter's earlier
48
The admittance of the Shah to the U.S. for medical
treatment was the pretext for the militants' action. Although
Carter initially refused to allow the Shah to enter the country,
appeals from Henry Kissinger, David Rockefeller, John McCloy,
and a number of Sate Department officials caused Carter to
change his mind. On October 23, 1979, the Shah arrived in New
York City for cancer therapy. Yergin, The Prize, pp. 699-70. --
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warnings about the U. S. s dangerous dependence on imported oil.
Just weeks after the taking of hostages in Teheran, members of a
fanatical Islamic sect seized the Grand Mosque in Mecca, Saudi
Arabia and held hundreds of pilgrims hostage. Although the Saudi
army regained control of the Mosque after a bloody, two-week
siege, the episode showed that even the U.S.'s largest supplier
of imported oil was not immune to the unrest that appeared to be
spreading throughout the oil-rich region. Two days after
Christmas, more shocking news came out of the increasingly
volatile Middle East as a wave of 80,000 Soviet troops crossed
the border into Afghanistan and seized control of the nation.
The influx of Soviet troops gave rise to fears that the Soviet
Union had designs on securing control of either the region s oil
fields or the Persian Gulf waterways through which oil shipments
passed.
As turmoil spread in the Middle East, so did fears of
another energy shortage in the United States. Yet these events
also legitimized the urgency with which Carter had approached
energy issues and gave the president political leverage to force
Congress to act on his proposals. For almost three years, and
with only sporadic success, Carter had attempted to focus the
nation's attention on the need to alter its energy consumption
habits. No amount of rhetoric, however, could equal the impact of
the invasion of Afghanistan and the taking of hostages in Iran.

Furthermore, Carter's handling of the hostage situation and
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then the Afghanistan invasion received resounding approval from
the public. Within four weeks of the embassy siege, the Gallup
Poll reported that Carter's approval ratings had doubled from
thirty percent to sixty-one percent, the largest increase in
presidential popularity ever reported by the poll.49
The surge in the president's popularity, combined with the
increasingly threatening international situation, provided new
incentives for Congress to move forward on Carter's energy
proposals. By February, 1980, House and Senate conferees endorsed
a compromise windfall profits tax. Under the proposal agreed to
in conference, the federal government would receive 227 billion
dollars in tax revenue from the oil industry over a ten year
period (compared with the permanent tax Carter favored that would
have netted 296 billion dollars). Final action on the bill,
however, was delayed by attempts of oil-state legislators to
weaken the tax. Carter, however, continued to remind legislators
of his earlier pledge that if the proposal was weakened any
further, he would recommend "additional proposals to the Congress
which could be quite punitive to the oil industry."50 Carter's
fight against oil-producing interests received an additional
boost from the oil
49Gallup 1980, p . 5
50
First quoted in Ann Pelham, Senate Energy Committee
--- Weakened
Passes --- UJ. uii Windfall
Version Profits Tax."
of Oil
Congressional Quarterly. 27 October 1979, p. 2414.
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companies themselves. In what Time magazine called "Big Oil s
profit parade," financial statements released in February showed
record profits for the industry during the previous year. Exxon
reported net earnings of 4.3 billion dollars, a 55% increase. The
other majors reported even larger boosts in income. Mobil's
profits jumped 78%,
Getty s 83%, and Texaco s, 106%.^ Faced with consumer outrage
over industry profits and Carter's threats to introduce harsher
measures, both houses of Congress resisted efforts by industry
supporters to hold additional hearings on the bill. On March 13,
the House adopted the tax proposal in a 302-107 vote. Two weeks
later, the Senate took similar action and approved the bill 66—
31.^
Like the windfall profits tax, Carter's 88 billion dollar
synfuels proposal was slowed down following initial expectations
that it would move quickly through Congress in
51"Taxing Big Oil," Time, 4 February 1980, p,

70
52
in the Senate, eight Democrats joined with twenty-three
Republicans in opposing the bill (seventeen Republicans voted
for the bill). All eight Democrats were from either conservative
southern states or oil producing states. In the House, thirty
nine Democrats joined 68 Republicans in voting against the bill.
Twenty-six of the Democrats opposed came rom oil—producing
states Oklahoma, Texas, and Louisiana. "CQ Senate Votes 57-64,"
Congressional Quarterly. 29 March 1980, P- 881 ; Congressional
Quarterly Almanac. 1980 (Washington, D.C.: Congressional
Quarterly, Inc., 1981), pp. 38H-39H. For more on the synfuels
debate, see "Senate Finance Committee Has A Long Way to Go on
Windfall Profits Tax Bill." Congressional Quarterly, 8 September
1979, p. 1915; Ann Pelham, "Conferees Near Finish Line on Oil
Windfall Profits Tax," Congressional Quarterly, 23 February
1980, p. 541; Pelham, "Congress Clears
^?25mark Proflts Tax," Congressional Quarterly. 29 March I yoU, p.
843.
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1979. Unlike the windfall profits tax, however,
environmentalists, not the oil industry, led the fi^ht against
synfuels. Since Carter first embraced the idea of 3- government
subsidized synfuels corporation in July, organized environmental
groups such as the Sierra Club complained that the production of
synthetic fuels (which chiefly involved the liquification of coal
and shale to produce oil) would wreak havoc on the environment.53
in addition, some liberals in Congress argued that the
administration should devote more federal dollars to provide
energy relief to low income groups rather than spend it on
synfuels production.54
Although Congress refused to divert the 88 billion dollars
in windfall profits tax revenue to synfuels as Carter had sought,
it did agree to the creation of a scaled down $20 billion dollar
corporation that would subsidize and promote efforts by private
industry to develop synfuels legislation. Also, seeking to
placate environmentalists' fears, the Carter administration
worked with Energy chair Jackson to include a number of other
palliatives in the bill
Ênvironmental groups alleged that the possible

environmental risks of synfuels included: strip mining of coal
on an unprecedented scale; exploitation of vast tracts of public
land; heavy commitment of scarce water supplies* release of
carcinogens and toxins from the production process* and
increased release of carbon dioxide from synfuels use! Philip
Shabecoff, Environmentalists Fear A Retrenching bv Carter, New
York Times. 17 July 1979, p. D12
54Steven
V. Move Roberts, "Congress Returns
on Energy," With a Mandate to New York
Times. 6 September 1979, p.
A19. 214

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such as the solar energy bank and subsidies to encourage the
production of methane from urban waste. To attract the support of
legislators from rural areas, the bill also called for 1.45
billion dollars in subsidies for the production of gasohol from
agricultural products. After months of debate over the scale and
the scope of the program, Congress approved the conference
compromise in late June.55 When reporters suggested to synfuels
advocate Senator J. Bennett Johnston that the bill resembled a
cookie jar with something for everyone, Johnston simply replied,
"All of the cookies are good for the country."56
Public outrage over skyrocketing oil company profits and the
promise of federal subsidies for new energy production helped
force Congress to act on the windfall profits tax and synfuels
legislation. Yet, as with the 1978 national Energy Plan, Carter's
victories were only partial. Unlike the permanent program he
originally proposed,
Congress backed a windfall profits tax that would be phased out
within the next ten years. Carter also had hoped to tie all. of
the profits tax revenue to energy conservation efforts such as
synfuels, tax credits for lower income
Perhaps indicating the broad range of subsidies the bill

contained (as well as the alchemic appeal of the bill to the
public—making oil from rocks), the synfuels legislation had
overwhelming support. The House voted 317-93 (Republicans 85
65, Democrats, 232-28) in favor, while the Senate approved m a
78-12 vote (Republicans 26-11, Democrats 52-1).
56Ann Pelham, "Synthetic Fuels Bill Nearly Ready for Carter,
Congressional Quarterly. 21 June 1980, p. 1691.
215

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families hard-hit by rising energy costs, and the solar energy
bank. Congress, however, allocated only a portion of the tax
revenue to conservation programs. In addition to these setbacks,
Congress tabled Carter's proposal to create an Energy Mobilization
Board to speed the development of energy resources, citing
concerns over the power the board would wield. Congress also
stripped Carter of his executive authority to impose a $4.62 fee
on each barrel of imported oil as he had promised in July 1979.
Designed as a means to limit the nation's reliance on imports, the
import fee would have been passed on to consumers in the form of a
ten cents a gallon surcharge on gasoline purchase. With the
election season fast approaching and concerns about inflation
running rampant, Democrats and Republicans, consumers and
producers rallied together to overturn Carter's action. Following
Carter's veto both the House and Senate voted overwhelmingly to
override in respective votes of 335-34 and 68-10. The vote was a
final stinging reminder to Carter of the hazards of pursuing
policy that had widely distributed costs for the present
generation and benefits (reduced imports) only for future
generations.
On the afternoon of June 30, 1980, in a scene reminiscent of
the formal signing of the Camp David Peace Accords, dozens of
high-level government officials, cabinets officers, senators, and
representatives took their seats in chairs set up on the South
Lawn of the White House. At
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approximately four o'clock, President Carter walked out of the
Diplomatic Reception Room and took his place behind a podium set
up in font of the assembled dignitaries. "This is a proud day
for a America," Carter said, "the keystone of a national energy
policy is finally being put in place. Our accomplishments are
historic, but are work is not yet complete."57 The president then
signed into law the Energy Security Act.58 It would be the last
* 1
major energy legislation bearing his signature.
57 .
Public Papers of the Presidents: Jimmv Carter. 19801981
(Washington, D.C.: Government Printing Office, 1981), p.
1 252.
CO
The Energy Security Act created the Synthetic Fuels

Corporation and earmarked additional federal funds for solar
energy programs, gasohol development, and other alternative
conservation measures.
217

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CHAPTER VII
CARTER'S DEFEAT AND THE DISMANTLING

OF HIS ENERGY POLICY
Carter had intended the signing of the Energy Security Act
to mark a new beginning for the federal development of
alternative fuel sources and conservation programs; however, it
actually signaled the end of his energy policy initiatives. By
the summer of 1980, the upcoming presidential election and the
deteriorating economic situation made new energy initiatives all
but impossible. With the election only months away, a new term,
"stagflation," entered the American lexicon as both inflation and
unemployment increased throughout the year.
The rate of unemployment rose from 6.2 percent in January to 7.6
percent in May, while the annual rate of inflation, which peaked
in the first quarter of 1980 at 18.2 percent, continued at a
double-digit pace during the summer.1 By
' American s dissatisfaction with the economy translated
into record low popularity for the president. A Gallup poll taken
at the end of the month gave Carter an abysmal twenty- one
percent approval rating, a rating lower even than that of Richard
Nixon on the eve of his resignation.* 2

Energy
^ ^President Carter. 1980 (Washington, D.C: Congressional

Quarterly, Inc., 1981), p. 7.
Horace Gallup, The Gallup Poll, 1980 (Wilmington, Del.:
Scholarly Resources, 1981), pp 158-9.
218

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policy, which had commanded so much of the president's attention
during the previous three and a half years, became subsumed in
Carter's efforts to deal with economy and secure reelection.
The Election of 1980
Although energy policy issues no longer dominated the
administration s (or Congress's) policy-making agenda, they became
a highly visible and contentious issue during the 1980 political
campaign. Carter, as expected, defended his record on energy and
called his programs a "new foundation for challenging and exciting
progress."3 The drops in both oil imports and consumption over the
preceding four years, he argued, provided strong evidence of the
programs' early successes. Not surprisingly, the president's
political opponents challenged this assessment.
Senator Edward Kennedy, Carter's principal rival in the
Democratic primaries, assailed the president's support of oil and
natural gas deregulation and charged that the decision to end
controls on oil pricing had betrayed the party's ideals and
commitment to economic fairness. Kennedy continued to criticize
the president's energy program during the summer of 1980. With the
senator's encouragement, his supporters attempted to insert a
provision in the party's platform that called on "the next
Democratic administra
tor 3"'Jimmy Carter Acceptance Speech," in President Carter.

1980. p. 73. —
219

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tion. . .to reimpose price controls on oil and gas."4 When
the platform amendment failed to win delegate support at the
Democratic convention, Kennedy used his concession speech to
reiterate his stance on Carter's policy and argued that "a
Democratic energy policy must oppose the decontrol of gas
and oil prices."5
While Kennedy faulted the president for reducing
federal regulation of the oil industry, Carter's Republican
opponent, Ronald Reagan, charged that Carter's policy
provided over-regulation of the energy industry. As with
his views on other domestic problems such as inflation and
unemployment, Reagan claimed that blame for the energy
crisis resulted from government interference in the free-
market. As early as 1978, Reagan had asserted that "our
problem isn t a shortage of fuel. It's a surplus of
government."5 Unlike the gloomy pronouncements of Carter,
who stressed conservation and warned of the future scarcity
of petroleum resources, Reagan argued that the nation had no
shortage of petroleum and even stated that the Alaskan oil
fields alone would yield more oil than Saudi Arabia. "The
truth, Reagan claimed, "is America has an abundance of
Comparison of Platform Planks," New York Times. 26 June

1980, Section II, p . 9.
5Maurice Carroll, "Kennedy Decries Party's Platform As Union

Cheers, New York Times. 26 June 1980, p. 1 and p. B9.
. Anthony J. Parisi, "Reagan Wants a Different Energy

Policy; What Is It?' New York Times. 27 July 1980, Section IV,
p. 3.
220

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energy, but the policies of [the Carter] administration
consistently discourage discovery and production."7
In contrast to Carter, Reagan called for an almost complete
withdrawal of the federal government from energy issues and
championed an energy policy that involved the elimination of the
Department of Energy, the immediate and total decontrol of oil
and gas pricing rules, a cut-back in the synfuels program, and
the repeal of the windfall profits tax. The Republican also
advocated relaxing environmental and safety regulations to permit
the construction of more nuclear power plants and additional oil
exploration in environmentally sensitive regions such as Alaska
and the outer continental shelf. Solving the nation's energy
woes, Reagan repeated throughout the campaign, was primarily a
matter of getting government off the back of the industry and
"putting the market back to work."8
As the Republican and Democratic parties convened for their
conventions in the summer, their differences on energy issues
became even more pronounced. Republican delegates meeting in
Detroit embraced Reagan's views on energy and incorporated them
into their platform. The platform's nine paragraph statement on
energy policy took issue with virtually every aspect of Carter's
program. Echoing
7Douglas E.
Kneeland, "Reagan Charges
LJ. S. on Threat Carter Misleads to Energy
September 1980, Security," New York Ti mpS.
Section IV, p. 17. ----------------
The—Candidates. 1980 (Washington, D.C
Enterprise Institute, 1980), p. 67. American
221

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Reagan's views on the solution to the nation's energy woes, the
platform stated that "the proven American values of individual

9
enterprise can solve our energy problems." Like Reagan, the
platform stressed the need to reduce government interference in
the energy industry and embraced nuclear power. The platform also
called for revisions of the "cumbersome and overly stringent"

10
Clean Air Act in order to maximize the uses of high-sulfur coal.
Finally, the platform flatly rejected Carter's attempts to
encourage conservation through tax measures that "artificially

11
suppress energy consumption." The sweeping repudiation of
Carter's energy program and the overall tone of both the
Republican platform and Reagan's positions on the energy
situation prompted the editorial board of the New York Times to
comment that the Republicans "seem[ed] more interested in mocking

12
the idea of a serious energy program than in proposing one."
Meanwhile, following the defeat of Kennedy's platform
amendment on decontrol, delegates at the Democratic convention
united behind Carter's energy program and condemned Reagan's
energy proposals. The delegates
July 1980<JepPt14fr°m Republican

Platform," New York Times. 13
1
°Ibid.
11
1bid.
198o/s7rtionQIv!tip0n20f0r Detr0lt'" M*--York Times, 13 July
222

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repudiated their own party's 1976 platform that had called for
continuing controls on oil and gas and endorsed Carter's decision
on decontrol as a "necessary [step] to reducing our dependence on

13
foreign oil." in contrast to the Republicans, the Democratic
party platform called for the continuation and expansion (as
needed) of Carter's conservation and synthetic fuels initiatives
and argued for increased oversight of nuclear power. Also, unlike
the Republican platform which endorsed nuclear power, the
Democratic delegates called for the phasing out of nuclear power
plants as safer, alternative fuels became available. Finally the
platform attacked any efforts to weaken substantially
environmental legislation in order to increase energy production.
Even as the Republicans argued that the solution for the energy
problem rested with increasing production, the Democrats adopted
Carter's conservation approach to energy policy.
On energy issues, the two nominees shared no common ground.
Reflecting their fundamentally different political and personal
philosophies, Carter and Reagan approached energy policy from
opposite perspectives. As with other pressing domestic and
international problems, Carter stressed the need for patience and
persistence in dealing with highly complicated problems. In
Carter's opinion, there were no quick and painless solutions to
the energy
3
! j:C°mparison of Platform Planks," New York TH maa. 26
June 1980, Section II, p. 9. ^
223

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problem. Only through shared sacrifice and a willingness to use
less energy could the nation overcome the energy crisis. He
condemned Reagan for offering "simplistic solutions" that relied
too heavily on private enterprise and the oil industry to rescue
the nation from energy uncertainty. Reagan's program, claimed
Carter, would "put all our eggs in one basket and give that
1,14
basket to the major oil companies.
Reagan did not dispute Carter1s charges regarding the
simplicity of his approach to energy issues. Reagan repeatedly
argued the nation's energy disruptions would cease once the
federal government allowed private industry to operate freely. At
a campaign stop in Greensburg, Pennsylvania, the Republican
nominee rhetorically asked,
"Does it take a genius to figure out that the answer to our
having all we need and no [longer] being dependent on OPEC is to
turn the energy industry loose to produce all the oil and the
14 15
natural gas that is to be found here [in the United States]?"
Supporting this contention, Reagan argued that the nation had an
abundance of cheap energy supplies until the federal government
began regulating the industry in the late 1960s and early 1970s.
He condemned the Carter programs as either detrimental to energy
production, or, at
14"Debate Between
Carter and Reagan," President Carter
1980, p. 84. * '
15
Adam Clymer, "Carter Riddles vs. Reagan
Answers, New York Times. 14 April 1980, Simple
Section II, p. 10.
224

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the very least, a waste of taxpayer money. He frequently remarked
at campaign rallies that "the Department of Energy has a multi-
billion dollar budget. . .[yet] it hasn't produced a lump of

16
coal, or anything else in the line of energy." Whereas Carter
stressed the need for shared sacrifice in dealing with energy
issues, Reagan responded that energy abundance could again become
the norm. So optimistic were Reagan's pronouncements on the
nation's energy future under a Republican administration that
several oil company executives quietly expressed concern over his
projections. According to one energy expert, the industry
"like[s] [Reagan's] spirit, but they don't think he's very well
17
informed on the subject." Despite those who questioned Reagan's
appraisal of the energy situation, however, the Republican
nominee successfully placed the blame for energy shortages on
Carter's policy-making.
The debate over energy, however, was secondary to the
discussion of economic and foreign policy issues. A New York
Times/CBS News poll taken weeks before the election indicated
that only three percent of those polled cited energy as the most
important problem facing the nation. Commenting on the lack of
interest in energy issues, one voter noted that she "wondered if

* 1
we're all energied
l6"Transcript of the Carter-Reagan Debate," New York Times,

29 October 1980, p. 28.
17
Parisi, "Reagan Wants a Different Energy Policy," Section
IV, p. 3.
225

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out. . . .We've heard about it for such a long
time. . .we've been through so much. . . .maybe people have

18
had enough with the whole energy thing."
Regardless of the reasons for the lack of interest in
energy policy, however, the state of the economy attracted most
voters' attention. In the face of high inflation, rising
unemployment, and a stagnating economy, Carter could not regain
the electorate's support. Furthermore, the Iranian Hostage Crisis,
which initially caused Carter's approval ratings to soar, became a
political liability by the time of the November election. The
image of Americans held captive in Iran for almost a year only
intensified the perception that Carter could handle neither the
economic nor international pressures confronting the nation.
Reagan's promises of a return of U.S. power both internationally
and economically resonated with the electorate and seemed to be
the answer for the crisis of confidence that Carter had spoken of
the previous year, in November, the American people overwhelmingly
rejected Carter's leadership in favor of the alternative offered
by Reagan. Carter, the first elected president voted out of office
since Herbert Hoover in 1932, garnered only 41% of the popular
vote and lost the electoral vote of all but five states and the
District of Columbia. Following this defeat, Carter devoted his
last
18
E. D;*’c,nfie'
y.r'' "A Shifting Wind Alters
J. Energy and as Political Issues in
Environment Presidential Race," New 28 October
York Times. 1980, p. 25. --------------------------------------
226

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three months in office to securing the release of fifty-four
Americans held hostage by Iranian militants. Yet even here,
success would be denied him as the Iranians refused to release the
hostages until the moment Ronald Reagan became president on
January 20, 1977.
The End of a Presidency and a Policy Late in the
afternoon of January 20, 1981, a cold winter rain fell as a Marine
helicopter landed beside a red clay softball field in the tiny
town of Plains, Georgia. As had occurred so often in the past,
music greeted its arrival and a crowd of onlookers anxiously
strained to catch a glimpse of the aircraft's passenger. Unlike
previous occasions, however, the remorseful strains of Tom T.
Hall's "Old Dogs and Children and Watermelon Wine" rather than
regal chords of "Hail to the Chief" signalled the arrival of the
town's most famous citizen. Looking much older than his fifty-six
years, a visibly exhausted Jimmy Carter stepped out of the
helicopter and addressed the cheering crowd. For the first time in
four years, Jimmy Earl—as the locals called him—had returned to

19
Plains as a private citizen.
Carter's homecoming marked the end to both his political
career and his energy program. Eight days after
19Joseph
Albright, "Carter Comes Back to Plains Cheers After D.C.
Pathos," Atlanta Constitution. 21 January 1981, p.
1; Lewis Grizzard, "Jimmy Earl, A Tired, Drained Man." Atlanta
Constitution. 21 January 1981, p. 1.
227

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taking office, Reagan fulfilled his first energy policy campaign
pledge and abolished (by executive order) the remaining controls

20
on oil prices. Unlike Carter's decision to deregulate oil
prices, Reagan's action went virtually unchallenged by the more
conservative Congress elected in 1980. Less than a month later,
Reagan submitted his 1982 budget proposal to Congress. Among
other cuts, Reagan proposed substantial reductions in the federal
government's energy conservation programs. The Department of
Energy's fossil energy research program would be reduced by 45%,
the solar development fund by more than 50%, energy supply
programs by 34%, and miscellaneous other conservation programs by
70%. Alcohol fuels subsidies and solar subsidies would be

21
eliminated altogether. in the final budget approved by
Congress, Reagan won $2.4 billion in reductions from the proposed
Carter conservation program budgets. Although Reagan could not
marshall congressional support for abolishing the Department of
Energy, he redirected the agency's activities through the budget
process. By the mid-1980s, the Department's focus had shifted
away from conservation and energy development programs to nuclear
research and testing.
20 .
As noted previously, Carter had ordered a phased-in decontrol of
prices that began in June 1979. By January 1980,
only 20-25 percent of domestically produced oil remained under
controls.
21|| 1 16
_ 'l" !* Reagan Budget: 83 Programs in Profile." New York
Times, 20 February 1981, p. 12.
228

without permission.
The changing world energy situation sealed the fate of the
remainder of Carter's energy initiatives, including the once
highly touted Synfuels Corporation. Beginning in 1982, the price
of oil began a precipitous decline that continued until 1986. A

22
confluence of several factors contributed to the drop in prices.
The economic recession that gripped much of the industrial world
during 1980-1982 caused a significant drop in energy demands as
industrial users reduced their consumption needs. At the same
time, Carter's 1979 commitment to deregulation of domestic oil
prices spurred additional exploration efforts while the higher
deregulated prices also curbed demand. As domestic oil prices
reached highs of thirty-four dollars a barrel (compared with the
pre-1979 prices of approximately thirteen dollars a barrel),
marginal wells became profitable and production and exploration
of these sites increased. Technological advances also contributed
to increased production. The use of the chemical additive
"slickem," for instance, increased the flow of oil in the Alaskan

23
pipeline from 1.7 to 2.1 million barrels per day. New production
fields in Alaska, Mexico, and the North Sea produced greater

•
yields than expected and further contributed to an increase
22f Y overview of the

• w l oil glut of the early to mid-1980s is based
on the analysis found in Daniel Yergin, The Prize:
, E P i c — f o r — — M o n e y , and Power (New York:
Touchstone, 1992), pp. 717-19 and Energy and Environment: The
Unfinished --- Business. (Washington, D.C.: Congressional
Quarterly, Inc., 1985), p. 9.
23 Daniel Yergin, The_Prize, p. 717.
229

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in supply. Ironically, the conservation measures that Reagan
frequently ridiculed in the 1980 campaign contributed
significantly to the drop in oil prices. By 1985, the United
States was twenty-five percent more energy efficient and thirty-
two percent more oil efficient than it had been

• *)yl
m 1973. Total energy consumption in the United States actually
dropped from 74.2 quadrillion Btu's in 1973 to 73.9 quadrillion
Btu's in 1985.25 As a result of increased domestic production and
declining consumption, imports' percentage of oil used by the
United States dropped from 47.8 percent in 1977 to 32.2 percent
in 1985.26
Because of these factors, by 1985 an oil glut flooded the
world's energy markets and oil prices reached historic lows. By
the end of 1985, crude oil prices had fallen to fourteen dollars
a barrel after hitting highs of thirty-four dollars a barrel in
1981. With the return of cheap and abundant oil and increased
pressure to balance the federal budget, many policy-makers saw
energy conservation programs and alternative fuel development
programs as wastes of limited taxpayer dollars. With oil prices
reaching new lows, synthetic fuels could no longer provide a cost
competitive alternative. Responding to these changes in the
24
Yergin, The Prize, p . 718.
25"Energy
Overview," Monthly Enemy Review.
1996, p. 3. February
^ /•
"Overview of U.S. Petroleum Trade," Monthly Enemy
Review. February 1996, p. 15.
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energy markets, Congress abolished the synfuels corporation in
1985. The Carter-era tax credits to encourage conservation,
widely regarded as unnecessary in the fuel rich year of 1985,
fell victim to the 1986 tax reform law.
In the late afternoon of April 18, 1986, a small group of
federal workers gathered at 2121 K Street in Washington, D.C. to
finish boxing files and personal belongings.
Working under banners that read "It's All Over, Baby," the
remaining staffers of the Synthetic Fuels Corporation met
together for the last time before the agency officially ceased to
exist.^ The next day, President Reagan addressed the nation on
energy issues. As his predecessors had done, Reagan sought to
call the nation's attention to an energy problem that was causing
many Americans to "suffer a dramatic loss of income" and forcing
many small businesses to face bankruptcy. He asked the American
people to show "a sense of compassion and concern for the
individuals" who bore the brunt of this new energy problem.^
Unlike his predecessors' addresses on energy, however, the energy
problem of which Reagan spoke was not one of scarcity but of
over—abundance. The individuals being hurt were not
2 711
-S
"^ - Synthetic Fuel Corporation Shuts Down," New York
Times., 19 April 1986, p. 46. --------
28 •
Public P.apers of the Presidents: Ronald Reaoan. 1986
29 *
Public Papers of the Presidents: Ronald Reagan. 1986.
P. ■
231

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consumers forced to pay higher energy costs, but producers who
could not sell their oil. For the moment at least, the energy
conundrum that had consumed the Carter presidency ceased to exist.
The Carter Energy Policy in Political Context The story
of Jimmy Carter's quest for a national energy policy reveals much
about both the Carter presidency and the challenges of governing
in the late 1970s. Perhaps no other policy initiative of the
Carter administration better demonstrates Carter's approach to
governing as does energy. The decision to make energy policy his
first domestic policy priority resulted not from an electoral
mandate, an immediate crisis, or calls for action from either
Congress or the public. Rather, Carter based his decision largely
on the belief that as president, he bore the moral responsibility
to identify national problems that could be dealt with through the
exercise of presidential power and initiative. Carter's conception
of presidential leadership as practicing the politics of the
public good (to borrow Hargrove s terminology) meant that he would
pursue policies regardless of their immediate political benefits.
This was clearly the case with energy policy, as demonstrated by
the lukewarm response of both the public and Congress to Carter's
energy proposals.
In energy policy, one also sees Carter's basic approach to
policy-making. Once he identified energy as an area
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requiring urgent attention, Carter sought rational, comprehensive
solutions to alter the nation's energy consumption habits. Fearful
of the influence of interest groups and disdainful of political
horse-trading, Carter attempted to circumvent traditional policy-
making processes by using a confidential task force that could
evaluate policy options on the basis of merit rather than
political considerations. By employing this process, Carter sought
to achieve the most rational and effective policy possible. He
would seek compromise only if his initial legislative ®ffo^"ts
failed to secure enactment of the policy. Further demonstrating
his commitment to governing in the "national interest, Carter
sought to mobilize grass-roots support of his proposals as a means
of blunting the influence of interest groups on Capitol Hill. His
decision to pursue policy in this manner, however, entailed
substantial P°Hkical costs. Carter alienated members of Congress
and interest groups by failing to consult extensively with them,
and he used much of his political capital in pursuing public
policy that had no highly—organized constituency.
Many critics have cited this approach to energy policy as an
example of the incompetence of Carter's presidential leadership.
Emphasizing his failure to consult adequately with Congress and
his insistence on sweeping energy policy changes, these critics
charge that Carter brought upon himself four years of unnecessary
conflict over energy policy. While there is certainly some
validity to their
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assessments, Carter's critics fail to consider fully the
political environment of the late 1970s and the effect it had on
Carter's presidency. In The Politics Preslctent-g

:
Leadership from John Adams to George Bush (1993),
Stephen Skowronek argues that Carter served during a period of
political "disjunction." According to Skowronek,
Carter—like Herbert Hoover and John Quincy Adams—took office at a
time when established commitments were beginning to be called
into question by the public as failed or irrelevant responses to
the problems of the nation. As a result, Carter faced a daunting
leadership situation. To affirm and continue the party's
established commitments would identify the president with
failure, yet repudiating the establishment legacy (in Carter's
case the FDR-LBJ legacy of liberal regulation) would isolate the
president from his natural political allies and lead to political
impotence. As a result, presidents during periods of disjunction
lack a degree of legitimacy and frequently stress their
comprehension of and desire to solve the nation's problems as a
means of justifying their leadership. This can create even more
hazards for the president, because he risks becoming "submerged
in the problems he is
addressing and finds himself an easy caricature of all that has
gone wrong.
°cL a desfriPtion of the politics of disjunction see K Skowronek,

The Politics Presidents Make: Leadership Rp?!fnanhp'Adams to
Cjeorqe Bush (Cambridge, Massachusetts: The Belknap Press of
Harvard University Press, 1993), pp. 39-41.
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In regard to energy policy, Carter certainly fell into the
disjunctive model outlined by Skowronek. Although Carter
repeatedly warned of impending economic crisis if the nation
failed to address the energy problem, he nonetheless was blamed
for the gas lines and high inflation caused by energy dislocations
in 1979 and 1980. Ironically, many of the same political leaders
who faulted Carter for moving too fast on energy in 1977 chided
him in 1979 for not moving fast enough. Compounding matters,
changes in energy policy threatened some of the more sacred
precepts of the Democratic party's ideological commitments. In
seeking to raise prices of oil and gas, either through increased
taxation or deregulation, Carter outraged the liberal wing of his
party, which charged that the president was unfairly burdening the
poor and middle class with higher energy costs. Impatient with
further delay in changing the price structure of oil, Carter's
decision to abolish price controls on oil in 1979 represented a
clear break from the Democratic legacy of regulation. In spite of
Carter's decontrol decision, Ronald Reagan nevertheless succeeded
in linking Carter to the failed regulatory policies of the
Democratic party. By the time of the election, the man who had
done more to reorient the nation's energy policy than any other
president in history was seen by many as the living embodiment of
past energy policy failures.
36^-406Wr°nekS °verview of the Carter

presidency, see pp.
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Carter's difficulty in obtaining new energy policy had
causes that extended beyond the disjunctive political environment
described by Skowronek, however. The rapacious growth of
congressional oversight committees in the early 1970s, coupled
with the decentralization of power in both houses of Congress and
the growing power of interest groups created numerous avenues for
obstruction on energy policy.
In the absence of either immediate tangible crisis or strong
congressional leadership, Carter's energy proposals floundered in
committee hearings. Comparing the deliberations over the NEP in
the House and Senate is particularly instructive in this regard.
In an extraordinary move, Speaker Tip O'Neill briefly reasserted
the powers of the leadership and created an Ad Hoc Committee on
Energy to protect the NEP from obstructionist tactics at the
committee level. Largely because of the more centralized structure
used by O'Neill, the bill emerged largely intact from the House in
less than three months of deliberations. In the Senate, however,
where no centralized organizational structures were utilized, the
bill was broken into six separate parts and essentially
emasculated by interest groups and their representatives. The
crucial issue of oil pricing failed even to clear committee
hearings for a floor vote. As a result, prices remained
artificially low on domestically produced oil, and the plan's most
important conservation measure (higher oil prices) was
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abandoned. This failure to reach consensus on oil pricing served
to make more severe the oil shock of 1979.
In addition to the problems posed by congressional
obstructionism, Carter also had to contend with the scarcity of
consensus on the form energy policy should take. While few doubted
the need to reduce the nation's dependence on imported oil,
agreement on the proper path to pursue proved elusive. In his
attempt to create a new energy policy, Carter found himself in a
whirlwind of competing forces that frustrated his policy goals.
Regional interests frequently superseded party and ideological
commitments as producer- state Democrats battled with consumer—
state Democrats over the issues of decontrol and higher energy
prices. Antigovernment Democrats and Republicans from the South
and West argued against the expansion of the energy bureaucracy
while the left wing of the Democratic party pushed for greater
government control over the energy industry. Labor and consumer
groups favored new taxes on the oil industry but resisted
conservation taxes on retail sales of gasoline and automobiles.
Environmentalists supported the president's solar energy
initiatives and conservation proposals but opposed his coal
conversion program and his continued support of nuclear power. The
oil industry welcomed Carter s decontrol decision, but it lobbied
against many of his energy tax plans. The issue of equity
frequently emerged during policy debates. Liberals believed that
the
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government should protect low income consumers from escalating
energy prices, while conservatives and producer-state Democrats
argued that many policy proposals unfairly penalized the energy
industry. As inflation began to rise in late 1978 and 1979, the
issue of eguity became more contentious, and liberal Democrats
argued that higher energy prices would further penalize low and
middle income groups. While few of these groups disagreed on the
need for a new energy policy, fewer still agreed on the form that
policy should take.
Since he first directed Schlesinger to develop the national
energy plan, Carter had feared that the scope of energy policy
would invite the aforementioned controversy among the scores of
affected interest groups. In order to overcome the power of
"organized interests," Carter had hoped to mobilize public support
behind his energy initiatives and pressure Congress to adopt the
plan as presented. Yet here, Carter faced the most difficult
obstacle in promulgating a new energy policy, in his attempt to
fashion an equitable policy, Carter sought to distribute the costs
of energy conservation on all segments of the population.
Producers and consumers, industry and labor, rural dwellers and
urbanites, all would bear a portion of the costs of the Carter
energy proposals. In exchange for these widely distributed costs,
the program would yield widely distributed benefits in the form of
future economic stability and a more secure energy supply.
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1
As Carter soon discovered, however, the task of convincing the
American public of the possible severity of energy dislocations
proved almost impossible. Nor could he convince them that the
costs of his programs would be offset by the future benefits. In
essence, Carter sought to mobilize public support for a program
that had no constituency. Future, not present, generations would
receive the most benefits from his energy policy.
Not until the U.S. experienced the economic dislocations
that Carter had predicted could he finally mobilize the public and
Congress to pursue significant change in energy policy. Carter's
greatest legislative triumphs on energy did not occur until late
1979 and early 1980, when gasoline shortages and the turmoil in
Iran and other Middle Eastern nations created a sense of panic and
fear that legitimized Carter's earlier "sky is falling"
pronouncements on energy policy. The price for delay, however, was
great. The 1979-80 energy dislocations contributed to
unprecedented levels of inflation and unemployment that crippled
the U.S. economy. Arguably, the delay also cost Carter his
political future. Since he had taken office, Carter had exerted
the energies and powers of his position to create a new national
energy policy. Ironically, when disagreement among legislators and
interest groups delayed that policy, Carter received the blame.
Although Carter's energy policies contributed substantially to
curbing domestic consumption and increasing production
239

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that led to the surplus of oil by the mid-1980s, only "future"
politicians received the political benefits of his policy.
Nevertheless, Carter's persistent and at times ill- fated quest
for energy policy has become an enduring symbol of both his
presidency and his personality.
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An Era of Limits Jimmy Carter and The Quest For A National Energy Policy

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An Era of Limits Jimmy Carter and The Quest For A National Energy Policy

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AN ERA OF LIMITS: JIMMY CARTER AND THE QUEST

FOR A NATIONAL ENERGY POLICY

John Costley Barrow, III

Submitted to the Faculty of the

Graduate School of Vanderbilt University

in partial fulfillment of the requirements

for the degree of

Since I first began this endeavor, no one has supported me

as whole-heartedly and with greater patience, love, and

understanding as has Clisby Hall Barrow. My partner in this

adventure since I first applied to graduate school, she has

provided me with both the inspiration and confidence to pursue

Her compassion, commitment, and spirit continue to captivate me

To my mother, Sandra, and father, Johnnie, I owe an awesome

debt that can never be repayed. They provided me with an idyllic

childhood and instilled in me a love of place and past.

Hugh Graham, Erwin Hargrove, Samuel McSeveney, Tom Schwartz,

and David Carlton served on my dissertation committee and provided

me with numerous insights and an astonishing depth of historical

knowledge. Their advice and comments proved invaluable.

Finally, I must extend special thanks to Hugh Graham. Since

he arrived at Vanderbilt, Professor Graham has encouraged me,

pushed me, and supported me in a fashion that should serve as the

ultimate model of what a mentor should be. Without his confidence

Reproduced with permission of the copyright owner. Further reproduction prohibited

ACKNOWLEDGEMENTS ........................................ iii

II. EXERCISES IN FRUSTRATION: U.S. ENERGY POLICY BEFORE

Pre-1970s Energy Policy ....................... 14

III. "THE MORAL EQUIVALENT OF WAR: "THE CREATION OF THE

V. THE BEGINNING OF THE END: THE IRANIAN CRISIS AND

VII. CARTER'S DEFEAT AND THE DISMANTLING OF HIS ENERGY

Reproduced with permission of the copyright owner. Further reproduction prohibited

"The Carter administration," writes Walter A.

Iranian hostage crisis. . .From start to finish, energy issues

crowded its agenda."1 From the time Carter first appeared on

television less than a month after his inauguration to announce

his intention to create a comprehensive national energy program,

energy issues dominated and eventually consumed his domestic

policy-making efforts. Carter considered the creation of a new

national energy policy "equal in importance to any other goal" of

his administration, although he later confessed that his efforts

In addition to dominating the president's policy-making

agenda, Carter's somewhat quixotic quest for a national energy

policy defined his presidency. On no other issue did Carter risk

so much of his political capital, and on no * 2

Walter A. Rosenbaum, Energy, Politics, and Public Policy,

Reproduced with permission of the copyright owner. Further reproduction prohibited

humiliating defeats. In energy policy one could see the strengths

of Carter's leadership—his willingness to tackle inherently

difficult national problems without regard to the political costs

and his conception of the presidency as leadership for the public

good. Conversely, energy policy also revealed the weaknesses of

the president's leadership—his difficulty in building political

coalitions and his failure to inspire confidence in his ability to

lead the nation. Despite Carter's unwavering commitment to

reorienting the nation's energy policy, energy issues haunted the

Carter administration in his last two years in office and greatly

contributed to his defeat at the polls in 1980.