ABSTRACT It appears likely that 1975 will be a critical year in which the long-term energy supply of the United States will be determined. In broad terms we are either going to take the steps necessary to reverse the slide into ever-greater dependency on foreign energy sources by accelerating domestic energy production; or, through inaction or wrong policy decisions, we will let that slide accelerate to the point where we lose effective control over our own security and economy.
It is up to industry to carry out this assignment but it cannot do so without clear-cut guidelines or rules under which it will operate. Government failure to face up to the nation?s energy problems and furnish this guidance in the form of a sound policy cannot be tolerated any longer.
I don?t think there is any serious question about how we got in our present predicament. In the period following the first commercial oil discovery in the United States, at Titusville, Pennsylvania, in 1859, this country developed a petroleum based economy that served as a model for the world. This was accomplished largely through the efforts of American business and the ingenuity of people like those in this audience. Know how, techniques and tools were developed to explore and produce oil and gas in nearly every type of environment known to man. Our country witnessed the greatest industrial expansion in history -- fed by crude and natural gas found and produced in an intensely competitive environment, with minimum government controls other than those designed to prevent waste.
We took the know-how, the tools, and the capital developed here and applied them on a global basis in an effort to provide energy to the rest of the world so that it too could share the good life. Our success made petroleum fuels for the ongoing industrial revolution the cheapest ingredient in the process, and the world economy became based on this competitively priced building block.
Along the way, however, governments of the world, including our own, began to deal themselves into the game. It is tempting to blame others for our problems, but first we had better examine our own house to see if it is in order. I suggest that our government has intervened in the energy business without any idea where its practices were leading.
Steadily increasing jurisdiction and control over energy matters was parceled out among dozens of federal agencies, commissions, departments and other regulatory groups, all with special -- and frequently contradictory -- missions, and none of which could see the problems in their entirety.
Official warnings of trouble ahead were sounded as long ago as 1952, when a blue-ribbon presidential commission reported to President Truman that soaring energy demands, shrinking energy resources and rising real costs threatened eventual shortages and declining living standards unless something was done. The report also noted that the Federal Government was badly-equipped to carry out its responsibilities for dealing single-mindedly with the many aspects of the challenge.