The Age of Global Warming: A History (13 page)

9

Breaking Wave

It is almost impossible for historians to understand how in advance of some of history’s great revolutions, it was often not even realised that a change was about to take place.

Henry Kissinger
[1]

We have learned that more is not necessarily better, that even our great Nation has its recognized limits, and that we can neither answer all questions nor solve all problems.

Jimmy Carter, 20
th
January 1977
[2]

At 2pm on 6th October 1973, over two hundred Egyptian aircraft flew over the Suez Canal and two thousand artillery guns started a series of barrages. Twenty minutes later, the first Egyptian troops crossed the canal. Using high-pressure water pumps, they blasted passages through the Bar Lev line, a fortification running the length of the canal made of sand and concrete. Sixteen hours later, ninety thousand troops, eight hundred and fifty tanks and eleven thousand additional vehicles were on the east side of the canal.
[3]
At the same time, the Syrians attacked Israel from the north.  

A survey of polls in the US, Great Britain, and Germany suggest that 1972 marked the high point of concern about the environment.
[4]
The circulation of the
Ecologist
more than halved between 1973 and 1976.
[5]
  Although membership of the largest environmental pressure groups continued to rise, only half a dozen of the environmental magazines started on or after Earth Day 1970 survived. Though in retreat, environmentalism broadened its reach. During this period, America’s national security establishment became a functional ally of environmentalism as concerns about energy security coincided with environmentalists’ campaign against fossil fuels. 

The cause was the same event that led to the sudden disappearance of environmentalism from the world stage. Of all the wars of the twentieth century in which the major powers were not combatants, none had such an effect as the Yom Kippur war. To Henry Kissinger, it brought the curtain down on the post-war period.

The seemingly inexorable rise in prosperity was abruptly reversed. Simultaneously, inflation ran like a forest fire through the industrialised countries and recession left millions unemployed. … Transcending even the economic revolution was the emergence of oil as a weapon of political blackmail. The industrial democracies saw imposed on them not only an economic upheaval but fundamental changes in their social cohesion and political life.
[6]

Environmentalists seized on this as vindication of their arguments. The party is over, Barbara Ward declared. Fritz Schumacher poured scorn on those who expected ‘to get back onto the happy road of economic growth’.
[7]

The present situation, I am certain, has nothing in common with any previous ‘depression’ or ‘recession’ … It is not part of a cycle, is not a ‘correction’ or ‘shake-out’ or anything of this sort: It is the end of an era.
[8]

Those who couldn’t see this, Schumacher said, were indulging in the psychological exercise of ‘the refusal of consciousness’.
[9]

One political leader decided to overcome the refusal of consciousness. 

Barely mentioned in the 1976 presidential election, Jimmy Carter made the energy crisis the centrepiece of his presidency. In a June 1979 interview, it was put to Carter that a poll showed that sixty-five per cent of Americans did not believe there was a gasoline shortage. ‘Is there a shortage?’ the president was asked. ‘Yes,’ Carter replied.
[10]

The facts suggested otherwise. In 1973 world oil production was 58.3 million barrels of oil a day. Output rose steadily to 65.7 million barrels a day in 1979. The energy crisis was created by governments, not geology. Shortages in the US were the result of government regulation rather than world supply. America’s European allies were also enveloped in a refusal of consciousness. On the first day of the 1979 Tokyo G7 summit, Carter endured a bitter and unpleasant lunch when he was personally abused by German leader Helmut Schmidt. ‘One of the worst days of my diplomatic life,’ as Carter later called it.
[11]
 

The world was not running out of oil. The major oil producers had formed a cartel and were exploiting their pricing power. But the circumstances of its sudden emergence enormously amplified its impact. The success of the initial Arab attacks was the single most traumatic event in Israel’s history. Four days into the war, Israel decided to push deep into Syrian territory towards Damascus. To relieve the Syrians, the Egyptians launched further attacks, enabling the Israel Defence Forces to counter-attack. The Israelis crossed the canal and began to advance towards Cairo and cut off the Egyptian Third Army. Within a matter of days, Israel, Egypt and Syria had felt their existence at risk. 

From mid October 1973, the US began a twenty-three-day airlift. It was meant to have been under the cover of darkness. When one of the first aircraft arrived in broad daylight, James Schlesinger, US defense secretary, said ‘much of the population of Tel Aviv went out to the perimeter of the airport to cheer’.
[12]
The airlift ricocheted around the Arab world. Two days later, Arab oil producers announced they were increasing the oil price from $3.01 to $5.01 a barrel, described by Kissinger as stunning and unprecedented.
[13]
On 20
th
October, Saudi Arabia announced it was halting oil exports to the US. The next day Kuwait, Bahrain, Qatar and Dubai followed suit. The oil weapon had been unsheathed, triggering a wave of panic buying.

Throughout 1973, the Saudis had threatened to use oil as an economic weapon. In a TV interview in the late summer, King Faisal warned

America’s complete support of Zionism against the Arabs makes it extremely difficult for us to continue to supply the United States’ petroleum needs and to even maintain our friendly relations.
[14]

The threat had been discounted in Washington because of the failure of an attempted embargo in 1967.
[15]
Such had been the Nixon administration’s complacency that when, in 1969, the Shah of Iran offered to sell Washington one million barrels of oil a day for ten years for a strategic reserve, it was rejected out of hand.
[16]

By November 1973, President Nixon was telling Americans they faced the most severe energy shortage since the Second World War. They would have to use less heat, less electricity, less gasoline. ‘The fuel crisis need not mean genuine suffering for any American, but it will require some sacrifice by all Americans.’
[17]
There would be a ten per cent reduction in flights and a fifteen per cent cut in supplies of domestic heating oil (‘we must ask everyone to lower the thermostat in your home by at least six degrees’) and requested highway speed limits be cut to fifty mph.

Invoking the Manhattan project and the Apollo space programme, Nixon announced Project Independence: by 1980, America would meet all its energy needs without any imports. It marked a one-hundred-and-eighty-degree turn from the lowest cost, free trade principles of the 1952 Paley Commission and set a course which Jimmy Carter, George W. Bush and Barack Obama followed. It was also a complete flop. In 1973, the US imported 6.3 million barrels of oil a day. By 1980, this had risen to 6.9 million and, in 2007, the last year before the onset of recession, America imported 13.5 million barrels of oil a day, more than double the 1973 level.
[18]

A December meeting of Persian Gulf producers in Tehran decided to increase the oil price from $5.12 to $11.65 a barrel. ‘One of the pivotal events in the history of this century,’ according to Kissinger.
[19]
The oil price increase from the beginning of the Yom Kippur War was unprecedented. Expressed in March 2009 dollars, it rose by $41.14 in four months and peaked $2.40 higher in June 1975, before trending down to a low of $46.33 in November 1978. Unprecedented but not unsurpassed. The oil price increase from January 2007 of $72.24 (in March 2009 dollars) to $123.73 in July 2008 was two thirds bigger than the 1973 oil price shock.
[20]
By then, the world had learned to live with high and volatile oil prices without turning it into a crisis.

In February 1974 Western foreign ministers met in Washington to take forward Kissinger’s proposal for an oil buyers’ group. France was strongly opposed. ‘I won’t be able to accept, no matter what conditions are established, a situation which requires us to forego Arab oil, for even a year,’ President Pompidou told Kissinger.
[21]
Major oil importing countries such as West Germany and Japan decided to let their economies adjust to higher oil prices. German motorists were not going to wait in long lines to fill up their cars. ‘We’re going to recognise that if we want oil, we’re going to pay the world price,’ West Germany’s economics minister said.
[22]
The US went down the route of much greater regulation. The 1973 Emergency Petroleum Allocation Act authorised a raft of petroleum price, production, allocation and marketing controls, turning the oil price shock into an energy supply crisis.

The rift between Europeans and American policy became a defining feature of the Carter presidency. Carter was a true believer; he’d read
The Limits to Growth
. It had, he said, melded together scientific data ‘to show a dismal prospect, even for the survival of mankind, if we fail to change some of those trends quickly’. Its language became a major theme of his inaugural address and his presidency.
[23]

Politically Carter’s problem was that he saw limits where his fellow countrymen did not. Convincing Americans about the energy crisis was like pulling teeth, Carter complained.
[24]
By 1979, according to a briefing by his pollster Pat Caddell, Americans did not believe his warnings about future energy shortages. They were convinced that both the government and oil companies were either incompetent, dishonest or both.
[25]
  

‘Tonight I want to have an unpleasant talk with you,’ Carter told Americans three months into his presidency.
[26]
The energy crisis was the ‘moral equivalent of war.’ The alternative might be ‘national catastrophe’, Carter claimed. The lines at gas pumps had gone, but the energy problem was now worse; ‘more waste has occurred, and more time has passed by without our planning for the future’. The immorality of waste was Carter’s overarching theme. ‘Our energy problems have the same cause as our environmental problems – wasteful use of resources.’
[27]

The next day, Carter presented his energy plan to Congress. He wasn’t expecting any applause and didn’t get any. It was ‘torn to pieces in Congress in much the same way puppies might rip the stuffing out of a rag doll’, critics noted.
[28]
A month after declaring war on oil and natural gas usage, Carter sent Congress a message on the environment: ‘The transition to renewable energy sources, particularly solar energy, must be made.’
[29]
He had solar panels installed on the roof of the White House (they got taken down for maintenance in 1986 and were never put back), backed gasohol (a mixture of ten per cent ethanol and ninety per cent petroleum), called for the creation of an energy security corporation financed by $5 billion of energy bonds, and a solar bank. Twenty per cent of America’s energy should come from solar power by 2000, a target Carter said was crucial.
[30]
The target might as well never have existed. By 2007, renewable energy contributed less than seven per cent of America’s needs while the contribution from solar energy was little more than a drop in the ocean – less than one tenth of one percent.
[31]

The Nixon-era price controls inherited by Carter had a two-tier system so that the price of oil from developed reserves was capped at a lower price than oil from new fields. Selling gasoline at two different prices created local shortages and long lines at filling stations. During the 1976 primary campaign, Carter had pledged to remove price controls on natural gas prices, helping him win the crucial Texas primary. But he reversed himself once he got to the White House in what his domestic policy adviser Stu Eizenstat thought possibly the most fateful domestic decision of his presidency.
[32]

Deregulating energy prices wouldn’t work, Carter claimed, because OPEC dominated the global energy market. Instead Carter got former defense secretary James Schlesinger, who had been a Rand Corporation systems analyst in the 1960s, to design a national energy plan. Its aim was to put the market to work to conserve oil and gas. ‘Why not then, use the real market?’ asked the plan’s conservative critics. ‘Even a systems analyst, however brilliant, would find it impossible to simulate the complexities of a fairly simple market system, let alone one as huge as the energy market,’ they argued.
[33]
  

Carter’s energy policy was based on the (false) premise that energy supplies were soon going to be exhausted. 1973 world oil production was 58.5 million barrels of oil a day and rose to sixty-six million barrels a day in 1979.
[34]
Neither was it the case that America’s reserves of energy were running low. In April 1977, shortly before Carter launched his energy plan, the Energy Research and Development Agency concluded that America’s natural gas reserves could be expected to exceed its total energy needs well into the twenty-first century. The director of the US Geological Survey, Dr Vincent McKelvey, said that following a slew of recent discoveries America’s natural gas reserves were about ten times the energy value of all previously discovered oil and gas reserves in the US combined. He left his post shortly after.
[35]

The more Carter talked about energy, the lower his poll rating sank. In 1977, he made three television addresses on the subject as well as one to Congress and countless appearances at public forums talking about the energy crisis. It left everyone confused, including Carter himself. In June 1979, Carter told an interviewer: ‘I don’t claim that the government has done a good job with the energy problem; it hasn’t.’
[36]
When asked by Dan Rather in August 1980 to grade his performance, Carter gave himself a straight ‘A’ on energy. ‘Very good, I think we’ve done better than we had anticipated, and that’s one of the great achievements of our administration.’
[37]

1979 was a particularly tough year for Carter’s energy policy. In April he announced another energy package, including a windfall tax (preventing energy suppliers ‘profiteering’ from changes in energy prices was a constant theme). The public was cool and the attitude of Congress ‘disgusting’, Carter wrote in his diary.
[38]
At the end of June came his mauling by Helmut Schmidt in Tokyo. To save face, the Europeans agreed to a formula that would meet Carter’s objective of cutting oil imports by counting oil from the British North Sea as pooled with the other European members of the G7.