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    Repiglican Roast

    A spirited discussion of public policy and current issues

    Location: The mouth of being

    I'm furious about my squandered nation.

    Sunday, February 17, 2008

    How The Reagan Administration and Other Right Wing Extremists Destroyed America

    Bush's energy problems stem largely from growing worldwide demand for limited supplies of oil and natural gas. The situation has grown worse because of the war in Iraq and, recently, hurricanes Katrina and Rita, which knocked out rigs in the Gulf Coast and hampered refineries.

    Carter faced a crisis from a combination of economic problems, failed policies of his predecessors and, finally, an Iranian revolution that cut access to some Middle Eastern oil.

    Carter met the problems by starting sweeping oil-reduction reforms, including creation of the Cabinet-level Department of Energy.

    He began spending millions of dollars researching alternative sources for electrical power, including solar power. He got utilities to cut their use of oil for electricity and ramp up their use of natural gas or coal.

    "Up until Carter, we were getting about 20 percent of our electricity from oil generation," said Jay Hakes, director of the Energy Information Administration under Carter and an authority on modern presidents and oil. "And post-Carter, it went down to about 3 percent."

    Carter insisted that U.S. automakers build more fuel-efficient cars, with a goal of 27.5 miles per gallon over the following decade - a requirement passed under Gerald Ford but put into force by Carter.

    He offered incentives for getting oil from shale, creating a boom initially in the Rockies - and a bust when it failed to be cost-effective. He offered deductions for using solar water heaters in homes and commercial buildings.

    "People in the upper-income bracket were always looking for tax cuts. They were going to build a house anyhow, so they were saying, 'Well let's look at this solar stuff and see what we can do,' " said Marc Giaccardo, a professor at the University of Texas at San Antonio who at the time was an Albuquerque architect.

    Carter even had solar collec tors installed on the White House grounds to heat the executive residence's water.

    Then Carter lost re-election to Ronald Reagan in 1980. The so lar panels at the White House eventually came down - and Reagan and his aides gutted the solar research program.

    "In June or July of 1981, on the bleakest day of my professional life, they descended on the Solar Energy Research Institute, fired about half of our staff and all of our contractors, including two people who went on to win Nobel prizes in other fields, and reduced our $130 million budget by $100 million," recalls Denis Hayes, the founder of Earth Day, who had been hired by Carter to spearhead the solar initiative.

    Reagan and Congress stopped aggressively pushing new auto efficiency standards, acceding to Detroit's desire to leave them at Carter-era levels. They let the solar tax benefit expire, and the nascent solar industry went belly- up.

    It was time to let the markets work their magic and stop all this government tinkering, Reagan and conservatives said.
    Meantime, the solar energy industry is hopeful - not because of anything that occurred in the White House after Carter, but because the 2005 energy bill, signed by Bush, will give up to $2,000 in tax credits for anyone installing solar energy in a home. The credits begin next January, although they will be available for only two years unless Congress extends them.

    Solar-energy champions say such a boost was needed 20 years ago, as the Carter tax credits were expiring. "The solar water heating industry instantly went from a billion-dollar industry to an industry that now installs, in the U.S., about 6,000 solar hot water heaters a year," said Noah Kaye, spokesman for the Solar Energy Industries Association.

    Had Reagan not squashed it, the research that Carter started could have triggered a substantial shift to solar, wind power and other renewable forms of energy - possibly providing as much as 25 percent of the nation's electricity supply, says Hayes, the Carter solar expert.

    "We were all aware of what in theory could happen by the year 2000, and it occasionally comes back and haunts us," Hayes said.

    That is all hypothetical, of course, because the theories never got a chance to run their course.

    Yet solid data exist on what happened after the free market- loving Reagan chopped Carter's programs to shreds.

    Oil prices dropped and stayed relatively stabile for two decades. Motorists were thrilled.

    Oil prices plunged in the early ’80s after the Iranian crisis ended; after a worldwide recession sapped productivity (a less productive economy uses less fuel); and — especially — after Reagan eliminated price controls. The controls, limiting how high the cost of fossil fuel could go, had been in place since Richard Nixon used them in an effort to rein in inflation and dampen consumer prices during the Arab oil embargo. Carter started to eliminate them but never finished.

    While the controls kept a lid on prices, they also prevented oil companies from earning enough to make them want to reinvest in more exploration and production. “When there’s a shortage of supply and you put in price controls, it makes the matter worse because it decreases incentives to produce more,” Hakes said. “And it decreases the incentives for drivers to cut back.”

    Reagan couldn’t wait to fix that problem. “He signed the order the day he came in,” said Bob Slaughter, president of the National Petrochemical and Refiners Association.

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