THE WHITE HOUSE
July 3, 1979
MEMORANDUM FOR THE PRESIDENT
FROM: Jerry Rafshoon
Attached is draft 4 of the Thursday night speech. Instead of giving you an outline today, we were able to get a speech draft overnight and Stu and Jerry have gone over it word-by-word, edited it down: Jody has cleared it and we have cleared numbers with Charlie Shultze and Department of Energy. There are several decisions implicit in the speech. Stu is sending you the decision memorandum.
The tone of this speech is stark -- it is not accusatory -- but it describes the problem in general terms, gives a little history, and tells in general some of our short term and long term solutions. It sets the stage for forthcoming specifics.
We have purposely used the war analogy repeatedly. We feel that the crisis with OPEC is an effective hook for this.
The closing Paragraphs are hard -- they speak to the crisis of spirit that we have discussed with Caddell et al. We cannot be more upbeat or we will lose touch with reality.
We will stand by on the 4th and 5th for your reaction. We need to put this on teleprompter Thursday afternoon. I hope you can practice a couple of times in the Oval Office.
For once we are not giving out an advance text - the media will see this at the same tame as the rest of the people.
cc: The Vice President
(Stu wants this insert. Jerry thinks it is too optimistic.)
In fighting this energy battle we have all the tools for victory. We have enormous resources of coal and enough oil shale to match several Saudi Arabias. We have the best trained work force and the highest level of technology in the world. And we have always had the national will to meet the challenges at hand.
Undelivered Energy Speech
originally scheduled for delivery on July 5, 1979
The long-predicted energy crisis has come. It is no longer something that experts say will happen sometime in the future. It is here. It is now.
Today, tens of thousands of Americans waited in gasoline lines -- as millions have done over the last several weeks. Many of you had to cancel holiday plans on Independence Day. Farmers and truckers have experienced shortages of diesel fuel. It is hard to get gasoline at any price -- and the price is rising fast.
People are asking: How did this happen to us -- and why? Will it be a permanent fixture of our lives? And what are we going to do about it?
Tonight I want to answer those questions. I want to speak to you honestly about the unpleasant realities of our short-term situation. And I want to point the way to a future of energy security.
The underlying cause of the crisis is the same as it has been for many years. That cause is our massive, deeply dangerous dependence on the OPEC oil cartel.
This cartel controls both the supply and the price of oil. It is increasingly willing to manipulate both, bleeding the industrial world of its wealth. Some of the OPEC countries are unstable or unreliable. The danger of interruptions in supply is a profound threat to our economic well-being and our national security.
A generation ago we sent more oil out of the country than we brought in. By 1973, just before the first oil embargo, we were still importing only one-third of our oil, and paying only $2 a barrel for it. Now we import nearly half of what we use. And after last week's shocking OPEC price increase, we will be paying up to $23.50 a barrel -- compared to $12.50 only six or seven months ago.
The current gasoline lines are directly related to this vulnerability.
Seven months ago, the revolution in Iran cut off its oil production entirely. As a result, the United States lost a hundred million barrels of oil. We can never get that oil back, from which we draw gasoline and home heating oil. Iranian production has now been resumed, but at a much lower level. The result is a continuing shortage.
Before Iran, the world produced as much oil as it demanded Now, the world produces more than one and one-half million barrels less per day than it requires. This leaves our country with about 750,000 barrels per day less than we need. While OPEC production has dropped since the Iranian revolution, we have also had a steady decline for ten years in our domestic production.
The shortage is global. It is real. And because there is a shortage, there are gasoline lines.
The lines are an irritation and an inconvenience for millions of Americans. They are a threat to the livelihood of many of us. But the stakes are far higher than that.
Yesterday, we celebrated the anniversary of our independence as a nation. For 203 years, we have stood proud and free. We have met challenge after challenge -- and we have overcome them all.
Now our very independence is in danger. The threat is not military but economic -- but it is no less real, no less serious, no less grave.
Two years ago, I called the energy crisis the moral equivalent of war. Few were willing to heed the call. Now we are in that war, America must be ready to listen. We are now in a decisive fight for the independence and security of our nation. The battlefield is energy.
We must mobilize not only our resources but our spirits as well. We cannot afford business as usual. Beginning tonight, we must approach this crisis in a new way. We must recognize that only by pulling together, in a spirit of patriotism and of total common purpose will we be able to pull ourselves out of it.
I wish I could tell you tonight that the shortages will disappear soon. I wish I could tell you that the gasoline lines will vanish overnight. I wish I could tell you that our economy could sustain without damage the loss of tens of billions of dollars that will be drained away by the latest OPEC price increase.
I cannot tell you these things. I must tell you the truth.
The lines will not disappear quickly -- perhaps not fully until the end of the summer. When they disappear in one area, they may reappear somewhere else – because there is simply not enough gasoline to satisfy every demand.
My most important duty as President is to protect the health and safety of our citizens. That means I must first ensure that we have enough home heating oil for the winter and enough fuel to produce and deliver the food we eat. It means that I must ensure that police, fire, emergency, and defense needs are met. These simply have to be our first priorities.
We are urging refineries to increase their production of fuel and heating oil, and to distribute it as fairly as possible. The mechanisms by which we try to control the distribution of gasoline are clumsy and imperfect. They have a long response time.
Our allocations are based largely on past patterns of consumption; but the shortage itself changes those patterns. We have been working to improve our allocation system, and we will accelerate that effort. The best way to handle the immediate problem is for each citizen to conserve. The shortages will be with us for some time to come. We will not need to give up our way of life -but we will have to alter it. We will have to drive less. We will have to make sure that each trip we take is a necessary one, just as we did during Wrold [sic] War II. We will have to make greater use of public transportation and carpooling. When we reduce demand, the payoff is immediate.
(The people of California have demonstrated that when we voluntarily restrain our consumption, we can end the gas lines.)*
I again urge Congress to give me authority for standby gasoline rationing.
The need is now painfully obvious. It is absolutely crucial for us to arm ourselves against the possibility of further interruptions by OPEC in our energy supplies.
Also, I urge the Congress to act expeditiously to permit me to set mandatory state-by-state conservation goals, and enable the federal government to step in with mandatory conservation plans if a state fails to meet its target. I am also asking the governors to use the authority I have given them to impose minimum purchase requirements and odd/even and staggered hour plans at the earliest signs of spot shortages.
But let me repeat: spot shortages will continue to occur throughout the summer. And when the lines do disappear, the inconveniences will not.
Most likely, they will take some other, perhaps unexpected, form.
Many Americans ask whether some are trying to profit illegally from the crisis.
The answer is yes -- and it will always be yes as long as we reamin [sic] so desperately vulnerable. The ripoff artists, large and small, did not cause this crisis. But they cannot be permitted to take advantage of it -- and they will be brought to justice.
To produce more home heating oil and gasoline in the short-run, I am asking our independent energy regulatory agency and the states to remove all barriers to using natural gas to replace oil. If this request does not produce maximum results, I will seek mandatory authority to require such switching. I am instructing the Environmental Protection Agency to allow, where appropriate, the use of higher sulfur oil to free additional fuel oil supplies.
In addition, the increased production of natural gas and oil which decontrol will bring and the increased production of coal we will encourage will help make up our shortfall in the next year.
As for the economic impact of the almost sixty percent OPEC price rise since December, I will be equally blunt. The impact will be harsh. It will increase both inflation and unemployment. It will add l percent to our already severe inflation. By the end of 1980, it will add 800,000 people to our unemployment rolls. It will reduce economic growth substantially. Our economy has been wounded by OPEC and the wound will show in the months ahead. We cannot avoid these economic consequences. But we must act to make sure they are held to a minimum. I am setting up a series of consultations with the Congress, with labor, and with business over the next several weeks to work out our economic response to the OPEC price increase.
Nevertheless, our economy will remain the strongest in the world. It is now our solemn duty to mobilize that strength for ultimate victory in the energy war.
I went to the Tokyo Summit during this crisis because we need the cooperation of our closest allies to win this energy war. I got that cooperation when the world's major industrial nations pledged to reduce oil imports by specified amounts and to join in an international effort to develop alternatives to OPEC oil. That agreement means that there will be virtually no increase in demand for OPEC oil from now until 1985.
Now we must follow up with the speed and fervor of a nation at war -- not for the sake of other countries, but for our own.
Since my return, I have been working continuously to build on the proposals I made two and one-half years ago for our country to break its bondage to the whims of OPEC and to secure our economic and energy security. That work continues and will continue with the Congress when it returns next week.
But the general outline of a strategy for winning the energy war has now emerged -- and I feel it is important for me to brief you without delay on the steps we must now take.
First, I have ordered the preparation and submission to Congress of a bill creating a federally chartered private corporation to develop alternative energy sources to imported oil, such as synthetic liquid fuels. This corporation can be just as successful as the corporation the United States established in World War II to produce synthetic rubber. It will be funded at a multi-billion dollar level. It will accelerate our ability to turn our plentiful domestic resources -- such as coal, crops and organic products -- into gasoline and alcohol.
Second, we will accelerate the development and use of coal, unconventional oil and gas resources such as geopressurized methane, Eastern shales, tar sands, and heavy crude oils.
We have already tripled our investment in solar energy and I have set a goal of using solar energy for twenty percent of our energy within the next twenty years.
Third, I have ordered the development of a massive new conservation program to increase, on a greatly accelerated basis, the energy efficiency of our homes and buildings.
Fourth, I will seek the rapid creation of an Energy Mobilization Board, modeled on the War Production Board of World War II, to cut through the red tape and delays that are holding up crucial energy projects such as pipelines and refineries.
The details of these crucial projects will be hammered our [sic] in close consultation with the Congress. They will be submitted during the course of the next month. Congress has so far failed to deal with the oil imports problem. This inaction must now end.
Because these programs are central to long-term success in the battle for energy security, they must be put in place without delay.
These steps will be expensive. But unlike the billions we pay to OPEC, the costs of regaining our energy security will be paid by Americans to Americans. We will be creating jobs, not exporting our dollars overseas. We will be counteracting recession -- not fueling it. We will be attacking one of the root causes of our inflation -- not increasing it. It will be money well spent.
These new production programs depend upon the passage of a strong windfall profits tax. The House has acted. The Senate must now give us the revenues from a permanent windfall tax to capture the billions of dollars decontrol will bring to the oil industry and to enable us to fully wage our energy war.
Energy is an extraordinarily serious problem -- as serious as war itself and deserving of the same sustained national effort.
But our most serious problem is not a material one but a spiritual and psychological one. An atmosphere of fear, futility and foreboding has clouded our response to the energy crisis at hand.
Most citizens are facing the difficulties responsibly. But then we read of (people) being shoved and punched in (a) gasoline line.** We see reports of riots and shootings in strikes over diesel fuel. We see a political system seemingly paralyzed by petty squabbling, so preoccupied with protecting special interests that the overall interest of the United States goes unserved. And we ask ourselves: Is this the shape of our future? Is this the kind of country we have become? Is this what it is going to be like from now on? The answer is NO.
There are many things we cannot control. We cannot dictate the price of foreign oil. We cannot make gasoline appear by magic when there is a world shortage of the oil from which it is made. But we can control the spiritual and moral destiny of our beloved nation -- and only if we do that can we control our material destiny as well.
The energy crisis has imposed suffering on our nation, and it will impose more before we have vanquished it. But if we can meet this crisis with determination, patriotism and common purpose -- as we have met so many crises in the two centuries of our history -- we can come out of it a stronger, prouder people than before. We will rally to each other and to the banner of our nation. We will tackle the long hard task ahead with the courage, the will, the vitality that are characteristic of the American people.
During this time of crisis, I have a responsibility to you that goes beyond the making of policy decisions and the submission of endless proposals to the Congress.
I have a responsibility to speak to you on a regular basis -- more frequently than I have in the past -- to explain where we stand and what we can expect in the future.
If I can have the cooperation of the radio and television networks, I will be speaking to you more frequently over the course of the summer -- not about false hopes or the painless solutions, but about the hard facts of our problems, and of how, if we work together as one nation, we will prevail.
Before this month is over, I will be talking to you again about the specific steps that we as a country must take to ensure our independence.
Franklin Roosevelt once said: ''Lives of nations are determined, not by the count of years, but by the lifetime of the human spirit. The life of a man is three-score years and ten, a little more, a little less. But the life of a nation is the fullness of its will to live."
As a people, as a nation, let us meet the challenge of the energy crisis with the fullness of our will to live.
# # #
*text in parentheses optional in view of a disagreement between Stu Eizenstat, who wanted it in as expressed, and Jerry Rafshoon who did not
** alternative = "we read of a pregnant woman...."
Research Note: This document transcribed via photocopy of original, typed document obtained courtesy of The Carter Library Museum, Atlanta, GA in March of 2004. Digitized and transcribed by Stephen Kiepke, Some 300 photocopied and digitized public domain documents pertaining to President Carter's delivered and undelivered energy speeches are available by request to AmericanRhetoric.com courtesy of the Jimmy Carter Library & Museum.
Also in this database: Jimmy Carter: A Crisis of Confidence
Copyright Status: All items on this page = Property of AmericanRhetoric.com.