The Energy Crisis: Time for Action

The first signs of the impending disaster came slowly: increases in the cost of oil and gasoline, reductions in voltage delivered by power companies during peak hours, and occasional dim-outs. But then the pace accelerated as the Government began rationing essential fuels and exhorted the public to forsake private cars. The reduced use of automobiles had immediate repercussions in Detroit, where the auto industry began laying off workers by the thousands. Other industries, notably the steel manufacturers, also were severely hit. A "domino effect" of factory shutdowns swept through the U.S. economy.

Eventually shortages of fuel and breakdowns of the transportation system produced growing food shortages as farmers were unable to ship their products to the country's great urban centers. The stock market plummeted. Industrial growth came to a standstill. The Government, attempting to stave off a collapse of the national economy, imposed rigid guidelines for prices, wages and profits. Critics of these policies were severely penalized under new antisedition laws that virtually nullified the First Amendment. The U.S., in effect, became a totalitarian state.

THIS chilling scenario is not from a leftist science-fiction film but out of the pages of a serious recent book, The Energy Crisis (Crown; $5.95), by Lawrence Rocks and Richard P. Runyon, both professors at Long Island's C.W. Post College. Unless the U.S. takes serious measures to find new sources of energy, the authors warn, such massive turmoil could occur in the U.S. by the 1980s. While the apocalyptic view of Rocks and Runyon is exaggerated, talk about an energy crisis is more than hyperbole.

Most Americans cannot yet get excited about that problem, but many of them have already seen the effects of the growing energy shortage. During the past three summers, there have been scattered brownouts across the nation. These cutbacks on voltage, designed to preserve overloaded generators, caused TV pictures to shrink, lights to dim and air conditioners to slow down. Electric utilities in major cities, which until a few years ago urged their customers to use more electricity, now have changed their line. The new theme, typified by New York City's Consolidated Edison Co., is "Save a watt" by turning off lights and appliances when they are not absolutely necessary.

Last winter, for the first time in memory, fuel-oil supplies ran ominously low. From Denver to Des Moines, schools were closed for lack of heat, and production in fuel-short factories came to a halt. This spring has already seen scattered instances of gasoline shortages and service-station shutdowns, and there is growing concern that further shortages may lead to gas rationing before the summer is out.

Paradoxically, the U.S. still has ample domestic sources of energy. Experts estimate that reserves include enough recoverable deposits of oil (which accounts for 45% of today's energy consumption) and of natural gas (32%) to last about another two decades. Beyond that time, foreign supplies of those fuels should be sufficient to meet all the world's needs until at least 2030. In addition, the U.S. has immense reserves of coal (which now accounts for only 18% of U.S. energy consumption) --enough, theoretically, to fill domestic needs for centuries.

Thus the immediate problem is caused not by dwindling reserves but by inadequate oil-refining capacity and man-made shortages of natural gas. These, in turn, are caused by complex and interrelated political, economic and social factors. By holding down the price of natural gas, the Federal Government has artificially increased demand for the fuel while providing no incentives for exploration for new reserves. Similarly, legislation that favors oil companies by sheltering domestic producers and permitting tax write-offs of exploration abroad has not worked to increase domestic supplies or to en courage the building of new refineries in the U.S.

The urge for a clean environment has complicated matters even further. Clean-air laws, for instance, forbid the burning of oil and coal with high sulfur content. As a result, much available domestic fuel cannot be used in many localities. Insisting on environmental safeguards, groups have delayed such projects as the Alaska pipeline and nuclear power plants, further limiting the development of domestic energy sources.

Increasing opposition by conservationists and state government officials to heedless strip-mining and offshore oil drilling has also sharply limited the future exploitation of U.S. fuel reserves. Sums up S. David Freeman, director of a Ford Foundation study of energy: "Environmental goals and energy demands are on a collision course."

At the same time, the U.S. until now has been understandably reluctant to relieve the domestic shortages by turning to easily available overseas sources of energy. Reason: the Government wanted to protect the high-cost domestic oil industry, arguing that the nation should not become dependent on foreign suppliers of oil and gas, especially when the major reserves are in nations not particularly friendly to the U.S. -- the Arab states and Russia. Further more, the U.S. balance of payments problem would only be worsened by importing foreign oil and gas.

At a three-day energy conference sponsored by Time Inc. in April at Lyford Cay in Nassau (for list of participants see box page 48), top executives of U.S. energy companies offered suggestions for alleviating the shortages. Their strategy through 1985 would be to increase the domestic output of oil and natural gas, and to build new energy facilities (power plants, refineries, pipelines). But the bill for this expansion, according to experts at the conference, would be at least $500 billion, too high for industry to pay without fed eral help. The energy companies want the Government to allow the market place to set prices, to ease cumbersome environmental restrictions, and to open federal lands and offshore areas to exploration for oil and gas.

Thomas Kimball, head of the National Wildlife Federation, took a different tack. "What we need," he told the conference, "is a national energy policy--not a national energy sales policy." Most environmentalists and consumerists want assurances that those shortages will not cause the Federal Government either to reverse existing environment laws or to allow big hikes in the price of energy. If the price of interstate gas were allowed to climb by 30%, they say, the value of natural-gas reserves would climb by $300 billion.

This would stimulate more drilling, but it would also result in what critics call "windfall profits" for industry.

Indeed, because all the energy companies would pass along higher costs to the consumer, critics have charged that the energy crisis could conceivably serve, in Freeman's words, "as a massive exercise in picking the pocket of the American consumer to the tune of billions of dollars a year." No one is suggesting a conspiracy to raise prices; the literally hundreds of electric utilities, gas, coal and oil companies that all seek competitive advantage over one another could not effectively coordinate such a campaign. But the critics fear that consumers might be faced with excessive price boosts unless the Government intervenes.

In his special energy message to Congress last month, President Nixon tried to steer a middle course while easing the shortages. He acted to increase supplies of foreign oil by abolishing the rigid import quota system and replacing it with a flexible system of tariffs on imported oil. To spur domestic output, Nixon ordered the Interior Department to triple by 1979 the amount of federal acreage leased to oil and gas companies. Moreover, the President asked Congress to drop price controls on new finds of natural gas, to extend investment tax credits on both dry and producing wells and to streamline time-consuming administrative procedures designed to protect the environment.

Although Nixon pledged to safeguard the environment in all these measures, his lack of emphasis on cutting demand for energy provoked a storm of criticism. So did his apparent unwillingness to fund accelerated federal research programs to develop new energy sources for the future. But Nixon left no doubt about another point: "We must face up to the possibility of occasional energy shortages and some increase in energy prices."

An End to Cheap Energy

At present, despite the fact that the U.S., with only 6% of the world's population, consumes almost one-third of its total energy output, only about 4% of the gross national product is required to pay the bill. Nixon has proposed that energy prices "reflect their true cost" --which increasingly includes ransom-sized tax increases by the oil barons of the Middle East, environmental cleanup expenditures and other indirect expenses that U.S. consumers are hardly accustomed to having tacked onto their electric bills or service-station tabs. "The days of cheap energy are definitely behind us," Robert Dunlop, chairman of Sun Oil Co., told the Nassau conference.

Since 1970 the price that the producing countries receive for their crude has risen 72%, and the major multinational oil companies are committed to additional 10% price hikes in each of the next two years. In addition, they are negotiating with officials of the Organization of Petroleum Exporting Countries (OPEC) on yet another price increase that would compensate the exporters for the devaluation of the dollar in February. The price of interstate natural-gas shipments, which is regulated by the Federal Power Commission, has never been allowed to surpass 34-c- per 1,000 cu. ft. But if Congress votes to deregulate natural-gas prices in new contracts, as Nixon proposed, the economists expect prices eventually to rise much closer to their current free-market level in intrastate shipments. Recently, that has been as high as 560 per 1,000 cu. ft.--or 65% higher than the regulated price.

Next to food prices, there are few more visible forms of inflation than jumps in electric bills or in the tabs for tankfuls of gasoline. Moreover, industries that use inordinate quantities of energy--aluminum, for example--could be gravely injured by higher prices, and all manufactured goods would be affected to some extent.

By 1980, based on current prices and projected growth in demand, the nation's out-of-pocket expenditures for foreign oil might reach $17 billion annually v. $8 billion this year. That staggering annual outflow of dollars for oil is not inevitable, however. As Secretary of the Treasury George Shultz said at Nassau: "We must struggle against these projections so that they do not become accurate predictions." Another projection shows that between now and 1980 the oil-producing nations of the Middle East and North Africa alone stand to collect a quarter-trillion dollars for their natural riches, nearly all of it from Western Europe, Japan and the U.S. In fact, some of the smaller Middle Eastern nations are already accumulating funds roughly twice as fast as they can spend them. Marvels the State Department's energy expert, James E. Akins: "With the possible exception of Croesus, the world will never have seen anything quite like the wealth which is flowing and will continue to flow into the Persian Gulf." Speculation with these funds was partially responsible for the world's recent monetary crisis.

To help curb such imbalances, some politicians and economists are urging the Administration to take on the job of bargaining with oil-producing countries itself, rather than accept the price levels negotiated by the oil companies.

At the Nassau conference, Democratic Senator Henry Jackson declared: "The oil companies acting alone cannot be credible bargainers with OPEC." M.I.T. Economist Morris A. Adelman has gone even further, accusing the multinational oil firms of merely acting as tax-collection agents for the oil exporters. Both he and Jackson have suggested that the U.S. and other big oil consumers join together in a concerted diplomatic effort to break the OPEC cartel.

Actually, some of the potentially dire consequences of the energy crisis may be prevented by the ever higher prices of oil and gas. When a commodity becomes more expensive, it encourages its producers to increase supplies and at the same time pressures consumers to cut down their demand for it.

Moreover, higher fuel prices would hasten the search for gas and oil substitutes that at present are not economically feasible.

The effect of higher prices on demand was demonstrated by a recent Harvard University computer study on household consumption of electricity.

The study predicted that if the "real" cost of plugging in appliances is unchanged over the next two decades, electrical use may nearly triple. But, if the cost goes up by 50%--which seems more than likely--demand will increase by only 80% from its present level.

How to Cut Consumption

Environmentalists are convinced that high costs alone will not be enough to discourage excessive use of energy. Thus they were dismayed when President Nixon's energy message failed to stress conservation as an important tool in blunting the crisis. Nonetheless, an unlikely coalition of industrial, political and environmental leaders are all calling for measures to decrease the American appetite for energy. Senator Henry M. Jackson, who this week will introduce an energy-conservation bill in the Senate, puts it this way: "We need to ask whether we must despoil the hills in Appalachia to air-condition sealed-glass towers in New York. We need to ask whether we must put ourselves in hock to Middle Eastern sheikdoms to keep roads clogged with gas-hungry cars."

The fact is that conservation of energy not only saves the environment but also pays off financially. Last year the President's Office of Emergency Preparedness concluded that the U.S. could reduce energy consumption by the equivalent of 7.3 million bbl. of oil a day; that would save about $11 billion in foreign exchange by 1980.

With a reduction from the present annual growth rate of 4.2% to about 2.2% by 1985, says the Ford Foundation's Freeman, "the savings would be small at first, but would grow steadily. And they would make the difference between a crisis and managing the problem."

Conservationists point to the following major areas in which large amounts of energy could be conserved:

TRANSPORTATION. In this sector, which now accounts for 25% of total U.S. energy use, the prime offender is the automobile. It not only operates inefficiently (using only about 20% of the energy potential in gasoline; the rest is thrown off in heat and exhaust), but also is used wastefully. The Office of Emergency Preparedness says that 54% of all trips are less than five miles--e.g., simply driving to the corner drugstore to buy a pack of cigarettes. Even on longer commutes to work, the average six-seat car contains only 1.4 people. To the dismay of Detroit, some conservationists propose a tax either on bigger engines (which burn more gasoline than smaller ones) or on poor gas-mileage performance: cars getting more than 20 miles per gallon would escape the tax altogether. Beyond that, all energy savers favor mass transit where possible --plus higher commutation charges at tollgates and parking lots to encourage car pools.

INDUSTRY. Today's factories consume 39.5% of all energy supplies. Shearon Harris, president of Carolina Power & Light Co., revealed at Nassau that his company is helping to teach customers who consume more than $500,000 worth of electric energy a year how to reduce their usage by up to 10% through changes in design and operating processes. Recycling can also produce big savings. In the nonferrous-metals industry, for example, recycling uses only 20% as much energy as is required to refine the metal originally. Freeman stressed the point: "Our solid wastes by and large contain a better-grade ore than our mines."

HOUSING. Together with commerce, housing consumes 35% of energy production. A major saving can be made with proper insulation, because in the average home about 25% of the heat escapes through the roof. Turning down the thermostat can also make a big difference. A difference of only two degrees year-round in American homes, says University of Tennessee Physicist John R. Gibbons, could be the equivalent of saving 100 million tons of coal per year. Perpetually burning pilot lights on gas stoves are another wasteful luxury that can be eliminated. Moreover, home electric bills could be cut if consumers would buy the most efficient appliances. Electric heating is notoriously wasteful. The least efficient air conditioner now on the market, for example, uses 2.6 times as much electricity as the most efficient one, while accomplishing the same amount of cooling. How is the consumer to know which appliance is efficient? Conservationists want legislation that will force appliance makers to label the efficiency of their products. For his part, President Nixon has asked manufacturers to provide this information voluntarily; their response remains to be seen.

OFFICES AND BUSINESSES. New York Architect Richard Stein reckons that there are plenty of ways to cut energy costs in office buildings, starting with lighting standards. These are set to meet unnecessarily high requirements, he says, and waste electricity. Stein also would avoid designing buildings with sealed, all-glass facades (he advocates windows that open). Such little design changes, he estimates, could reduce air-conditioning needs by 20%. Others suggest staggered work shifts, some at night or even on weekends, to ease peak daytime loads on power plants.

All this will require legislation, some of it politically unpopular; most Americans will resent being pushed into mass transit or having to pay more for housing because of revised building codes. Still, several states are preparing legislation to break what Massachusetts Governor Francis Sargent calls "the endless cycle of energy addiction."

Far-out and Far-off Solutions

No matter how efficiently man exploits, delivers and uses the earth's remaining oil and gas deposits, they may well be all gone in little more than a half-century. Coal deposits will last centuries, but getting at them without ruining the landscape and burning coal without hopelessly polluting the atmosphere will require new technologies and additional inputs of energy. Yet the Nixon Administration's new budget calls for only $770 million for research and development in the energy field --far less than the $2 billion a year some scientists say is necessary to develop in time the alternative energy sources necessary to maintain a technological civilization. Some of the more promising sources:

SYNTHETIC FUELS. The vast resources of coal could be used to produce a variety of synthetic fuels. In coal gasification, for instance, coal is brought in contact with steam. Hydrogen atoms in the vapor combine with the coal's carbon atoms to produce a hydrocarbon similar to natural gas.

A major hitch to coal-gasification schemes is cost; all the heating and processing must take place in expensive aboveground plants. But Physicist Glenn C. Werth and his colleagues at the AEC's Lawrence Livermore Laboratory in California have proposed a less expensive alternative. They believe that it may be possible to create methane in the earth by forcing oxygen and water into fractures created with the help of explosives in coal seams. The cost, they figure, would be between 400 and 600 per 1,000 cu. ft., less than the price of liquefied natural gas now delivered from overseas by tanker.

The vast amounts of shale found in Colorado, Utah and Wyoming could also be important sources of oil, yielding about 25 gallons for every ton excavated. Both shale mining, which leaves great quantities of waste material above the surface, and strip-mining for coal despoil the landscape. But the exploited landscape could satisfactorily be restored--at a price.

There has also been a renewal of interest in another artificially produced fuel: hydrogen, the lightest and most abundant element in the universe, which can readily be produced by electrolysis of water molecules. Highly combustible, it has already proved its importance as a space-age fuel: it was a reaction of liquid hydrogen (at a temperature of less than -- 350DEG F.) and liquid oxygen that gave NASA's big Saturn 5 rockets their final boost to the moon. Properly handled, hydrogen might be burned to heat homes, generate electricity or power cars; the only major waste product is water. A more direct use of hydrogen could be in efficient fuel cells --battery-like devices, also used in spacecraft, that produce an electric current from a reaction of hydrogen and oxygen.

MAGNETOHYDRODYNAMICS. Even the best fossil-fuel plants operate at about 40% efficiency. Only that portion of the fuel's energy is converted into electricity; the rest is simply turned into waste heat. A more efficient power-generation scheme, magnetohydrodynamics, creates an electric current by passing a stream of hot, ionized gas at high speed through a powerful magnetic field. MHD plants should be able to operate at nearly 50% efficiency. Unfortunately, the U.S. is leaving almost all research and development in MHD to the Russians, who figure that it will eventually fill 10% of their electrical needs.

GEOTHERMAL POWER. Though underground reservoirs of steam and water have long been tapped in Iceland, New Zealand, Italy and Japan, the only large geothermal enterprise in the U.S. is a steam field known as the Geysers in California's Sonoma County. There, steam from deep in the earth drives turbogenerators that produce some 302,000 kw. of electricity, roughly 40% of San Francisco's total requirements.

A greater challenge to scientists lies in finding ways of utilizing the earth's internal heat in the vast areas that are relatively barren of subterranean water. One proposal, under test by the AEC's Los Alamos Scientific Laboratory, involves sinking two side-by-side holes deep into the earth until they reach hot basement rock (approximately 1,000DEG F.). Then by pumping cold water into one hole, the scientists hope to extract steam from the other. Project Director Morton Smith reports that test borings to a depth of only 2,500 ft. (v. the final goal of 7,500 ft.) already have produced significant heating. Battelle Memorial Institute is proposing a similar experiment in Montana.

Indeed, the U.S.'s potential geothermal resources are so rich that a National Science Foundation report recently estimated they could generate the equivalent of today's total U.S. electrical output by the year 2000.

SOLAR ENERGY. Rooftop solar stoves, used to heat water, are found in Australia, Israel and Japan as well as in some areas of the U.S. Scientists now want to convert sunlight into electricity --a much more difficult task. One technique, proposed by Aden and Marjorie Meinel, a man-and-wife team of scientists at the University of Arizona, involves spreading a "solar farm," consisting of piping containing a mixture of chemicals, over 25 sq. mi. of desert. Heated by the sun, the mix would be used to make steam, which would power turbines capable of producing some 1,000 megawatts of electricity.

WINDS AND TIDES. Though the earth's winds are too irregular to serve as a major power source, Marine Engineer William E. Heronemus figures that they could still be helpful. He suggests building high windmills out in the ocean on floating platforms, where they could generate the electrical power necessary to distill and break down sea water to obtain hydrogen for fuel cells. The old idea of tidal power is also getting new attention. By harnessing the daily rise and fall of the tides (average: 27 ft.) in the Rance River estuary in Brittany, the French are producing some 240 million watts of electricity. In North America, most of the promising tidal sites, like the Bay of Fundy between Maine and Canada, are located so far from potential users in large population centers that much of the cheap electricity would be dissipated in transmission lines before it reached them.

NUCLEAR POWER. At present, 171 nuclear power plants are either in use or in various stages of planning or construction in the U.S. But almost all are conventional water-cooled reactors fueled by uranium 235, a rare isotope of uranium that is becoming increasingly difficult to mine and process economically. To avoid a uranium "crunch," President Nixon has ordered development by the 1980s of a new type of reactor called the fast-breeder, a name derived from its unique capability: during the chain reaction, surplus neutrons from the atoms of U-235 in its core bombard a surrounding blanket of U-238, a much more plentiful but nonfissionable form of uranium, and transmute large amounts of it into plutonium. This fissionable byproduct can then be used as a fuel in other breeders. Thus breeders should be able to stretch existing uranium supplies for several centuries. One big drawback: the fission wastes are highly radioactive and extremely difficult to store.

Most scientists believe that the long-range answer to man's energy needs may lie in thermonuclear fusion. The process that fires the sun and all the other stars, fusion releases enormous amounts of energy--but only small amounts of dangerous radioactivity --through the combination of light atoms of hydrogen to form heavier atoms of helium. The earth's seas contain an almost unlimited store of an isotope of hydrogen especially suitable as fusion fuel: deuterium, or heavy hydrogen.

But controlled fusion, as opposed to the uncontrolled variety in an H-bomb, is extremely difficult to achieve. Not only must the deuterium be confined in a dense plasma, but it also must be heated to temperatures of some hundred million degrees. Even if fusion research is vastly expanded, thermonuclear power will probably not be available as an energy source for decades to come.

Until those alternative technologies can fulfill their promise, however, the U.S. must continue to rely on conventional fuels--and to confront the problems that their procurement and use entail. As the environmental movement demonstrated, how fast and effectively the nation faces up to those problems depends largely on public awareness that an energy crisis exists; it was only after the air and waters had become dangerously polluted that the public awoke and demanded the steps that are now gradually beginning to turn the tide of pollution. The U.S. may have even less time to make important decisions about energy. When the gas tanks run dry and the lights begin to blink out, it will be too late.

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