October 22, 1998

POWER HUNGRY: A SPECIAL REPORT

U.S. Splurging on Energy After Falling Off Its Diet

---

In this Article

On the Home Front: More Square Feet and 'Vampires'

On the Road: Traveling Farther, and Less Efficiently

In the Factory: Energy Conservation a Lower Priority

In the Political Arena: Calls for Action Face Challenges

---

By ALLEN R. MYERSON

RVADA, Colo. -- Twenty-five years after an oil embargo proved that fuel supplies were neither reliable nor endlessly cheap, the United States has given up almost all the gains it made in conserving energy. On average, Americans have returned to consuming nearly as much energy as ever before.

From 1973, when Arab oil producers choked off their shipments to the United States, through 1983, the nation reduced its energy consumption even as the population and economy expanded. Prodded by higher costs and led on conservation crusades by Presidents Richard M. Nixon, Gerald R. Ford and Jimmy Carter, Americans learned to do more with less.

POWER HUNGRY: A TIMELINE 1973 The Arab oil embargo, begun during the Yom Kippur War, demonstrates OPEC’s power. A new era of scarcity, favoring oil producers, begins. Oil prices eventually quadruple. 1975 To conserve energy, Congress approves fuel efficiency standards and a speed limit of 55 miles an hour. 1979-80 The revolution in Iran and then its war with Iraq send the prices of oil up drastically. 1986 OPEC’s production quotas fail in the face of weak demand. Oil exporters flood the market and prices collapse. The oil industry begins a sharp contraction. But lower prices encourage greater consumption. 1990-1991 The Persian Gulf war begins with Iraq’s invasion of Kuwait, a threat to Saudi Arabia as well. Oil prices jump, contributing to a global recession. 1997-98 The world economic crisis reduces demand for oil. Prices, adjusted for inflation, have fallen this year to 25-year lows.

That effort is still yielding great benefits. Owners of older buildings and homes installed thicker insulation and tighter windows. As technology improved, every new home, factory and car came with far more efficient appliances, machines and engines than in the 1970's. But energy demand has risen so much since the mid-1980's that, next year, the Energy Department predicts, consumption per person will come to within 2 percent of the peak in 1973, before any of these energy-saving advances had begun. Declining energy prices -- now lower in real terms than before the first embargo -- have made the difference. In the dollar-a-gallon era, why spend much time or money saving a gallon or a watt?

Evidence of the more energy-intensive life style is everywhere. Since the early 1970's, as the average household has shrunk by a sixth, the average new home has grown by a third. Even moderately priced homes are now stuffed with energy-hungry features, from central air-conditioning to Jacuzzis and security systems.

Look at families like T. C. and Michael McCracken and their year-old daughter, Lydia. The McCrackens, avid hikers, are far more willing than most Americans to shop for energy-saving appliances or ride the bus to work. But here in Arvada, outside Denver, standard features of their nearly completed tract home include ceilings so high that overhead fans, finding a new season and purpose, are required in winter to blow rising heat back down. With 2,600 square feet to fill, McCracken plans to install a home office, a home theater and a home brewery fed by its own gas line. What Mrs. McCracken calls a "killer kitchen" has all the standard appliances and the electrical capacity for more than a dozen others, plus room to seat a family of 10.

Energy use is rising even faster on the roads. Next year, Americans are expected to burn more fuel per person than in 1973, before the Government set mileage standards. More families have two earners, and the suburbs continue to sprawl, so Americans are driving more than ever. As for fuel economy, the growing popularity of light trucks -- minivans, sport utility vehicles and pickup trucks -- has begun to reverse two decades of gains.

The daily hour to hour and a half that Mrs. McCracken, a personnel manager, has spent commuting and running errands in her Dodge Caravan minivan will stretch by another half-hour once she moves. And McCracken will put more miles on his sport utility vehicle, an Isuzu Rodeo.

Corporate habits are going the same way. Businesses saved more energy than individuals did through the mid-1980's but have used the most extra energy ever since. Chemical producers, among the heaviest energy users, say that in the 1990's they have all but quit making improvements solely to save energy. Electric utilities are cutting reimbursements for installing more efficient heating, cooling, lighting and other equipment at work and at home.

Cheap, abundant energy has in fact produced great benefits, fueling an era of rising standards of living and dormant inflation. Lower demand from Asia has pushed oil prices down even further lately, with shortages unlikely for years.

Growing energy demand is a natural result. But it conflicts with the nation's declared goals of reducing dependence on imported oil and lowering carbon dioxide emissions, thought to cause global warming. It also requires the nation and its oil companies to spend billions of dollars laying pipelines through unstable regions, building drilling platforms in deep seas and defending foreign supplies.

Clearly, the nation relies more than ever on overseas oil. Imports account for a record 50 percent of consumption, up from 35 percent in 1973. Though a rising share comes from secure neighbors like Mexico and Venezuela, the United States still gets about 10 percent of its oil from the Persian Gulf, twice the level in 1973.

The rising use of fossil fuels has also raised the atmosphere's level of carbon dioxide. The Clinton Administration pledged at a conference in Kyoto, Japan, last December to cut these emissions. That is not a simple task, said Daniel Yergin, chairman of Cambridge Energy Research Associates. "Environmental concerns point one way and prices point the other way," he said.

President Clinton is now striving to put energy efficiency back on the nation's agenda. He asked Congress for $6.3 billion over five years, including $3.6 billion in tax incentives and $2.7 billion for research. Accelerating the introduction of electric cars and other technologies would make energy savings nearly painless, he argues. Administration officials note that improving technology has already allowed Americans to live better with far less energy than they would otherwise use. Since the mid-1980's, however, these advances have slowed.

Many corporate executives and members of Congress call global warming a distant peril with uncertain causes. They portray the Administration's plans as a costly threat to the nation's prosperity. They also discount the danger of rising imports, saying that free markets will relieve high prices or tight supplies by promoting increased output and efficiency. In a compromise, Congress allowed $202 million of the $473 million for research this year but nothing for tax incentives.

It was 25 years ago this month, and again in late 1978, that vengeful Middle Eastern oil exporters squeezed their supplies to the United States and raised prices worldwide. A nation that was virtually self-sufficient into the 1950's had become a petroleum captive. Gasoline prices soared, lines at the pump stretched beyond frustration and the economy fell into repeated recessions.

Americans turned down their thermostats and bought fuel-efficient Hondas, Datsuns and Toyotas. At work, they replaced millions of inefficient motors, lighting fixtures and generators. President Nixon called for a national effort on the scale of the making of the atomic bomb.

"Let us set as our national goal," he said, "with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source."

President Carter, wearing a sweater in a televised speech to drive home his point, termed energy conservation the equivalent of fighting a war.

But traumatic memories of oil shocks have long been soothed by plentiful, low-cost supplies. At about $1 a gallon -- compared with $1.10, adjusting for inflation, in 1973 -- fuel is as cheap as ever. United States gasoline prices remain less than half those in Europe and Japan, where energy is heavily taxed. Americans consume more than twice as much energy per person as Europeans or the Japanese.

The Energy Information Administration predicts that, in the absence of efforts to curb growing energy use, carbon emissions from burning fuel will rise 33 percent from 1990 to 2010, while the President has pledged to lower them by 7 percent. The agency's experts scoff at the prospects of meeting that goal unless prices rise significantly.

"If you look at our actions rather than words, it's evident we don't care," said Dwight K. French, a specialist on consumption trends. "Only the next crisis will again make conservation a priority. End of discussion."

MORE: On the Home Front