Michael Graetz’s “The End of Energy” surveys 40 years of energy policy making. It isn’t pretty.

Michael Giberson

Michael J. Graetz, "The End of Energy." (Book cover)
Michael J. Graetz, "The End of Energy," MIT Press, 2011.

Michael Graetz’s The End of Energy is a fascinating run through 40 years of U.S. energy policy making. Engaging and at times even entertaining if you are at all interested in energy issues. In Graetz’s telling it is mostly a story of 40 years of failure, though he notes a few successes along the way.

I absolutely loved that the first chapter began with President Nixon’s decision to impose wage and price controls on August 15, 1971. If you think that wasn’t energy-policy relevant, then read that chapter (the publisher will let you read it free). Just note that the Arab oil embargo just over two years later caused barely a hiccup in U.S. oil imports; the gas lines and shortages were mostly due to the remaining Nixon oil price regulations. (Yet, 40 years later we still blame OPEC!)

Graetz proceeds to pull us through the swamp of 1970’s energy policy. President Ford joined Congress in giving us automobile fuel economy regulations. President Carter pushed an astounding range of proposals, succeeded on some but failed on others,  and lectured Americans for their supposed consumerist excesses. The book does a good job of surveying the problems created by interstate natural gas price regulation and the difficult politics of casting off that burden.

Reagan’s presidency doesn’t get much attention. Oil and gas price decontrol seemed to work, but these policies were initiated by Carter. After Reagan comes a decade and a half of relatively low energy prices, but for the spike around the Iraqi invasion of Kuwait in 1990. Not much to report, Graetz suggests, as the urge for new energy policy rises and falls with energy prices.

Energy prices pick up again in the mid-2000s, and after a few words on the Energy Policy Act of 1992 we find ourselves in the middle of climate change discussions and the massive difficulties that come with finding reasonable policy. Graetz devotes a late chapter to Congress and the attempted making of a cap-and-trade law. It is enough, perhaps, to turn the most die hard advocate of cap-and-trade into a carbon tax proponent (excepting that, had Waxman-Markey pushed a carbon tax, then a look into the sausage factory likely would have produced the opposite impulse). The book winds down contemplating the BP oil spill in the Gulf of Mexico and the Obama administration’s efforts in response.

The book mostly covers domestic federal coal, oil and gas, environmental and some nuclear power issues. Relatively little attention goes to electric power beyond nuclear or to  international issues, except when discussing climate change politics. Not much on ethanol and just a little on solar and wind power. Still – coal, oil and gas, the environment – these are where the big money is and so that is where the politics have focused. One lesson of the book seems to be that lobbying expenditure is a product of policymaker ambition and the size of government, and not the other way around.

The hazard of writing a current events-type book is that the book must end even as events continue. So Graetz laments that 40 years of energy policy making hasn’t put a dent in our “energy dependence,” and practically at the same time we have begun importing less oil for the first time in decades. Domestic oil and gas production is up in recent years, and what is more, it is a development that has come about mostly without the attention of federal energy policy makers. (Or perhaps in part due to their lack of attention, even admitting some federal R&D support for oil and gas drilling technology.)

Well, we can’t blame Graetz because history continued after his book ended. It is a strength of his book that is gives us some idea of what to expect of the next few years, as the politicians and regulators in Washington DC begin to take notice of this domestic energy development. I wouldn’t score all of the wins and losses quite the way he does, and I’m not sure where his interest in more grand energy policy comes from given the fairly damning assessment of the federal energy policy system. Still, the book offers its readers a fair view of and deeper insight into the last 40 years of federal energy policy.


2 thoughts on “Michael Graetz’s “The End of Energy” surveys 40 years of energy policy making. It isn’t pretty.

  1. Other factors in the recent decline in oil imports are reduced demand (from economic weakness and high prices) and the use of biofuels. While the former is not policy driven, it’s hard to argue that biofuel production is not the work of federal policy makers.

  2. A quick romp in U.S. EIA data and reports turns up some data and this analysis from last year – http://www.eia.gov/oog/info/twip/twiparch/110525/twipprint.html – which mentions the factors you raise in trying to explain the decline in oil import dependence from 2005 through 2010. In brief, I’d guess that ethanol has played a role about comparable to domestic production, and I’m not sure how lower consumption compares to these two factors, but it has also played a significant role.

    Some notes if you want them:

    Over that period ethanol net inputs (into domestically-used fuels) rise about 500,000 bbl/d, more than tripling from 230,000 bbl/d in 2005 to 779,000 bbl/d in 2010. However, in fairness we’d want to scale the net contribution of ethanol down since it draws on imported fuels itself as a production import. Not sure how much, but some. Also over this period, the U.S. has gone from importing to exporting ethanol.

    It is difficult to easily piece together the decline in demand on a comparable scale. Partly this is due to crude oil being used in many products, not just to make gasoline. In addition, the a fairly serious drop in domestic demand for gasoline (off as much as 25 percent or so from 2005 to 2010) has at the same time been accompanied by a noticeable rise in petroleum product exports. I don’t have comparable numbers but agree that it has been a factor.

    Domestic production had been falling pretty steadily from 1985 until 2008, after which it rises in 2009 and again in 2010 (and again in 2011, but they don’t have all the data posted for 2011). Using the EIA’s 2005 as a baseline, domestic production was down through 2008, but in 2009 exceeded the 2005 amount by an average of about 200,000 bbl/d and in 2010 by about 300,000 bbl/d.

Comments are closed.