The Gerald R. Ford Presidential Library welcomed Frank Zarb to speak at the third installment of their Energy Lecture Series. Zarb has played many roles in both the public and private spheres. He served as Assistant to the President on Energy Affairs during the Ford Administration. He also helped develop and implement the first national energy policy under Ford, during what was a time of great uncertainty in the Nation’s energy history. He also provided crucial insights into energy during the Nixon, Reagan, Bush, and Clinton Administrations. He has served as director on 12 corporate boards, and was at one time the chairman and CEO of the NASDAQ stock market, as well as being on the board of directors of the Lower Manhattan Development Corporation, which helped to distribute Federal aid after the September 11, 2001 attacks.
Zarb’s lecture focused on the inability of our country to develop comprehensive and cohesive energy policy. He stated the importance of how we use, where we obtain, and how we pay for energy and their effect on economic, national security, and foreign policy.
Zarb used the 1973 Oil Embargo imposed on the United States by OPEC (Organization of Petroleum Exporting Countries) as the back drop for what he believes is a prime example for why we need stronger and more serious energy policy. In 1973 the U.S. imported approximately 35% of its oil consumed from foreign sources, mostly those in the Middle East. When OPEC placed the embargo on the United States, in response to our government re-supplying Israel during the Yom-Kippur War, the effects of foreign dependence were felt instantly. As Zarb pointed out, the national GDP dropped by $15 billion, 500,000 workers immediately lost jobs, hospitals ran out of fuel, and the Federal Government took control of our ability to buy fuel-oil.
In 1975 with President Ford now in office, Zarb believed there was the possibility of the nation looking at initiatives that would drive down foreign oil dependence. With President Ford still explaining why pardoning of President Nixon was in the best interest of the country, a liberal freshman class in control of congress, long lines at service stations, and factories shutting down in droves, it seemed like something had been sparked to bring about change. Zarb praised President Ford’s commitment for energy policy, making it a priority in the face of confronting a recession, inflation, rising unemployment, and the wake of the Watergate Scandal.
President Ford was adamant about reducing foreign imports and along with Zarb and others. After four months, the Administration had created a new energy initiative plan that was introduced to the nation in his 1975 State of the Union Address. Ford spoke in front of a joint session of Congress in which he stated his intent to submit this new legislation. President Ford’s plans was all inclusive and if enacted would force conservation, eliminate price controls, raise selected taxes, expand the construction of nuclear and coal power plans, open up the continental shelf for gas exploration, support construction for new refineries, create a strategic oil reserve for future emergencies, provide fuel subsidies for low income Americans, with extra attention paid to safety and environmental standards.
In the end, Congress approved parts of Ford’s legislation, including the strategic reserve, fuel efficiency mandates in vehicles and efficiency ratings for appliances but the remaining and most significant measures that were purposed were set aside. Zarb noted that throughout it all, Ford never lost his enthusiasm, even in the face of his first election campaign after two years in the White House, calling him a “politician who talked about what he believed was right for the country, even if not right for the election campaign”.
Reflecting back on the Ford Energy Initiatives, Zarb discussed how different the world might be today had the package been passed. There would be much greater control over our own energy universe, prices would be lower, and we would be significantly further along in the search for alternative fuel sources. He also believed that foreign policy and defense strategy would not have been distorted by foreign oil dependence as it has been stating that we “probably would not have gone to Iraq if we had achieved Fords plan for a higher level of self-efficiency”.
Zarb then confronted the energy situation today. He reiterated the need for bipartisan leadership in Congress and in the White House, and “enough trust to place the needs of the Nation above their own”. Ultimately, Zarb carved out a proposition for politicians today. He called for representatives on both sides to acknowledge that any bipartisan agreement share political pain to both bases of both parties, claiming that critical solutions could be pursued without fear of political retribution if this was made possible.
