This is an article I wrote for History News Network, which can be found here.
In his recent State of the Union address, President Bush urged America to look towards better energy sources and away from oil. He remarked, “Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology.” He also noted that by improving our technology we could reduce the amount of Middle East oil imports. With the recent issue of gas prices in the wake of Hurricane Katrina, many may think that the oil issue is a recent phenomenon, but they are mistaken. In fact, there have been other times in our nation’s history when the crisis was worse and past presidents had to deal with them as well. In addition, presidents have stated the importance of Middle Eastern oil.
To set the stage, we must go back to the 1950s and the Eisenhower Administration. In his 1957 State of the Union address, Ike noted the importance of a free Middle East as he stated that the economies of Europe could be adversely affected should the Middle East fall into enemy hands. Ike also noted this concern in a January 5, 1957 speech on the Middle East. It must be noted that the Middle East had experienced turmoil both prior to and during Ike’s administration. In 1956, Egypt seized the Suez Canal. In addition, Iran had been in turmoil during the early part of the decade as fearing communist takeover, the U.S. and Great Britain backed a coup that placed the shah in power. These events support Eisenhower’s view that a stable Middle East supplying oil was good rather than one under enemy (Soviet) influence (the Soviets had controlled part of Iran during World War II, but gave it back in 1946). While this does not deal directly with the issue of oil independence, it does illustrate that even 50 years ago, the world was very much dependent on Middle Eastern oil.
The Kennedy and Johnson administrations did not deal with oil in their State of the Union addresses. This may be in part due to domestic events like the civil rights movement and turbulence of the late 1960s, as well as our involvement in Vietnam. Also, the price of oil was relatively low, roughly around $15/barrel in 2004 dollars during their administrations and was decreasing in price as well.
Gerald Ford’s first State of the Union address had much to say about oil. The year was 1975 and America was in the oil crisis set off by the embargo by the Arab states in response to the 1973 Yom Kippur War. Ford described a situation of surplus in the 1960s, whereby the U.S. could control prices by trading to other nations from its own surplus. Ford stated the following:
Economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty, we cannot put all of the blame on the oil-exporting nations. We, the United States, are not blameless. Our growing dependence upon foreign sources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973.
Ford outlined the following solution to the problem:
First, we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977.
Second, we must end vulnerability to economic disruption by foreign suppliers by 1985.
Third, we must develop our energy technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century.
Clearly, Ford was facing a crisis and needed to find a solution for it. The world price of oil at this time was between $30-40/barrel in 2004 dollars, which may not seem like much compared to today, but the price had increased to this from around $15/barrel in about a year, which would translate into oil being priced at probably $90-140/barrel today.
By the 1976 State of the Union (SOTU), Ford still noted that the price was too high and our dependence too great, but also mentioned his recent signing of his national energy bill, which was part of the program he mentioned in the 1975 SOTU. Oil was an issue in 1977 as Ford stated that, “In 1973 we were dependent upon foreign oil imports for 36 percent of our needs. Today, we are 40-percent dependent, and we’ll pay out $34 billion for foreign oil this year.” He also noted that, “Of the major energy proposals I submitted 2 years ago, only half, belatedly, became law.” This raises the question of whether Congress was against the proposals because of politics.
Jimmy Carter echoed much of what Ford had stated about foreign oil dependence in his State of the Union addresses. However, the continued repetition of the issue in his addresses can lead one to believe that with regard to oil independence the president was all talk and no action. During the Carter administration, the world price of oil per barrel doubled from around $30 in 2004 dollars to almost $65, which would translate to oil costing us today almost $100/barrel and the price would have approached $150/barrel right after Hurricane Katrina. Imagine what gas prices would be if oil did cost that much.
The 1980s brought a new president with new ideas into office. Ronald Reagan stated an interesting solution to our dependence on oil in 1981; allow private industry to build plants to make fuels, like gas, from coal. In 1982, Reagan noted that deregulation of oil allowed us to “come closer to achieving energy independence and helped bring down the cost of gasoline and heating fuel.” Reagan did not mention oil in any other State of the Union addresses in his administration after 1982. This may be in part due to the dramatic collapse of the price of oil in the years after. The price fell from about $65/barrel to around $20/barrel in 2004 dollars. If this were to happen today, the price of oil would eventually fall to around $18/barrel, which is about a 70% decrease in price.
President George H.W. Bush made little mention of oil in his addresses only noting the decrease in oil prices after the Persian Gulf War in 1991. His successor, Bill Clinton did not mention oil at all as again prices were low.
In closing, President Bush is not the first president to address the issue of our dependence on foreign oil. However, through examining the State of the Union addresses for many presidents since Eisenhower, one thing is clear: presidents only address the issue when it becomes a major problem and prices are high. This is because of the negative effect high prices and low supply has on our economy. A president will not survive if the economy weakens under his watch. Unlike his father, President George W. Bush faces a period of higher prices which until recently have not had much impact on economic growth, but he will have to act soon before the impact (if prices increase more as they are currently lower than they have been) is really felt.
Note on sources: For this article, I utilized C-SPAN’s website on the State of the Union, which contained the transcripts for all State of the Union addresses since President Truman. It is found at http://www.c-span.org/executive/stateoftheunion.asp. Special thanks goes to Mike Westbrook, reference librarian at Illinois College who helped me find an Eisenhower speech from Vital Speeches of the Day (pp. 200-203). I also utilized a graph on oil prices from http://www.wtrg.com/oil_graphs/oilprice1947.gif to obtain the price figures mentioned.