(00:00:00) there were two anniversaries one was the 50th anniversary of the great crash of 1929 something that the few of us Old-Timers have a faint memory of the other was a six-year anniversary the sixth anniversary of OPEC. And the Embargo imposed on this nation that introduced us to what we now call. the energy crisis and there was one aspect in which these two anniversaries touched at least for me. Because there have been several books recent books written about 1929 and the crash of the stock market the Great Depression. and one of the common themes in those books is that one thing that was wrong in 1929 is that people didn't want to deal with reality weren't ready to deal with reality. the lot of the people that were playing the stock market engaged in games of Make-Believe They couldn't believe that you could have added a Great Depression. They couldn't believe that the market wouldn't bounce back. They couldn't believe that people could lose their whole fortunes overnight and yet that is what has happened. and in some ways when I look at our nation's reaction (00:01:33) to (00:01:35) the energy crisis the energy shortages when I look at our national performance in the past six years. I see the same thing make-believe ostrich Behavior. We don't want to look reality in the face. We want to pretend. That there are some easy way out. At least this is the way I read that history in the first American response. To the oil shortages that have plagued this all these years President Richard Nixon. Gave a speech to the nation. And he laid out a plan. Called Energy Independence and under that plan in 1980. We would be completely independent of other nations for oil. And we see how far wrong that president was. President Gerald Ford and President Carter both in somewhat the same way have tried to come to grips with the problem. They have talked as the speaker did last night about raising prices letting the free market operate. Assuming that if prices were increased which means if we let the OPEC country set the price and we paid more that that would solve the problem. We'll probably that's one way we have to solve the problem, but it's quite obvious. (00:03:02) It (00:03:03) hasn't. Solved the oil problem that were confronted with. And the sad saddest part about it. Is that the nation although three presidents have recommended programs and Solutions in the last six years and for congresses have tried to come to grips with the problem the essentially tonight. The history of the six-year period is one of a Nation floundering. Is one of the nation failing to deal with the real world use of a Nation digging itself deeper and deeper into a hole. There's only one (00:03:44) big (00:03:46) decision that we have made in the last six years. I would submit to you. We have talked presidents Congress has all of us and talk about what we could do to resolve the energy problem. We have talked about the importance of a rich and powerful country such as ours being independent of not being dependent. On other countries for something as important as energy as important as oil, but the only big decision we have been have made almost by default while we were doing all this talking is to import. More oil to become more dependent in 1972. The United States was relying on Imports for something under thirty percent of our oil and our oil bill was 3.6 billion dollars. This year will be clearly in the 70 billion dollar range. Our International balance of payments an indication of how we're doing economically on the world scene have been out of balance most of the past 5 years. And we essentially have been printing money. To pay for oil that we couldn't afford the nation in one sense has been behaving. The way New York City behaved and didn't we all laugh at New York a few years ago. What did New York City do well he did what a city does a city and a nation behave differently. They borrowed money from Banks to pay operating costs. And they did it for about 10 years. And finally the bank's wouldn't loan them any more money. We all laughed and we said well how (00:05:38) stupid didn't (00:05:42) why didn't they know that then ultimately would catch up with him that you can't borrow money and live beyond your means to pay for necessities. But the United States of America for the last 6 years. Has been importing increasing amounts of oil and higher and higher prices becoming more dependent more vulnerable every day. And and it is almost as though the Secretary of the Treasury went to the president at the end of every month and said look we can't afford this oil. then the president said Print money, we've got to have the oil and we'll just we'll just pay for the oil by by printing money. And that's the reason inflation and the crisis of the dollar are in a Paramount way energy-related. That's the first point that I want to make to you this evening that we are in deep trouble. We're not working our way out of the problem. We're digging the hole deeper. And now let me State my thesis to you very simply as simply as clearly as I can in the (00:06:51) beginning. (00:06:55) We have made some very big misjudgments in this country about energy. I ought to know because I was there in the beginning and I'll confess my own sins and errors if you want that question time. but (00:07:12) we (00:07:14) in this nation have created a civilization created a lifestyle. based on cheap energy and we are losing the one thing. That is a foundation of the society and the civilization that we have built cheap energy. We have talked. constantly in a kind of Of strange way about how clever we were and what we could do with science and technology. But if you look back at the last 30 or 35 years, the one thing you see is that we were living in a time which may be a singular time in history it looms that way to me. The period of Cheaper sources and cheap energy from the time World War II ended until about six or eight years ago electric power prices. We're actually decreasing. The price of gasoline was actually decreasing. The price of home heating oil of natural gas. We were living in a period that I believe historians may very well call the petroleum age. The more I live and the more I look at energy the more I see petroleum. Is a beautiful precious singular resource, they'll never be anything like it. They'll never be any substitute for it. There isn't any. It's something that we have been enjoying and we've been living. In the high period of the petroleum age and where and that period is ending and that's the reason that we're in trouble as a nation. And one can look. At this nation's history and of what we have done. And we have taken great pride in these things and they have represented an extraordinary accomplishment in a way. I don't doubt that. I've been part of it. I know what my generation has done. We have built. In what is the most extraordinary engineering project in human human history as system of interstate highways. a network over this whole vast nation of ours and we built that on the assumption. That we had unlimited oil the oil industry in this country was in its infancy. And that we had as we used to say they used to say to me in the 1960s. Well, we have another hundred years of oil but we didn't have another hundred years of oil and we're just finishing the interstate highway system. As we reach the peak of our oil age and our reserves and our production of oil are going down down. And that we see now? That we have committed ourselves to a transportation system that we cannot sustain. We have half the automobiles in the world tonight. We use over half the gasoline in the whole world. We fly half the flights on airplanes that are flown. We use half the jet (00:10:45) fuel. In this country. (00:10:49) We were 25 years ago in 1954. The year, I was elected to congress half the petroleum that was pumped in the whole world except for the Soviet Union. We pumped out of oil wells in the United States of America. We were number one. the number one oil company in the world from the from the early years of this century. Until just a few years ago, and now it has suddenly changed. But we are acting as a nation. as though somehow through science to technology through some miracle. That we can continue as we are that we can continue with the automobile this wonderful convenience vehicle that we've all enjoyed. I'm part of it. I'm right there with you. I'm going to be flying on a jet plane in the morning. Let's not kid ourselves. But can we continue? Is there a solution I think the last 6 years says to us something. Several things rather clear number one. There is no easy way out. There is no real substitute for petroleum. If there was wouldn't Science and Technology have come up with it in this period President Carter now in his desperation has proposed this sin fuel program billions and billions of dollars. And we're going to go out in North Dakota and Montana and other states and we're going to try and synthesize liquid fuels from coal and from oil shale. And I wouldn't bet very much that these these projects are going to sustain us. I would a lot rather myself and I'll come back to this later. That we put this money in letting the farmers of America develop energy sources on the farms using the products of forms. To help solve our energy problem rather than rushing out and pretending that we're going to build enormous plants and somehow we're going to provide the answer to the shortages that Loom before us the record of the last six years indeed nearly. The last 10 years is very clear. We have moved across a watershed and energy water shed into a new period of time. For the last eight years year by year. You can add up the figures. I ought to have a chart that I would show you here on the wall. That is the real world. We have been using twice as much oil. Each year and twice as much natural gas as we are finding new supplies of these resources. The oil companies have been telling us give us higher profits. Give us more money. We'll go find more oil. They're out there trying desperately. I give them high marks for trying they're doing more drilling than they've ever done before they're finding small pools of oil. There hasn't been a large a really large oil field discovered in the United States of America since the Prudhoe Bay field in Alaska in 1968. That's the predicament where I am. In the last six years Nixon's energy people my friend Rogers Martin Secretary of the Interior spent a whole year running around the country telling people were going to go out on the continental shelf. That's where the oil is. We're going to show the Arab Nations. We're going to ruin the OPEC cartel. Well, they've been drilling on the continental shelf for six years and mostly what they found is dry holes in the Gulf of Mexico in the Eastern section on the Atlantic Shelf. In the Gulf of Alaska in the big petroleum Reserve up near Prudhoe Bay in Alaska 75% Just think of that for a moment 75% of the oil wells ever drill anywhere in the world have been drilled in the United States of America. And we have the best petroleum geologists in the world. We have the latest and best techniques don't tell me that they didn't drill the best prospects first. We're now in the bottom of the barrel. We're in real trouble. And the most important thing for our nation in the next few years. It's a face up to the fact. That we are at the end in the declining phase of the petroleum age in this country and to stop betting that some morning. We're going to pick up the paper and read that there's been some incredible new oil field larger than any ever before off Georges Bank or somewhere in Alaska. Or some other place. We have explored this country as thoroughly as any nation in the world will ever be explored with Drilling. We're coming to the end of the line. And we've got to face up to the reality. I can think of no domestic issue. Except the Great Depression of the 1930s that was and is as pervasive. That was and is as important to our whole society as this issue. Energy is the one thing we all took for granted until a few years ago. The energy problem was solved. Technology had solved it. We had no clear power didn't we and it would provide so much cheap electricity. We wouldn't have to meet her it and we see what a mess. That industry is in now. We were too confident. We had too much faith in big science and a big technology and now we're confronted with the problem of what to do. And in my view the thing that we must do is to make across the board in this country basic structural changes of the kind. That most of us have been unwilling to consider until now. What kind of changes? changing our whole Transportation priorities for example The one area that we may waste the most energy using half. The gasoline in the world is obviously transportation and the automobile. The automobile is going to shrink in size. And our use of automobiles is going to decline going to have to we're going to have to turn to and give emphasis on other forms of transportation. Bring the railroads back bring public transportation back. do what some European cities have already done so that all of our cities have places that Walkers and joggers and bicyclists can move about on their own energy another 1/4 of the American people S Health nuts. I'm one of them that if there was some safe place that you could get to and from work with public transportation are using your own energy, you know, zero energy use people would do that but there's not a safe place for people to do that. We were so single-minded in building our systems for automobiles that we said, let's leave people out of it. Everybody will ride in a car and we're wedded to the automobile. It's the big problem. It's the automobile is a hemorrhage. Draining away American economic power tonight. It's the reason that we can't do anything about the humiliation being forced on us by Iran. It's the reason that the Arab Nation some of them they're sending the signals. If they don't like our foreign policy in the Middle East they'll cut off of oil and we'll be back next year or the next in another in another shortage crisis. We're in deep trouble it means and this is where to me. The whole problem gets interesting and exciting. And challenging particularly to the younger generation. We're going we're going to have to reconsider. Most everything that we have done and are doing in this country. A few years ago some time back in the 1960s. You may remember this someone came up with the cute idea and this became a kind of by word at conferences and so on that the big problem For the United States in the 1980s. Now that we had solved the economic problems. The economic cycle was licked. The energy problem was solved. We were moving into the post-industrial age when machines would do all of our work and it's a big problem of the United States of America in the 1980s. Which figuring out what to do with our Leisure Time. You remember that one it had quite a Vogue. I always thought that was rather boring and that it never never presented much of a challenge, you know, where we going to watch television or do something else have a no but now It's quite clear to me. We Face a much larger and more interesting. And more challenging future. We're essentially going to have to redesign America. Redesign our whole transportation system as I mentioned to go Rican reconsider and redesign the cities of America. We're going to have to make our cities more Compact and efficient as machines, which is one of the things that cities are in the industrial field in the industrial world. The new watchword is Energy Efficiency energy conservation. The businesses that are successful some of the ideas. I understand at this conference today may not be the big conglomerates in the big entities. We may be entering into a period when the the backyard inventor and the American individual with a little Ingenuity to do something about his own life or his own home or his own car or his neighbors or his communities when we honor that person again rather than thinking that the future lies with a nuclear power industry or with General Motors or with Chrysler or something like that. We may face an interesting future in that regard. Most of our design of the last 30 years the design of automobiles the design of cities the design of houses of buildings of machines was based on cheap energy. And therefore most of it is wrong when we look at the future that faces us. We're going to have to design the kind of homes and plan the kind of cities and the kind of machines which are based on energy conservation and Energy Efficiency. That's the new challenge that we face. And I think the next 25 years the next 50 years perhaps in this country. will be in many ways the most interesting period of all in our history we of my generation like to think they'll what they're going to have a hard time beating the last 30 years. We did some incredible things didn't we no question about it, but I think it was rather easy. I think it was cheap energy cheap oil. That made it possible for do for us to do much of what we have done. I think the real test of American Ingenuity American innovation. Lies ahead of us now. Because we're going to have to make these big and basic changes. Well, that's my my message. I don't have all the answers. I do have the feeling. If there's any sector of America that I feel good about and rather optimistic about it is it is agricultural America and I can tell you why and brief fashion as our petroleum age ends one can see that the energy sector is going to be the big problem sector. some areas of the United States particularly, the the oil states are going to face very big economic and other problems, but the big winner that I see before us the big National winner is American agriculture American agriculture in the sense that this rather Grim world were headed to with more and more people that this may this will be a product the United States has that will have more and more value to us in more and more ways, but the same time Part of the energy solution may come from the agricultural sector. I've been talking to some of the professors on this campus and in other places the gasohol ethanol the other forms of energy. I expect to see your every American forum. In this country self-sufficient in energy in the next five or ten years and I think a few years after that. We're going to see American Farms providing a surplus of energy from from the crops that are produced Minnesota a nation of 10,000 lakes become a become a nation of 10,000 or 15,000 Stills if what I'm anticipating happens, but that may be that the way we have to go as I've been telling people maybe the country we ought to watch is Brazil a country that has no oil with the can remain but can raise enormous quantities of the kind of crops. They can be distilled and processed into energy. We Face a very interesting time. It's not going to be easy the easy world that we thought we had achieved it disappearing before our eyes. We Face a very fascinating and very challenging time. Thank you. What do we do to get their olds functioning won't be easy? We have we have let the railroads die in this country as a matter of national policy. We decided really that. That we didn't need the railroads. We're the only country the only industrialized country not even Canada that made a decision like that. We decided to go with the truck. As we saw earlier this year if there's any industry that I would single out as a likely candidate to be a dying industry at the trucking industry will have a great future. In deliveries from point to point and short Transportation. But if an if a railroad is six or seven or eight times as efficient and that efficiency coefficient will increase than a truck. We're just not going to raise all the vegetables and fruits in California or someplace on the west coast and transport them by truck all over the United States. The price of fuel is going to forbid it. We're going to have to go back to the railroads. We're probably going to have to have what we had for the build the interstate highway system. Some kind of trust fund or National Fund to build back. The roadbeds and the the basis for railroad. I think we're going to see a railroad Renaissance not only in terms of of the heavy traffic. I think that people in some parts of the country in the future. Well, it's entirely possible. The railroads will play the kind of role in this country 20 years from now that they did 40 years ago that they did during World War Two where they were the big Workhorse for our country at that time. Weather's been a big a lot of talk about this. He says why don't we single out countries that need help from us and that haven't fully developed their oil reserves and help them develop the oil reserves and then have a kind of partnership. I think again we've engaged in in some make-belief on this, you know two years ago in Mexico announce the results of their latest expiration. There was a kind of sigh of relief and everybody said well gee this is great. Mexico is a new Saudi Arabia. They're our friends and neighbors will get our oil for Mexico. Remember all of that talk and the Mexicans have made it quite clear to us because they don't feel all that friendly to us because of the way we've treated them for the last 50 years that number one there. They're going to produce their oil in a very gradual and systematic way that number two, they're going to charge the OPEC price and that number three some of us looking at some of the phony figures are saying they've got some big oil fields and so on but they're not another Saudi Arabia there. There's something less than that. I just wish that this strategy that you suggest. Was practical and feasible the Chinese? May have big oil fields the petroleum geologist that I talked to their familiar with the world picture. Think that the oil companies were smart, you know, most of the expiration the world is done by American oil companies. We went to Indonesia into the Middle East and and to Latin America. Most of the oil in the world has been discovered by the American multinational oil companies. We've been the leader in this field and and there probably are there may be a few places. We're a few countries where there are big oil fields that remain to be discovered. But my guess is they're going to behave just like Mexico that they will say. Well, you know, we'll let you come in and explore but if you find it, it's our oil and we're going to sell above the OPEC price. Well, I I agree generally as I've already said we're going to have to tighten our belts. We're going to have to make some changes and it's going to affect our lifestyle. My own view is though that a lot of the American lifestyle that we are so proud of is based on waste and extravagance. That's the reason I was suggesting to all of you to think, you know, 25% of our travel is wasted I often times as I get on these airplanes. I wonder what would happen if I took a census and watch walk down the aisle, why is everybody taking a trip? You know, I mean Americans we love to travel it's kind of a disease in a way. I think we're to mobile as a nation. I think we have lost some of the rootedness. That we had 30 or 40 years ago that I think was a very precious quality. There is a large part of the American people that don't feel at home unless they're in motion. They're on Wheels. They're moving. They're flying they're going somewhere, you know where they're going and what they're going to do whether it has any economic purpose, but they're moving. I think that maybe one thing that's wrong and that if we slow down if we traveled last if we use less energy if we concentrated more on being efficient that we would be a happier more fulfilled civilization. I could make an argument on that basis and that much of what we're talking about as the American standard of living is extravagance and ways and that squeezing that extravagance and way Style. Although if somebody wants to say well you're you're reducing the American standard of living. I say the hell we are we're reducing ways for reducing (00:32:03) extravagant. (00:32:06) We can build homes. We know that in this country that use half as much energy to heat them. Some of them are being built here. Now homes of new design. We can build automobiles that will give us twice as much per gallon. Good ol Exxon, and I applaud them if they're going to we're going to let him have these prophets let them get out and do things to help the energy crisis. They're trying to buy this electric company that has a new Gadget that we can fit on every motor in this country and reduce the amount of motor that are of energy that most electric of electricity the most motors used by 50% That's American Ingenuity. Let's go What were the lot of American people if you say we're going to make you change your lifestyle you say you're reducing my standard of living? I think that's (00:32:58) bunk. (00:33:01) That's a very very good question. What about nuclear in the in the electric power field? And and because of a decisions that northern states are made Minnesota is one of the states Minnesota Illinois few other areas that have gone further down the nuclear (00:33:20) path than others. (00:33:24) I am a former sinner. I guess. I was 10 years ago and unquestioning supporter of nuclear power. I'm not a Ralph Nader now, I don't think we ought to shut power plants down. I think we ought to put nuclear power in a holding pattern until these very big problems are resolved and I am dubious quite frankly. Because I can remember and I knew a lot of the great scientists that I had held in aught that time in the 1960s that said oh we can solve the waste disposal problem, but we can handle that. There will be no problem and here 15 years later. They've done nothing. I think the way for nuclear power to regain its credibility in this country. Is to begin to resolve these big unresolved problems that plague this interest in this industry. And and I think we're going to see as a result not a shutdown of the nuclear power industry, but we're going to see nuclear power essentially on trial. We're going to have a period probably the next few years where there aren't very many new nuclear power plants started where everybody's looking at it with a cold eye and where performance is the essence of it. I think we also may be horrified when we learn the thing that always bothered me was exporting nuclear power plants to Korea and the Philippines and countries like that countries that don't have the engineering competence and quality control that we have and my fear really was that we were going to have a three mile island in one of those countries and then I was astonished when we had one in the United States. I I think that. That we put too much of our too many of our chips on nuclear power and I think we're going to have to look at a lot of these other Solutions including the small little solutions that that that can be executed. I was fascinated to see that one of your communities nearby here is thinking of getting a little nuclear power are getting a little hydroelectric power out of one of the dams on the Minnesota River. That's the way we go to the extent that some of us (00:35:55) can (00:35:58) Heat our homes with wood stove so that we don't need electricity electric heat or gas. I think we do that. I think we do thousands of little things that individuals. And businesses can do to make themselves less dependent on petroleum that that's the way we go.