A National Energy Policy That Depends On You

September 1981 I'm here today to report on a revolution -- a revolution in the way the Federal Government looks at energy. I'm not talking about a simple change in the relative emphasis on sources -- such as more recognition for coal and nuclear power, with less rhetoric about "soft- technology." Nor am I describing a mere change in focus -- from the demand side to the supply side. And I am not referring exclusively to our obvious goal of budget cuts. No, I'm here to discuss a fundamental change in Federal direction -- one that started as soon as President Reagan was inaugurated, and one that is articulated in the National Energy Policy Plan he sent to Congress in July. That brief policy document was backed up by three volumes of supporting data; but I think I can catch it's flavor for you in just three phrases: * First, various energy forms complete with each other and complement one another. * Second, fair competition among them (which includes honest pricing) will give us the best "energy mix." • And, finally there may be ligitimate arguments about where Federal responsibility in regard to energy spills over into Federal interference; but it's about time we drew the distinction -- and eliminated the latter. This Administration's national energy policy is quite different from any we have had in recent years. It is tuned to human nature and changing times. We are seeking the best practical solutions in the energy -a lot better than the ones we have been offered before, but still something less than perfection. One way we do that is by counting on a fully informed public to guide it's own destiny. And, instead of treating energy as an isolated entity, we recognize it as part of the overall economy. The President's Program for Economic Recovery is as much a factor in energy policy as the specific actions of the Department of Energy. One striking difference from the past energy policy 1s that this policy plan does not say: "In 1985 we will -produce so many hundreds of millions of tons of coal: . . . or . . . "By the end of this century the Nation will be deriving X percent of it's electricity from wind generators." Unfortunately, targets like these are what many people have come to expect from the Federal Government -- and what they think of as energy policy, whether the figures hold up in the long run or not. But . . . think about it! Nether the Department of Energy nor any other part of the Federal Government produces coal, or mines uranium, or manufactures solar collectors. There are only a few sections of the country where the Federal Government generates and sells electricity. So it does not take any great insight to recognize that the amount of energy we will produce or consume as a Nation In the future depends on many factors beyond direct government action. And those future totals cannot be predicted precisely, anyway -- by the Government or by anybody else. According to our way of thinking, the choices should be up to the people. When the free market works within a healthy economy, individuals express their preferences in the marketplace -- adjusting the balance of all energy factors continually in a way that no computer could be programmed to reflect perfectly. So, instead of having the Government issue a rigid set of numerical goals, our main concern simply is that there be enough energy. We want the Nation itself to decide how much that should be, what form it should take, and how that energy should reach consumers. The marketplace decides. Considering the recent past, this is indeed a revolutionary idea. It has some pitfalls, and we won't reach this ideal of free choice overnight. But that is where we are headed. And I'll offer some evidence in a few minutes that the policy has already started working. First, let me give you some of it's highlights: 1) Nobody who appreciates the philosophical underpinnings of this Administration will be surprised that the energy policy shows faith In domestic energy production and the supply side of the economy; but it also recognizes the important role of energy conservation -- the wise and efficient use of energy resources.