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Chilling Lessons about Energy

by Patrick J. Michaels

This article appeared on cato.org on January 9, 2001.

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Like many indulgent boomers, I live in a big old house -- thousands of square feet of Victorian, to be specific, overlooking the bucolic Shenandoah Valley of Virginia. Years ago, I did as I was told, installing a gas furnace, stove and, recently, a water heater. The very leakiness of houses like this frees them from zillions of trapped allergens and the buildup of dreaded radon, but the price is that heated air escapes, too. So last month I paid $600 to heat air, food and water.

Why? Two related reasons: The price of natural gas is at historic highs, even after allowing for inflation, and the November-December average temperature was the lowest ever measured in our 106-year temperature record.

This, in turn, has created a short supply, resulting in some compensatory behavior. Because prices are high, I now turn the heat way down at night. And the cats, once thrown out, are now invited in as bed-warmers, showing once again why throughout civilization, the number of Homo sapiens and Felis domesticus has been roughly equal.

But there's another way to manage energy shortages that I discovered by searching the newspapers for what happened in previous cold winters. The last ones that looked like this one occurred consecutively, in 1976-77 and 77-78. Rather than allow prices to rise, President Carter announced we were in an "energy crisis" that was "the moral equivalent of war." The headline in the Jan. 30, 1977 Washington Post, 10 days into his presidency, screamed "Carter Urges Four-Day Work Week."

He actually proposed legislation outlawing work. The Democratic Governor of New Jersey, Brendan Byrne, went one better. According to page A5 of the same Post, "Byrne told homeowners to lower thermostats to 65 degrees in the day and 60 at night or face stiff fines and even prison sentences."

So which do you prefer: markets or jail?

It's also worth noting that similarities abound whenever the weather is extreme. That same 1977 edition of the Post also carried this headline, "Changes in the Earth's Weather Are Expected to Bring Trouble," a story that blamed cold temperatures on global warming. Nevermind that this vetoes the First Law of Thermodynamics, which states that heating causes warmth and vice-versa. And, just as the story played ad nauseam a quarter-century later, climate fluctuation was painted as an abject disaster. The Post cited a then-recent (1974) CIA report that said that "climate is now a critical factor. The politics of food will become the central issue of every government."

Nothing could have been more wrong, but little has changed. Two years ago I attended a hush-hush Defense Department briefing where the CIA again stated that climate would be the central issue for global security. The fact that the agency has botched this for 25 years speaks volumes about the continuity of culture in our nation's capital. In that quarter-century world crop production increased at a demonstrably greater rate than food consumption.

What about the future? Dreaded global warming will tend to ameliorate the coldest temperatures of winter more than anything else, "tend" being the key word. In some years, like this one, it won't be sufficient to relieve our usual misery. In others it will be a downright windfall. Consider 1997-98, when warming, in concert with El Nino, reduced the winter demand for energy by a whopping 15 percent, ultimately sending gasoline prices to their lowest level in decades and helping to kite dozens of stocks, which built hundreds of wealth-effect beach houses. Unless my profession is completely wrong (a distinct possibility), winters like that one will become more common.

Nonetheless, sometime in the coming decades this current winter, or something like it, will probably repeat. If we don't have the energy supply, so will this year's outrageous costs. While the last quarter-century has taught us that markets beat the slammer as rational energy use, it's also time to acknowledge that abundant energy and economic wealth go hand-in-hand. Can we drill for energy in the Arctic National Wildlife Refuge and keep the Caribou alive? Of course, as the Trans-Alaska Pipeline, built in response to the 1973 Arab Oil Embargo, demonstrates.

But imagine, if you will, the state of the nation this chilly January if the U.S. Senate had ratified the Kyoto Protocol on global warming, which would have required us to reduce energy consumption by around one-third. Many calculations show that this would require a doubling in the price of fuel. In that case, only the rich could heat their old houses, cats wouldn't do enough to ward off the cold and, as with Jimmy Carter, we'd be inaugurating a new president in four years.