Evaluating the national energy plan

To evaluate the long-term effectiveness of the National Energy Plan introduced by President Carter on April 20, 1977, this report summarizes results focusing on three specific questions: Can the Plan achieve its 1985 goals; how effective is the Plan after 1985; and could additional policies secure U.S. independence by 2000. To evaluate its effectiveness, a business-as-usual projection (government policies remain at their June 1977 status) was compared to the Plan. The analysis led to the following conclusions: (1) the National Energy Plan is first and foremost an energy conservation strategy; it does not recognize the severity of the long-term problems; and (2) the Plan's 1985 goal of a reduction in imports is overly optimistic. This analysis projects that imports will increase to 13 million b/d even if the Plan is implemented. Over the longer term (to 2000), the Plan has measurable positive effects. By reducing U.S. energy demand, the Plan postpones the world oil shortage for ten years, to the mid-1990s. While the Plan does not totally circumvent the domestic impact of the oil shortage (U.S. demand for foreign oil is still 13 Mb/d in 1995), the added ten years buy time to bring alternative energy sources on line. Bymore » adding to the Plan policies that accelerate supply, U.S. dependence on foreign oil could be reduced to 5 Mb/d by 2000. This plan would achieve the President's medium-term energy goal, effectively insulating the U.S. from a world oil shortage. With the major reduction in demand that is a consequence of the Plan, nuclear power is no longer a critical part of the U.S. energy supply future; the analysis indicates that even with a moratorium on nuclear power, the goals of the Plan could be met by accelerating coal production and use. In fact, oil imports could drop even further to 4 Mb/d when accelerated coal policies are added to the Plan. (MCW)« less