At the moment there are more than 112 million motor vehicles on the American road. Henry Ford II recently predicted that auto buyers in this country will purchase nearly eleven million new cars this year. And other Detroit executives look forward to 178 million registered vehicles in the United States by 1985.
Detroit's short-run forecasts may indeed prove accurate. But how long can this growth continue?
The environmental effects of the automobile are well known: motor vehicles cause, for example, as much as 75 percent of the noise and 80 percent of the air pollution in our cities, and the industry must face mounting pressure from environmentalists. There is another, even more compelling constraint on the proliferation of cars. Surprising as it may seem, American oil companies, which during the 1960s increased their production of gasoline by 64 percent, will not be able to provide enough petroleum to fill the gas tanks of some sixty-five million additional autos expected by 1985.
This prediction is based on data prepared by the oil industry itself. Reports by the prestigious National Petroleum Council reveal that U.S. oil production is at, or near, its peak. And the prospects for the discovery of huge new oil fields are so poor that Interior Secretary Rogers C. B. Morton has warned of a "frightening energy scarcity" in a few years if present U.S. production and consumption trends continue.
If there will in fact be 178 million motor vehicles on American highways by 1985, the NPC estimates that our oil needs will increase by about 85 percent. During the next decade total U.S. oil production, however, will continue to hover near the current level of eleven million barrels per day—even if the Alaska pipeline is put into operation. (It would contribute an extra two million barrels per day, thus helping make up for a falloff elsewhere.) Unless action is taken to slacken domestic demands, this huge petroleum gap will force the United States by 1985 to import roughly 60 percent of its oil, largely from the nations of the Middle East.
These projections, however, tell only part of the story. At the moment, global oil supplies appear plentiful. But the oil needs of the other industrialized countries are growing faster than ours: annual increases in world consumption are now so enormous that in the 1970s all of the world's oil-using nations will consume as much oil as was used in the hundred years from 1870 to 1970 (and these projected demands will redouble in the 1980s).
This surge of demand will soon begin to send shock waves through the American economy and transportation system. The impact of these tremors can already be anticipated: to the consumer they signal the end of a long love affair with the car, and to Detroit they offer an early warning that its 1985 growth aims are dangerously unrealistic. Unless we exercise foresight and devise growth-limits policies for the auto industry, events will thrust us into a crisis that will lead to a substantial erosion of our domestic oil supply as well as the independence it provides us with, and a level of petroleum imports that could cost as much as $20 to $30 billion per year. (This in turn would produce a staggering balance-of-payments problem for the United States, and give the Middle Eastern suppliers a dangerous leverage over our transportation system as well.) Moreover, we would still be depleting our remaining oil reserves at an unacceptable rate, and scrambling for petroleum substitutes, with enormous potential damage to the environment.
Given the fact that we are already at the edge of an energy crisis of this magnitude, why are our government and industry leaders not discussing appropriate growth-limits policies?
Plainly, any effort to limit economic growth violates our historic belief in progress. The President and his advisers have largely ignored this great and difficult issue, although, in his 1971 message to Congress, the President rightly called for the formation of a single agency to oversee the nation's energy policies. The stress of his message, however, fell not on limiting demand for energy but on developing new technology to meet growing energy "needs." Despite his expressed concern over energy shortage and air pollution, the President has chosen to shore up the economy by stimulating the production of automobiles. Too often the voice of government is the voice of industry. Hollis M. Dole, Assistant Secretary of the Department of the Interior, recently outlined the alarming facts of oil scarcity—only to urge that we avert the crisis by freshly aggressive efforts to discover and extract our remaining oil. Dole has predicted that there are, in the United States, "172 billion barrels of oil remaining to be discovered," and has pointed out that that figure is more than thirty times what the nation consumed in 1970, a fact that would seem to argue the case for restraint, not development, assuming we care about the oil needs of future generations.
For its part, the private sector has been dominated by oil and auto industries whose executives have been unable even to contemplate production plateaus and low horsepower engines. When James Roche retired last December as chief executive of General Motors, he expressed the belief and the faith of Detroit by predicting the inevitability of the auto industry's growth. He then observed: "I think the average American today would give up about anything before he gives up his automobile."
When one considers recent economic history, Detroit's faith in this gospel of growth becomes understandable. The future has indeed taken care of itself. The automobile industry directly or indirectly provides roughly one-fifth of all jobs in the United States. It is one of the pacesetters of our industrial system, and its executives are convinced that U.S. prosperity cannot be maintained unless Detroit's output continually expands. Auto executives have shunned the limits-of-growth issues and concentrated nearly all their energies on the next quarter's sales and next year's models.
The oil industry is a somewhat different case—or ought to be. As the managers of irreplaceable resources, its executives have a plain responsibility to think and plan generations ahead. But the oilmen, too, have been beguiled by their own success. For over thirty years, their industry has been the world's number-one can-do capitalist enterprise. Ever since a consortium of U.S. companies struck oil in the Arabian sands in the late 1930s, oilmen have accomplished supposedly "impossible" feats of exploration and development on all the continents and in such seemingly unpromising places as Arctic Alaska and the backcountry of Australia. With each new oil strike, the prospect of unlimited oil supplies "for our time" seemed assured.
Oilmen have heard cries of scarcity before—and the very oil discoveries which discredited the "doomsayers" of the past now blind these executives to their own end-game statistics.
Nevertheless, the energy crisis poses specific questions which leaders of the oil industry can no longer avoid. At what point will rising U.S. oil consumption endanger our whole economy? When does a national policy that accelerates oil depletion become a threat to the long-term future of the American people? When must we adopt and enforce a remedial policy of conservation?
The unwillingness of the oilmen to discuss such issues is illustrated paradoxically by last year's report of the National Petroleum Council. In one breath, this document describes a grave oil shortage; in the next, it says the shortage can be overcome. This report simply urges "new oil policies" which would enhance the short-run economic position of the major oil companies and hasten the depletion of the nation's petroleum resources. Give us the tools (in the form of new tax incentives and exploration advantages), the oilmen argue, and we'll produce twice as much oil.