33 Years Later, Carter’s Energy Department Still Struggling to Meet Goals

October 28, 2010 - 1:03 PM

DOE historical photo

(Photo courtesy of U.S. Department of Energy)

(CNSNews.com) – The U.S. Department of Energy, which opened its doors on Oct. 1, 1977 amidst the backdrop of the “Energy Crisis” of the 1970s, is still struggling to live up to the goals the Carter Administration set for it.

The department, which has become a huge federal bureaucracy over the last 33 years, came into being largely as a result of the 1973 oil “shortage” that occurred when Arab nations in OPEC, the Organization of Petroleum Exporting Countries, staged an oil "embargo" against the United States.

President Carter underscored his goal of reducing dependence on foreign oil on Aug. 4, 1977, when he signed into law the bill creating the Energy Department.

“I want to point out that the Department can now, I think, begin to deal in a much more aggressive and effective way not only with the needs of suppliers to increase the production of oil, gas, coal, solar, nuclear powers,” Carter said at the ceremony. “But also to make sure that consumers of our country are treated fairly, that prices are adequate and not excessive.”

However, more than three decades latter, a look at some of the statistics, suggests that the Department of Energy has not been entirely successful in achieving Carter’s goals.

Imports have risen, not declined. In 1977, the U.S. imported 8,565,000 barrels of oil (net) per day, according to the DOE’s Energy Information Administration (EIA). By 2009, net imports were 9,667,000 barrels per day – over a million more barrels per day. In fact, by 1980, two years after the Energy Department was up and running, 37.3 percent of oil consumed in the U.S. came from foreign sources. By 2009, however, about 51 percent of the petroleum consumed by the United States was imported from foreign countries.

Domestic production has declined. The U.S. produced 3 billion barrels of oil in 1977, but by 2009, that was reduced to 1.95 billion, according to the EIA.

Oil consumption in the U.S. is up, not down. In 1977, the U.S. consumed 18.4 million barrels of oil per day. In 2009, we consumed 18.77 million barrels per day, making the U.S. the world's largest petroleum consumer.

Gasoline usage has grown significantly. In 1977, the U.S. utilized 7.1 million barrels/day of gasoline. In 2009, Americans used 8,997,000 barrels/day, or 378 million gallons/day.

Gasoline prices have continued to rise. In 1979, the average price of gasoline in the U.S. was $0.58 per gallon, according to the federal Bureau of Labor Statistics. Adjusted for inflation, that is the equivalent of $1.85 in 2010 dollars. In 2009, the average price of gasoline in the United States was $2.88 per gallon. During 2008, oil prices reached a record high of $145 a barrel, with gasoline prices of more than $4 per gallon throughout much of the nation.

A huge federal bureaucracy was created. The Department of Energy brought together under one Cabinet secretary more than 50 agencies that dealt with energy, including the Atomic Energy Commission. Upon its creation in 1977, according to official estimates, the new DOE employed a total of 20,000 people. Today, the Department of Energy has 16,000 permanent employees and 100,000 contract employees around the nation.

The agency’s budget, meanwhile, has ballooned from $8.4 billion in Fiscal Year 1980 to $26.5 billion in FY2010.

In an embarrassing moment for the department, the DOE's inspector general revealed in a 2009 report that the agency spent nearly $300 million per year in energy costs for its 9,000 building around the country. Of that, $76 million was spent on lighting. The IG audit discovered that most DOE buildings were still using “bulb technologies” that were introduced over 40 years ago.