In an important paper on the history of the financing and politics of energy production in the US, Dr. Priddy casts new light in dark corners of American history.  The jumping off point for President Jimmy Carter’s famous address often called “The Malaise Speech,” was a sermon on the problems of our nation.  Journalists and historians have often dissected this part of the speech.  The second half has been ignored.  Dr. Hervey Priddy, an expert in the energy industry, took it up as the subject of his dissertation.  Carter suggested solutions focused on US energy independence.   When Al Gore faced off against George W. Bush in the 2000 campaign, Gore was billed as an energy guru.  But not once during the campaign, which some billed as Big Oil against New Energy, was the subject of our captivity to the volatile and dangerous nations of the Middle East mentioned.  The then venerable NY Times would not touch the subject.

Energy independence is still crucial to the US.  We are a huge country with a dilapidated infrastructure.  You can go anywhere in the EU by train.  In the US you risk falling bridges, old equipment and irrelevant schedules: most trains arrive late, whether or not you pay extra for Acela.  Americans are bound to their cars.  The Ford Motor Company, publicly held but fortuitously manned (or womanned) by over thirty members of the Ford family, is creating cars that make sense.  They are fuel efficient, but comfortable and convenient.  The Wall Street Journal recently ran a piece by a gentleman who had replaced his Mercedes with a Ford.  Tesla cars, which are battery driven, have become a hot item.

But in the meanwhile we need domestic fuel to control costs and to free our foreign policy from the demands of oil.   In Dr. Priddy’s paper you can read how we once had an opportunity to do this and why it was lost. In sum, the price of oil dictates our policy.  When OPEC cut us off, we had to look elsewhere for supplies.  Exxon was a crucial part of the new plan.  They backed off when oil again became affordable.  The industry is not concerned about the dangerous politics of this matter.  Profits are enough to pursue any policy.  What’s good for Exxon is not necessarily good for the country.Is there a lesson for entrepreneurs entering the fields of solar batteries and shale oil?   Dr. Priddy’s paper is a brilliant case study of how business and government both face off and merge.

“The United States Synthetic Fuels Corporation was a superb idea. Its objective was a bold step by a president to address America’s addiction to imported crude oil, which had made the nation vulnerable to the vagaries of an unstable region of the world. Unfortunately, a vacuum of presidential leadership, congressional meddling, and embarrassingly poor management cursed the SFC from its very creation.”  Dr. Priddy writes.

“Once elected, President Carter wasted no time in taking up the energy issue, acknowledging the great importance of establishing “limits.” Believing the nation could no longer “bear any burden or pay any price,” the president stated in his inaugural address, “[W]e have learned that ‘more’ is not necessarily ‘better’, that even our great nation has recognized limits, and that we can neither answer all questions nor solve all problems. We cannot afford to do everything . . . . So, together, in a spirit of individual sacrifice for the common good, we must simply do our best.”19 Carter’s “primary thought on Inauguration Day was about the potential shortage of energy supplies” affecting the nation.” 

Dr. Priddy’s dissertation is available in full on thie site.  US Synthetic Fuels

What follows is an excerpt, in which Exxon commits and backs out of a shale project with impunity.  Why?  The price of oil declined. What’s Good for Exxon?