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Energy crisis and energy policy
Q: You said that you had been arguing essentially that case for the last 25 years. In what specific ways can you recall that this thinking influenced your dealing with the regulated community? Did the energy crisis and the stagnant economy alter EPA's relationship with the community?
MR. COSTLE: These events put us in direct conflict with the Department of Energy at the time. DOE responded to the crisis by saying that we had to get off oil. We have a lot of coal; let's go to coal. Let's go to nuclear, and fast-track it. We have to get rid of all the regulatory underbrush. DOE assumed that it was the "regulatory underbrush" that was keeping energy alternatives from happening. They didn't grasp the fundamental problems with these technologies, problems that weren't going to go away. That typified the intellectual hubris of the energy crowd. They weren't willing to acknowledge that the problems were real, and not just some malevolent mischief invented by a handful of tree huggers.
The only political ground I could take that was viable was to say, "All right, if you want to go to coal, we can go to coal. But let's do it right. Put money into clean-up, into scrubbers, and accelerate the development of clean-burning technologies." If you make it clear to industry that we have to do it right, I assure you they will find ways to do it, ways that are better than anything we predict right now.
I remember the frustrations President Carter, Stu Eizenstat, and Charlie Schultz went through trying to fashion a national energy plan. There were daily meetings at the White House over the issues. Everybody agreed that we needed to foster competition that would lead to increases in gas-fired co-generation facilities. We knew there was a lot of gas available, which would burn much more cleanly. In that "energy crisis" climate -- which is hard to imagine in retrospect -- EPA acted as a constant pressure point within the Administration, arguing that there were valid environmental objectives, that we could have both sufficient energy and a clean environment, simultaneously. But we had to be tough-minded about it, to keep the Administration in balance.
Q: We were talking about the issue of how the energy crisis and the stagnant economy shaped your relationship with the regulated community.
MR. COSTLE: Clearly, it put us in a polarized position vis-a-vis the energy people, but we held our own. Simultaneously, it elevated to even more significance our decision about coal-fired power plants and new source performance standards. When you put a decision like this in the context of what was perceived as a national emergency, you really get a sense of what the stakes were.
To President Carter's great credit, he really persevered on the merits. I think he was victimized by the embargo, because that sent a ripple of inflation through the whole economy. Higher energy prices, and ensuing panic, led to double-digit inflation, and that killed his presidency more than any other single thing. Added to that was the perception at the time that he was unable to articulate an overall vision of where we were going as a country. He could describe the problems. His famous malaise speech was actually a good speech. But everybody thought of it as weak. The President is supposed to project the image of leading the nation. So when President Reagan came in and said, "It's morning in America," everybody said, "That's a relief." And the public went to sleep for four or eight years, while all kinds of problems mounted.
So the oil embargo was a defining issue in our time. EPA was too often in a very defensive posture. Internally in the administration, we simply set out to do our homework better than anybody else, because we knew that was our best defense. Keep forcing people back to the facts, back to the merits, and do so in a way that was sympathetic to the Administration's energy objectives. Bill Drayton and his staff did a tremendous job during that era in working with the White House and others, in terms of raising the right questions and conducting solid analytical studies. We went out of our way not to be belligerent about the issues, because we realized that would not help. We were, however, very firm in our purpose and the way we argued our case. Ultimately, we came through that era in relatively good shape. I think we succeeded by sticking to the merits and letting time work its way. It reminded me of the time in Connecticut when the first oil embargo hit. There were vociferous debates over siting an oil port and bringing supertankers into Long Island Sound. We weren't able to slay that dragon overnight, but we did let it bleed to death over time. We knew it would finally collapse of its own weight -- bad ideas usually do. But it makes it tough politically. You are in constant arguments with legislators and others who want quick fixes.