Green Giant

The End of Energy:
The Unmaking of America’s Environment, Security, and Independence
by Michael J. Graetz
MIT Press, 2011, 384 pp.

Michael J. Graetz’s The End of Energy is a well-documented lamentation over the forty-year failure of the U.S. political system to develop effective energy policies. Graetz, a professor of law at Columbia University, documents the key energy initiatives of successive administrations that have steadily increased our dependence on Middle Eastern oil for transportation and environmentally dangerous supplies of domestic coal for electricity. He starts with Richard Nixon’s “new economic policy” in August 1971, a sharp policy turn that included wage and price controls and ended the dollar’s convertibility to gold, and he carries the story through to the congressional gridlock over cap-and-trade legislation in 2010 that would have capped the total amount of greenhouse gases to be produced and required polluters to acquire permits for their emissions.

The narrative includes familiar episodes such as the repeated miscalculations by the Nixon administration that led to the dramatic increases in petroleum prices by the Organization of the Petroleum-Exporting Countries (OPEC) in 1973 after the outbreak of war in the Middle East. Graetz focuses particularly on Jimmy Carter’s elaborate and technocratic energy reform proposal that was significantly revised by Congressional leaders determined to carve out benefits to particular interest groups. He continues with Ronald Reagan’s effort to reverse some of Carter’s key initiatives, symbolized by the removal of the solar panels from the White House roof. Graetz covers the period from 1989 to 2005 relatively quickly because major initiatives were rare, and the basic patterns had already been set in the 1970s and 1980s. The remainder of the book—about 40 percent—covers recent events, including the climate change debate starting with Al Gore’s documentary, battles over cap-and-trade, and the BP oil spill in the spring and summer of 2010.

The major villain in Graetz’s account is the U.S. Congress, which he describes as consistently unwilling to put the national interest above that of particular industries or regions. Yet he recognizes that the oil and coal industries have extraordinarily deep pockets and that campaign finance has corrupted our political system. But he is surprisingly uninterested in using the case of energy to diagnose the structural deficiencies of U.S. democracy.

Graetz’s preferred energy solution is a carbon tax that would push up the cost of petroleum, coal, and natural gas, so that ordinary market processes would drive conservation and renewable sources of energy. He favors rebating some of the revenue from this tax to households to offset their increased costs and he would use some of the remainder to finance a bigger R&D effort to accelerate progress on clean energy technolo...