Why I Hated Jimmy Carter Jude Wanniski April 2, 2001

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: How Soon We Forget

Whenever I see former President Jimmy Carter in the news, I think of what an admirable fellow he seems to be. In his many public statements during recent years, I find myself marveling at how wise he has become in his post-presidential years. I’ve even scratched my head, trying to remember why I hated the guy so much in his White House years that I could not stand to see his image on television, and would hit the clicker whenever it appeared. It was a long time ago and I remember he was an absolutely awful President, probably the worst in history, excepting Herbert Hoover of course. Now comes Gordon Prather, my old friend the nuclear physicist and currently weekly columnist at WorldNetDaily.com, to bring it all back in living color. In his column this week, he advises President George W. Bush on energy policy, recommending that he try to imagine what Jimmy Carter did -- and then do exactly the opposite. Yes, yes, yes! That’s why I hated Carter. Not only on energy, but on all issues of public policy. On taxes, spending, monetary policy, foreign policy. Read Gordon’s column and you will get the idea what it was like those many moons ago.

© 2001 WorldNetDaily.com

As President Bush addresses the current energy crisis, he would be well advised to continually ask himself, "What would President Carter have done in this situation?" The reason he needs to know the answer to that question? So President Bush will know exactly what not to do.

Whatever Carter did -- or got Congress to do -- was inevitably the wrong thing to do. Double wrong in that the folks responsible for supplying Americans with oil, gas, coal and electricity -- who really understood the cause and nature of the 'energy crisis' Carter inherited (and proceeded to make much worse) -- pleaded with him not to do each and every one of the things he eventually did do to 'solve' the energy crisis. Energy supply-siders suggested what Carter ought to do was to increase supply and predicted that what he wanted to do -- and went ahead and did, anyway -- would reduce energy supply and make the crisis worse.

For example, when Carter came to power, there appeared to him to be a 'shortage' of interstate pipelined natural gas. The price of natural gas that had been introduced into the interstate pipeline system was regulated by the federal government at the well head, and it was obvious to the most casual observer that the reason there was a perceived 'shortage' was that the federal government was holding the price too low. How did the supply-siders know the interstate price was too low? Because there was no shortage whatsoever of so-called 'intra-state' natural gas, where market forces determined the price. That is, until Carter came to power, as long as you didn’t introduce the natural gas that you produced from the gas wells in your south pasture into Carter’s 'interstate' federally regulated pipelines, you could get whatever the in-state market would bear. In Oklahoma, where there was gas aplenty, Carter would only pay you 40 cents on average -- and about 60 cents maximum -- per thousand cubic feet (MCF). But your fellow Okies were perfectly willing to pay you -- at auction -- three or four times what Carter would allow. The only requirement on Okie buyers and sellers was that the gas couldn’t be introduced into the interstate pipeline system.

Jimmy Carter -- who believed with a religious fervor that you had no right to selfishly profit from producing and selling natural gas that God had placed under your south pasture -- was furious. Those dumb Okies weren’t going to be allowed to get away with that. So what did Carter do to solve the interstate pipelined natural gas 'shortage'? He slapped price controls on all domestically produced natural gas at the well head. He got Congress to pass a law that essentially -- unconstitutionally, without just compensation -- seized the private property of hundreds of thousands, perhaps millions, of Americans.

So what did Okies -- who are not, after all, as dumb as Jimmy Carter -- do? Why, they stopped producing the natural gas that God had put underneath their south pasture. Everyone began to leave their natural gas in the ground and sat down to await the opportunity to make Jimmy Carter go away. Now, Carter had sure enough caused a natural gas shortage, for real. No one in their right mind was going to let Jimmy Carter have their gas for $0.60/MCF, when Jimmy Carter was paying Mexico $2.00/MCF for theirs. No one in their right mind was going to go out exploring for 'new' natural gas, and if they did accidentally find natural gas while exploring for 'new oil,' they were certainly not going to tell anyone -- especially not Jimmy Carter -- about it.

When Ronald Reagan came to town, he faced a monumental task -- undoing almost everything Carter had done as President. He did yeoman work, but it was left to President Bush, the Elder, to finally remove the last of the Carter-imposed price controls on natural gas.

And finally, we come to the subject of this column. It has apparently been left to President George W. Bush to undo one of the worst of the Carter 'energy' decisions.

In addition to the natural gas on the family homestead, Carter had also essentially -- unconstitutionally -- seized, without just compensation, the nuclear fuel elements of all state-regulated, privately-owned electric utilities owning and operating nuclear power plants. Carter decreed that those electric utilities had to forgo the 'recycling' of 'spent' nuclear fuel. Carter decreed that these electric utilities had to charge their electricity customers a monthly fee which was to be handed over to the federal government so that the federal government could dig a really deep grave somewhere out west (in a state with only one or two electoral votes). Once a deep enough grave had been dug, the owners and operators of the nuclear power plants had to bury all their 'spent' fuel elements -- which, from the viewpoint of generating electricity, were still worth two-thirds of what they had been worth when they were brand new -- and pay the federal government to stand guard over the grave for the next 10,000 years. There are several rationales for President George W. Bush to reverse this Carter nuclear power 'no-recycling' decision:

Global Warming: One rationale is that there may turn out -- after all -- to be something to this global-warming brouhaha. And if the globe is warming, it may not be a good thing for either trees or tree-huggers. And if global warming is not a good thing -- and if it is somehow connected to the production of carbon-dioxide -- it is barely conceivable that tree-huggers might make some difference by limiting carbon-dioxide emissions. That means shutting down our coal-fired, oil-fired and gas-fired electricity generating plants and building thousands of nuclear power plants. Since we desperately need the electricity, and since nuclear power plants don’t make 'greenhouse' gases and don’t contribute to global warming, we can no longer afford to treat spent fuel elements as if they were dead pharaohs.

Loose Nukes: A second rationale is that the Russians intend to get rid of their excess weapons-useable Plutonium -- enough to make about 30,000 nukes -- by making plutonium-uranium mixed-oxide (MOX) fuel and generating electricity with all those excess nukes. The rest of the world was not affected by Jimmy Carter’s decree to not recycle spent fuel, and so there is already an established MOX fuel infrastructure, wherein spent fuel elements of other nations have been converted into MOX and used to generate electricity in Europe, Russia, Japan and elsewhere. The effect of the Russians getting rid of all their 'loose nukes' as MOX -- which we have pledged to help them do, financially and technically -- will be to vastly increase the size of this international MOX fuel infrastructure.

Deregulation: A third rationale is that the recent deregulation of the U.S. electricity production, transmission and distribution system has allowed the owners and operators of nuclear power plants to effectively be de-coupled -- in the regulatory sense -- from the federally-regulated long-distance transmission companies and the state-regulated electric utilities. That is, even though the nuclear power plants are still regulated -- mostly by the Nuclear Regulatory Commission -- that regulation is oriented primarily to the health and safety of the in-plant operators, as well as the surrounding community.

The point is that there are no longer any federal, state or local price controls on the electricity produced by the independent owners and operators of nuclear power plants. Therefore, these independents are going to do everything they can to generate electricity as cheaply as they can. It follows that they will demand to be allowed to participate in the already existing -- in France, UK and Russia -- and rapidly expanding spent-fuel recycling and MOX production regime. Not only will they be using -- to generate electricity -- the two-thirds of their fuel that Carter insisted they bury in Yucca Mountain, but they will essentially avoid the Carter-imposed tax on electric generation (paid by the rate-payers of the state-regulated electric utilities) to pay for the modern-day tomb of the pharaohs.

In a sense, the owners and operators of nuclear power plants are now like those dumb Okies of the Jimmy Carter era, having all that natural gas in the ground in their south pasture. Except, now, it is the high price of electricity generated by burning natural gas -- which is not in short supply in the ground in Alaska and Siberia, but is in short supply and, therefore, very highly priced, at the inputs to the electricity generating plants in California -- that is causing them to produce as much nuclear-power electricity as they can.

Even though no nuclear power plants have come on line in the past twenty years, those same plants now produce more than 20 percent more electricity per annum than they did twenty years ago. Their 'capacity factors,' while not as high as the 90 percent of some plants in Europe, nevertheless now average a very, very respectable 80 percent. And as more and more U.S. nuclear power plants are acquired by independent owners and operators, we can expect that the U.S. norm will be nearer 90 percent than 80 percent. Since the cost of fuel for a nuclear plant is negligible, it doesn’t cost any more to run it at full capacity -- generating all the electricity it is capable of generating and generating it all the time -- than it does at idle. So the greater the capacity factor, the cheaper the electricity generated, and the price per kilowatt-hour that can be charged to your local public utility is not only less, but it is essentially independent of the price of natural gas in Siberia, oil in the Persian Gulf, or eggs in China.

As you can imagine, the confluence of the a) global warming, b) loose nukes, and c) deregulation 'drivers' has given Jimmy Carter (and Greenpeace) a severe pain in the tum-tum. And so, perhaps what President Bush should ask himself, is not "What would Jimmy Carter do?" Carter’s gone out to buy a roll of Tums. What President Bush needs to ask is, "What would Jimmy Carter absolutely refuse to do?" The answer is that Carter would never, ever allow, much less issue a Presidential Decision Directive allowing, the owners and operators of U.S. nuclear power plants to participate with the rest of the world in the MOX fuel cycle.

If President Bush decides to do something like that -- to free Massa Carter’s slaves -- it appears he may have a lot of support in Congress, perhaps from (maybe, especially from) the California delegation, representing -- as they will for the balance of their terms in office -- the land of the rolling blackouts.

Senator Pete Domenici (R-NM) introduced on March 7 with bipartisan support -- Lincoln (D-AR), Landrieu (D-LA), Murkowski (R-AK) and Thompson (R-TN) -- a bill (S.472) entitled "The Nuclear Energy Electricity Supply Assurance Act of 2001." Among its many important provisions is the requirement that the Secretary of Energy develop a "National Spent Nuclear Fuel Strategy." Domenici says that Congress urgently needs that strategy in order to determine "whether the spent fuel should be treated as waste, subject to permanent burial" (a la Jimmy Carter), or whether it "should be considered to be an energy resource that is needed to meet future energy requirements."

Senator Domenici has long been on record as believing Carter’s decision to forgo 'reprocessing' or 'recycling' of spent nuclear fuel was wrong. It looks like the time and the opportunity has finally come, twenty years later, for President Bush and Congress to reverse that decision. Maybe we won’t need the Yucca Mountain spent-fuel repository -- between Reno and Las Vegas in the Valley of the Tombs -- after all. Maybe Californians won’t have to come to Las Vegas and Reno to show their kids 'electric lights.' Maybe they can go, instead, to the Valley of the Tombs and show their wide-eyed kids where Carter proposed to bury all the dead pharaohs.

* * * * *

Physicist James Gordon Prather has served as a policy-implementing official for national security-related technical matters in the Federal Energy Agency, the Energy Research and Development Administration, the Department of Energy, the Office of the Secretary of Defense and the Department of the Army. Dr. Prather also served as legislative assistant for national security affairs to U.S. Sen. Henry Bellmon, R-OK -- ranking member of the Senate Budget Committee and member of the Senate Energy Committee and Appropriations Committee. Dr. Prather had earlier worked as a nuclear weapons physicist at Lawrence Livermore National Laboratory in California and Sandia National Laboratory in New Mexico.