Since the Oil embargo of 1973, American energy policy has been gripped by the politics of scarcity. We have been told, often in apocalyptic tones, that the country has an energy problem. We're running out of energy. Demand is outstripping supply. We're going to freeze in the dark.

The solution proposed time and time again has been to increase the supply. For years it made sense. Primary energy consumption rose in lockstep with the country's gross national product; it got to be an article of faith that economic vitality depended on increased energy supply. Demand for primary sources, such as oil and coal, and for more highly­-processed forms of energy, such as electricity, had to be met, however great.

Take the example of electricity, which now accounts for about 36percent of fuel burned in the United States. In the 1950s and 1960s it had been impossible to overestimate future demand, because electricity obeyed the Field of Dreams phenomenon: If you built a power plant, people would come to use it—irrigators, aluminum companies, airplane manufacturers. And thanks to the economics of scale, every time a new plant came on line the cost of electricity went down. Then about 1970 the energy order was jolted by a series of economic, political, and technical shocks. Plans to expand supply ran headlong into new environmental laws, rising interest rates, technical complications, the inflating cost of materials and labor. Increasing supply now meant increasing the price the customer paid; when the cost of a commodity went up, common sense made people look for ways to use less. Suddenly there were terrible penalties for overestimating demand: canceled plants, irate stockholders, even bankruptcy.

But old supply-side habits were deeply ingrained, and many people in government and industry were slow to perceive the changed landscape. Believing that energy use would double in the next 20 years—that it had to double lest our standard of living collapse—forecasters sketched out massive supply expansions. Bechtel, the engineering and construction giant, estimated in 1976 that the country would need 2,000 nuclear plants by the year 2000

The prospect of a nuke in every county, of vast tracts of wilderness opened for oil drilling and coal mining, of much of the nation's capital tied up in a building program, was staggering. Could we afford to pour more money into what was already the most capital-intensive industry in the country? Did it make sense to use tax money to subsidize schemes like the Synfuels Corporation and the breeder reactor? Already some prudent utilities were canceling nuclear projects as too expensive. (By 1984 they would have lost more than $20billion on abandoned nuclear plants alone.) Moreover, could we keep excluding from the cost of energy the damage we were causing to the environment—the salmon that died before the Columbia River dams, the growing danger of acid rain and global warming gasses?

Enter Amory Lovins. He was 28 years old and working as the British representative for Friends of the Earth, an environmental group started by David Brower. From his base in London, Lovins had been thinking about energy for five years; FOE had already published several of his books including World Energy Strategies and Non-nuclear Futures.

Drawing on the Ford Foundation's 1973 Zero Energy Growth scenario and the American Physical Society's thermodynamic end-use efficiency studies a year later, Lovins began questioning the assumptions of the supply doctrine. Would our standard of living really collapse if we used less energy? One study he found showed that Danes used more energy per capita for heating and cooking in 1500 than they did 400 years later. Had the Danes just regained the standard of living they'd enjoyed in the Middle Ages? Behind the numbers, concluded Lovins, lay the story of a technological shift from peat and wood to coal burned in more efficient stoves, and then to oil and electricity. The connection between energy supply and economic vitality was a fallacy: It didn't say anything about how the energy was used.

What did people want with energy, anyway? Lovins wondered. Was it barrels of oil and watts of electricity, or the services energy could provide: cold beer, hot showers, warm houses, light by which to scrutinize rising electric bills? You might say a fluorescent light bulb went off in his head. When he analyzed energy from the vantage of end use, the country didn't have an energy-supply problem, it had a badly-insulated-­house problem. It had a leaky-window problem. It had an inefficiently-­designed-refrigerator problem. America was using more energy than any other country in the world, but it was also wasting more energy than any country in the world. Far from preserving the country's economic future, Lovins was convinced that the program and ideology of the supply­-side scenarios might well jeopardize it.

In the spring of 1975 Lovins unholstered his calculator, a large, primitive forerunner of the one he has today. He added up the energy lost converting primary fuel to electricity (three units of fuel for every one unit of electricity) and the high costs and transmission losses incurred getting the power from the plants to faraway consumers (then 69 cents of every dollar on consumers' electric bills). He calculated the energy that wouldn't be needed if end users were more efficient. He sketched two curves: One showed energy use climbing drastically as the millenium approached. The other showed it rising as gently as an English moor and then sloping back. When America's energy "problem" was examined from the per­spective of how energy was being used—from the demand side, not the supply side—a cheaper and less risky solution seemed to be staring him in the face. And so the Soft Path emerged.