Drop tank lawn ornaments would be cool!
Well, once again it seems that a brief history lesson is in order. Class! Sit up straight in your chairs and take notes! Young man! Is that gum in your mouth?
U.S. oil consumption was high in the early 1970’s, while U.S. oil production declined
In 1973, 36% of energy consumption was in foreign oil, while in 1970 it had been 22%
The Nixon administration was in office, the Watergate scandal was at its height in 1973, providing limited strength in policy formulation, and little potential for an effective response to the oil embargo
Arab-Israeli conflicts had already produced a growing tension between U.S. and Arab countries
The OPEC (Organization of Petroleum Exporting Countries) cartel led to rising gas prices in early 1970's
As many people will remember, 1973 brought widespread panic to the nation, with the onset of an international oil embargo. Middle Eastern countries,
wrought with long standing religious and political conflict, cut off exports of petroleum to many Western Nations, including the United States and the
Netherlands, in anger over their involvement in the Arab-Israeli conflicts. The resounding impact in the United States of this embargo was compounded
by weak national policies on energy issues, as well as generally high consumption levels and panic-stricken investors. Therefore, oil prices
skyrocketed, the term “Mideast Oil Crisis” was born, and the effects gained momentum. Lines at gas stations increased, and people were quick to blame
the government, the gas companies, the Arabs, and the embargo in general. Clearly though, many more forces were involved with the resulting “crisis” in the United States.
*Imports of oil to the U.S. dropped from 6 million in September 1973 to 5 million in subsequent months
*By December 1973, the price per barrel rose 130%
*Nov. 27, 1973 Nixon signed the Emergency Petroleum Allocation Act, embracing government regulation
*'Project Independence' was created in hopes of freeing the U.S. completely from foreign oil dependence by 1980
*The Federal Energy Office was created in December of 1973, as part of the Executive Office of the President, gaining responsibility over fuel allocation, rationing, prices, and 'Project Independence'
*The embargo itself lasted six months, ending on March 18, 1974
Ford assumes presidency in 1974 during a period of great tension surrounding Watergate
*The Federal Energy Administration was created in June of 1974
What Were The Causes?
Many people believe that consumption was the root cause of the energy crisis
The crisis was essentially one of control: the result of over-consumption on top of flawed energy policies.
U.S. policy flaws were recognized as a major cause of the crisis
The Arab oil embargo alone was not the cause
And the Effects...
U.S. attitudes toward the sources of energy changed drastically
Similarly, an incredible anxiety toward the supply of natural resources grew in the United States
Such national fear of the dependence on foreign oil resulted in the federal approval of the Trans-Alaska Pipeline in 1973, in order to capitalize on domestic oil
Prices for gas rose significantly, longer lines appeared at the filling stations, and fear of OPEC’s control over the economy grew quickly
Gas stations shut down because of shortages
Gas “eating” cars became undesirable, and many Americans turned to buy smaller European and Japanese cars
Carpooling and mass transit became popular topics
Cheap imported oil was recognized as vulnerable and oil in general was acknowledged as unrenewable
Market forces as well as government intervention resolved the crisis
People began to consider the causes of environmental degradation and not just the effects
Long term scarcity instilled questioning of resource exploitation
New Policies and Changing Ideas
Oil price decontrol became a central policy issue
A major debate was born, should the government control production and consumption or should the market forces take over?
Carter administration takes a new perspective and emphasizes deregulation of the energy idustry
Carter moved the nation to a greater understanding of energy problems
But foreign dependency on oil was still increasing, domestic production decreasing, and fuel costs were still high
1974 (after Nixon resigned) Congress passed the Geothermal Energy Research, Development and Demonstration Act , as well as the Solar Heating and Cooling Demonstration Act
Carter also passed the Solar Energy Research, Development, and Demonstration Act and Federal Non-Nuclear Energy Research and Development Act
National Energy Act was passed in 1978, including conservation incentives and taxes, and limits for the use of oil and gas in electrical generation
Natural Gas Policy Act passed soon after, giving the government a stronger role in regulation, and also raising prices of natural gas
Department of Energy created in 1977 to bring cabinet-level order to divided efforts
Carter suggests less driving, and less use of heat
Carter also called for a tax to help subsidize mass transit, and support energy assistance funds (Windfall Tax Act of 1980)
Now, do you understand better? Good. You can bet you @$$ there is a big test coming up soon!
http://cr.middlebury.edu/es/altenergylife/70's.htm
