By Brian D. Lipton
American Jewish Council,
West Coast of Florida
A lot has changed in 40 years.
It was October 1973 when OPEC (Organization of the Petroleum Exporting Countries), made up primarily of Arab oil-producing states, shut off the supply of oil to the United States. This was in retaliation for American support for Israel in defeating the invading armies of Egypt and Syria in the 1973 Yom Kippur War.
While the embargo itself lasted just a few months, OPEC’s evident chokehold on our oil generated shock waves through the American economy that had long-lasting effects. Given the scarcity of energy alternatives, the oil shortage brought a spike in fuel costs, and since the price of fuel is factored into every product, inflation and interest rates soared. Gasoline rationing was instituted on an even-odd-day schedule with limits on how many gallons one could purchase, and the long lines at gas stations—though providing much material for the late-night comedians of that era—was no laughing matter.
The economy slowed and no one seemed to know what to do about it, while Arab sheiks seemed poised to wield the oil weapon to influence American foreign policy and threaten our country’s leadership role in the world. American morale took a serious hit. President Jimmy Carter said in a televised 1979 speech, “the true problems of our nation are much deeper — deeper than gasoline lines or energy shortages, deeper even than inflation or recession.” And as American Jews of middle age or older will remember, the fear that Israel — and Jews — might be scapegoated for the oil shortage was palpable. Every president from Richard Nixon on talked about the need to reduce our dependence on foreign oil, but the economic recovery of the 1980s alleviated the sense of urgency and little was accomplished.
Fast-forward to today. While we once again cope with economic downturn and our stalemated political system seems incapable of effective action, energy supply is decidedly not the problem. As energy sources have become far more diversified and plentiful, mention of the once-dreaded OPEC now barely draws a yawn. Our use of coal, natural gas, wind, solar and atomic power has grown at a far higher rate than petroleum, even as North American oil production has risen dramatically. Technological breakthroughs have opened up new supplies of shale gas. The resulting increased energy supply has meant lower prices, helping tame inflationary pressures. The United States is no longer the world’s largest importer of petroleum — China is — and American oil exports are on the rise.
Progress has also been notable on the demand side. Businesses and the general public have become more conscious of the need for energy conservation. Federally mandated fuel-efficiency standards for cars and trucks have drastically reduced energy consumption while at the same time reducing air pollution. Government incentives have helped make vehicles powered by alternative fuels and new technologies affordable and available to the public.
Even though much of the developing world still relies on Middle East oil, and so the possibility of cutoffs of supply from the Persian Gulf must be taken seriously, the geopolitical benefits of our enhanced energy posture have been striking. The oil-producing states no longer have us “over a barrel.” The disruption of supplies from countries in turmoil, such as Iraq and Libya, have caused barely a blip on the global oil markets, and the international sanctions placed on the purchase of Iranian oil are working because the world is not as reliant as it used to be on that country’s vast reserves.
To move further along the road to energy independence we must continue to develop both our domestic oil production and alternative fuels, while at the same time raising fuel-efficiency standards ever higher.
And while we’re at it, why not explore whether there are any lessons from our forty-year energy turnaround that might help address our current economic woes?