What have we learned in the 40 years since the OPEC oil embargo?

In 1974, during the oil embargo, cars in Southern California line up for gas at a Union 76 station.

LAPL/ Security Pacific National Bank Collection

In 1974, during the oil embargo, cars in Southern California line up for gas at a Union 76 station.

Forty years ago, Egypt crossed the Suez Canal to begin a war that killed some 27,000 people and left the nation of Israel fighting for its life. When it was over, after much U.S. support, Israel had won. But the effects of the war are still being felt in America and elsewhere.

The key effect was the first so-called OPEC oil embargo, an act of vengeance aimed at the U.S. and its allies for supporting Israel. Its short-term results were the indignity of gas-station lines, improvised alternate-day rationing and even the banning of Christmas lights (in Oregon).

But in the long run, the embargo did us a lot of good. It helped Americans change the way they thought about petroleum and the automobile.

Since the days of the Model T Ford, most U.S. citizens had assumed that cheap gas was an entitlement, like rain and sunshine. In the '50s and '60s, Americans paid little more for a gallon of gas than did the Okies in the "Grapes of Wrath." 

Adjusting for inflation, they paid even less. Only by now they were driving cars weighing up to two and a half tons that got as little as 8 miles per gallon; cars you could fill up then for what a gallon of gas costs now. But by 1974, gas prices were going up by over 50 percent, and then soaring toward the unimaginable heights of nearly a dollar a gallon and far, far more.

High gas prices left the big V-8 gas hogs rusting in dealers’ lots while customers scrambled for the little cars that had fallen out of favor. Commuter trains and buses were jammed. Ocean-going passenger ships — with their huge appetite for fuel oil that had gone from pennies to more than 60 cents a gallon — went to the scrap yard.

Paranoid Americans accused the oil companies of hoarding oil, of undue speculation. But what they were seeing was just the predictable effects of deep production cuts driving up long-depressed prices. In fact, the Persian Gulf states that then constituted the OPEC  members’ majority had a point. 

They had been charging  a low price for oil for decades, while the prices for what they bought with their oil profits had tripled. Even the staunch U.S. ally the Shah of Iran suggested that it was time for crude oil prices to rise by 1,000 percrnt.  He didn’t live to see it, but those prices did rise 10-fold and then some. 

After that, Americans learned to get along without unlimited cheap gas.

The idea that natural resources were limited was by no means new then — conservationists had predicted oil shortages for decades, and the Club of Rome had just published its famous warning treatise, “The Limits to Growth.”  But in proving that oil resources are finite, those warnings paled next to the real life lesson of waiting in line at a gas station.

Car sizes went down, mileage went up.

Despite four Republican presidents and many new petroleum discoveries, U.S. gasoline consumption peaked six years ago, proving that we’ve learned we can do with less. And we owe it all to a nasty little war of 40 years ago that most of us have somehow forgotten.

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