Petroleum Demand Lessons from the Late 1970s
Posted by Gail the Actuary on March 19, 2010 - 9:36am
This is a guest post by Kevin Rietmann, known as KLR on The Oil Drum.
A collapse in demand for petroleum products happened in the late 1970s and early 1980s. JD, proprietor of the blog Peak Oil Debunked, examined this briefly in this 2007 post about what he termed ”The Big Glitch”:
So what really does happen when global oil production drops by 15%? Well, it turns out we know the answer to that one because it actually happened once before, in the early 1980's. Production hit a high of 66mbd in 1979, and over the course of 4 years dropped by 14% to 56.6mbd in 1983. In fact, oil production didn't surpass the 1979 high until 1993, 14 years later.
So what did the world look like in 1983, after oil production had collapsed by 15%? I'll tell you what. Go out to your local freeway, and look at it during rush hour, when it's totally crammed with cars. That's exactly what 1983 looked like. I was gassing up as usual, totally oblivious. The "crisis" had such a minor impact on daily life, that I didn't even realize anything out of the ordinary was happening, let alone a liquid fuels armageddon that was wholly shattering the oil dependent economy and reducing the citizenry to poverty. I could be wrong about this, but I'm pretty sure that no one was forced by starvation to eat their Flock of Seagulls albums.
As it happens, demand for petroleum has gone down in the wake of JD's rant; how does it compare to the shortfall of 3 decades ago? This post will examine what happened in the late 70s to demand for the various petroleum products, and compare their rate of downturn to what has transpired since their corresponding recent peaks. This will be about US demand, using EIA data, as it is by far the most comprehensive to be had. The general situation in other regions of the world will be covered briefly at the end.....
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