IN THE NEWS / 25 Years After Embargo, Oil Plentiful; Then and Now
Omaha World-Herald
Twenty-five years ago, Arab countries around the Persian Gulf started an oil embargo that shattered Americans' complacency over the security of their energy supply.
The artificial oil shortage that began on Oct. 18, 1973, led to six months of agonizing and improvising by government officials and drivers desperate to find a service station that still had gas.
Over the next quarter-century, the federal government spent more than $ 90 billion looking for ways to reduce our reliance on foreign oil.
Today, overproduction and faltering demand from developing countries has created a worldwide glut of oil. Half the oil consumed in the United States - or roughly one-fifth of the nation's total energy supply - is imported from Mexico, Canada and other foreign lands.
"Many Americans have apparently forgotten about that crisis of 25 years ago," said Cecile Warner, who has not. An engineer who directs the federal Center for Renewable Energy Resources in Golden, Colo., she designed, built and lives in "a passive solar home that uses less than one-third of the energy of a home built to today's standards."
New energy efficiencies have cut petroleum use per person. But expensive efforts to develop clean, non-nuclear alternatives to fossil fuels have failed to come up with a product cheap enough to compete with deregulated oil and natural gas.
"More than half our oil now is imported, compared to only a little more than one-third before the embargo, and that figure is expected to rise to about two-thirds by 2020," Ms. Warner cautioned. "Average vehicle miles per gallon are decreasing because of the popularity of sport-utility vehicles."
Still, today's SUVs and other light trucks average more than 20 miles per gallon - while the average car or pickup of 1973 burned up a gallon every 14 miles.
That may be one reason why few Americans even noticed the three price-propping production cutbacks announced in the past 10 months by the the Arab and non-Arab countries in the Organization of Petroleum Exporting Countries.
OPEC's first two cutbacks flopped. The third, announced in June, might be taking hold. After sliding from $ 25 a barrel in October 1996 to less than $ 14 in August, the world price for crude oil has bobbed up to around $ 16 in the past two months. The $ 2 jump translates to about a nickel a gallon.
But the 1973 embargo was another story. The Saudis announced that if the United States continued supporting Israel militarily, it wouldn't be allowed to buy Arab oil.
That threat was issued just one day after 11 Arab nations agreed in Kuwait City to raise the charge for their oil by 17 percent and prop up the new price by cutting their production by 5 percent each month.
Defying the economic and political threat, the United States continued to resupply the Israelis as they drove back the Soviet- supplied armies of Syria and Egypt, which had invaded Israel earlier in the month on the solemn Jewish holy day of Yom Kippur.
Public confidence in American leaders was sinking that month, as Vice President Spiro Agnew was forced to resign and President Richard Nixon ordered the firing of the Watergate special prosecutor. In addition, an elaborate system of price and wage controls had failed to prevent heating-oil shortages the previous winter and disruptions of the gasoline supply that summer.
"I recall consumers following our delivery trucks and when the truck arrived at the station, it would be trailing a ready-made line of cars waiting for gas," said Leo Liebowitz, president and CEO of [ Getty Oil ], an independent oil marketer in New York.
At the embargo's peak, crude oil imports dropped by 17 percent. The 38-cent average price for gasoline jumped to 54 cents.
Millions of Americans heeded President Nixon's pleas to turn down their home and office thermostats to 68 degrees.
Airlines conserved jet fuel by packing more passengers onto fewer flights. They overbooked so heavily that when consumer advocate Ralph Nader was bumped, a federal district judge ordered the airline to pay him $ 25,100.
The big neon signs in front of motels blinked off. Mr. Nixon parked Air Force One and caught a commercial flight to his home in California. That year, the lights on the national Christmas tree erected outside the White House each December were kept turned off.
Oil prices stayed up, and Israel reached a truce with Syria and Egypt. Missions accomplished, the Arabs halted their embargo in March 1974.
But many older Americans still suspect it was all a hoax.
"Nobody knew what was going on," recalled Lee Ramsnyder, who operated the Lan-Mar Marina on Georgia's Lake Lanier. "I remember hearing there was a secret supply in Louisiana or someplace like that.
"We pumped most of our gas to boaters on weekends, and we kept running out by Sunday afternoon," he said. "I think maybe a lot of it was done by the government to pull us out of a little recession by making people back up a bit on fuel use and dig in."
Today, Mr. Ramsnyder rebuilds used tour buses, installs luxuries ranging from stoves and showers to trash compactors, and then sells the vehicles to entertainers and other travelers who don't care that they only get about 8 miles to the gallon.
Then and Now
Changes since the 1973 Arab oil embargo include:
Imports, 28 percent of total U.S. oil consumption in 1973, have risen to 48 percent.
OPEC members, which supplied 54 percent of the world's crude oil, now provide 43 percent.
Inflation-adjusted retail prices have rise 6.5 percent for gasoline and 7 percent for electricity.
The inflation-adjusted price paid by refinrs for crude oil has risen by 58 percent.
U.S. consumption of petroleum is up 13 percent, though the growing population means that on a per-person basis, it is down by 14 percent.
The average car then got 14 miles per gallon, compared to today's 28.5 miles per gallon for a car and 20.4 miles per gallon for light trucks-including minivans, SUVs and small pickups.
Today's average care or light truck has 25 percent more horsepower than its equivalent in 1973.
While U.S. energy consumption has increased by 27 percent since the embargo, energy use has grown so much faster in other countries that the U.S. share of the world's energy consumption has dropped from 31 percent in 1973 to 25 percent today.
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