69
the finances of the airline and trucking industries. Electrical power plants using fuel
oil to generate electricity saw costs go through the roof. Many of these were hastily
converted over to natural gas or coal, leading to shortages of those commodities and
causing additional price hikes.
The inter-dependence of energy resources in the United States and the seemingly
never-ending shortages and supply uncertainties on every kind of energy at almost
every level is why the OPEC embargo was not just about oil, but actually resulted in
a full-blown “energy crisis.” This trauma has caused repercussions in American
politics and policies ever since. Even though domestic energy supplies in the United
States are now adequate and stable, and have been for a decade, fears about the use
of oil as a weapon, the desire to protect foreign oil fields and tanker transport routes,
and the prospect of crippling energy shortages are still interwoven throughout the
American psyche and continue to influence government policy. The U.S. Congress
acted in 1975 to ban oil exports from the United States to retain as much domestic
oil within the country as possible. This ban remained in effect for 40 years until it
was lifted in 2015.
A second, smaller oil shortage occurred in 1979, when Iranian petroleum production was disrupted for several months by the shutdowns and disarray associated
with the Islamic revolution. The 1979 crisis was less severe in the United States than
the OPEC embargo because only a relatively small amount of U.S. oil imports came
from Iran, and Saudi Arabia and other exporting nations were able to quickly make
up the shortages.
The 1970s were a watershed decade for energy in America. The nation began the
decade blissfully unaware of any potential problems in the energy supply chain. It
entered the 1980s wondering if the transportation of the future might be steampowered buses fueled by wood. The modern controversy over fracking and the use
of fossil fuels cannot be understood without understanding the energy shortages of
the 1970s. The development of shale gas and tight oil were a direct response to the
OPEC oil embargo and the resulting critical shortage of domestic energy caused by
America’s dependence on imports. The fact that this effort took 30 years to bear
fruit is beside the point. The complex inter-relationships between oil, money, power,
and politics that resulted in the 1970s energy crisis were explored in a book by
Daniel Yergin (1991). It is recommended for further reading.
4.3 The Unconventional Solution
After the OPEC embargo officially ended in March of 1974, the U.S. government
responded with a number of actions that were designed to reduce American dependence on oil imports. The three factors that affect energy: technology, economics,
and policy made some solutions more feasible than others (Soeder and Borglum
2019). Because of the panic at the time, the government tried nearly everything,
including a few things that might have been better left untested. Success was eventually achieved with some of the new technologies, including the practical
4.3 The Unconventional Solution
the finances of the airline and trucking industries. Electrical power plants using fuel
oil to generate electricity saw costs go through the roof. Many of these were hastily
converted over to natural gas or coal, leading to shortages of those commodities and
causing additional price hikes.
The inter-dependence of energy resources in the United States and the seemingly
never-ending shortages and supply uncertainties on every kind of energy at almost
every level is why the OPEC embargo was not just about oil, but actually resulted in
a full-blown “energy crisis.” This trauma has caused repercussions in American
politics and policies ever since. Even though domestic energy supplies in the United
States are now adequate and stable, and have been for a decade, fears about the use
of oil as a weapon, the desire to protect foreign oil fields and tanker transport routes,
and the prospect of crippling energy shortages are still interwoven throughout the
American psyche and continue to influence government policy. The U.S. Congress
acted in 1975 to ban oil exports from the United States to retain as much domestic
oil within the country as possible. This ban remained in effect for 40 years until it
was lifted in 2015.
A second, smaller oil shortage occurred in 1979, when Iranian petroleum production was disrupted for several months by the shutdowns and disarray associated
with the Islamic revolution. The 1979 crisis was less severe in the United States than
the OPEC embargo because only a relatively small amount of U.S. oil imports came
from Iran, and Saudi Arabia and other exporting nations were able to quickly make
up the shortages.
The 1970s were a watershed decade for energy in America. The nation began the
decade blissfully unaware of any potential problems in the energy supply chain. It
entered the 1980s wondering if the transportation of the future might be steampowered buses fueled by wood. The modern controversy over fracking and the use
of fossil fuels cannot be understood without understanding the energy shortages of
the 1970s. The development of shale gas and tight oil were a direct response to the
OPEC oil embargo and the resulting critical shortage of domestic energy caused by
America’s dependence on imports. The fact that this effort took 30 years to bear
fruit is beside the point. The complex inter-relationships between oil, money, power,
and politics that resulted in the 1970s energy crisis were explored in a book by
Daniel Yergin (1991). It is recommended for further reading.
4.3 The Unconventional Solution
After the OPEC embargo officially ended in March of 1974, the U.S. government
responded with a number of actions that were designed to reduce American dependence on oil imports. The three factors that affect energy: technology, economics,
and policy made some solutions more feasible than others (Soeder and Borglum
2019). Because of the panic at the time, the government tried nearly everything,
including a few things that might have been better left untested. Success was eventually achieved with some of the new technologies, including the practical
4.3 The Unconventional Solution