As the embargo was enacted, the price of oil skyrocketed due to the decreased supply and ever-present demand. Prices were soon quadruple what they used to be after just three months of the embargo, and with the devaluation of the dollar, things looked bleak for the American economy. Lines formed at gas stations all over the country and political leaders called for measures to conserve energy and gas, such as closing gas stations all over the country and asking that people did not put up Christmas lights in their houses. The automotive industry also suffered greatly and lost business to Japan, which was producing smaller and more fuel-efficient cars. Even after the embargo was lifted in 1974, oil prices retained their previous high levels. The effects of the energy crisis remained throughout the 70s in the form of price controls, gasoline rationing, and even a national speed limit until 1975.
The environmental movement gained strength during this period, and for the first time it became an influential force in Washington guiding policymaking. This led to legislation such as the Emergency Petroleum Allocation Act, which was meant to “ensure equitable distribution of available products, to establish equitable prices, and to preserve the independent segments of the oil industry,” passed in response to the panic at the time. Congress also passed the Energy Policy and Conservation Act of 1975 and created the Department of Energy in 1977, two steps that would allow more focus on the growing issue of America’s energy sources. Efforts to increase the use of more environmentally friendly sources of power and reduce America’s dependence on fossil fuels characterized the movement, as well as efforts to stimulate domestic oil production through Project Independence. A product of the Nixon administration, the project not only emphasized the importance of domestic energy production, but also promoted a union among America’s allies that would attempt to keep oil prices stable for the consumers. Within a decade, however, the progress was lost as oil prices took a sharp decrease in the 1980s and Americans increasingly purchased affordable foreign oil. Even today, American dependence on foreign oil remains high, and there is no shortage of economic troubles related to oil producers’ manipulation of the market.
sources:
http://cr.middlebury.edu/es/altenergylife/70's.htm
http://www.history.com/topics/energy-crisis
https://history.state.gov/milestones/1969-1976/oil-embargo
http://www.eia.gov/pub/oil_gas/petroleum/analysis_publications/chronology/petroleumchronology2000.htm#T_3_
It is interesting that people only began to search for environmental solutions after the problems emerged. In this case, Americans began to search for alternatives for energy only after they were lacking in oil resources. It is interesting to see this pattern repeat itself throughout history. The same pattern can be seen in the Civil Rights Movement where people only began to try to solve the problem after racial tensions were skyrocketing. If there was no oil crisis, how would the pace of the environmental movement change?
ReplyDeleteIt is interesting that there was a shift in power from America to those that it depended on. So much of American policy up until this point has revolved around isolationism and an intense sense of nationalism. I wonder how this dependance upon other countries effected American nationalism and people's sense of national identity?
ReplyDeleteDidn't the OPEC restrictions harm the global economy, not just America's? I wonder why OPEC countries believed that the embargo was a good idea, especially since consumption would be forced down and prices would be eventually forced to adjust as a result. I think that OPEC, even today, holds a little too much political power that they can exert by changing oil prices, but I'm still surprised that the member countries would have agreed to such drastic measures to oppose Israel.
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