Oil Crises 70s: Background U.S. oil consumption was high in the early 1970s, while U.S.

oil production declined In 1973, 36% of energy consumption was in foreign oil, while in 1970 it had been 22% The Nixon administration was in office, the Watergate scandal was at its height in 1973, providing limited strength in policy formulation, and little potential for an effective response to the oil embargo Arab-Israeli conflicts had already produced a growing tension between U.S. and Arab countries The OPEC (Organization of Petroleum Exporting Countries) cartel led to rising gas prices in early 1970's What and When? The 1970s oil crisis knocked the wind out of the global economy and helped trigger a stock market crash, soaring inflation and high unemployment How and where? This was an oil crisis and was a major issue during the beginning period of the 1970's and it showed to the world how much America relied on foreign oil from other countries especially the Middle East. The conflict started when the Arab countries of the Middle Est were are war with Israel in the 60s and 70s. The Arab countries imposed an oil embargo on Neetherlands and USA due to their military supply to Israel against Arab Countries. The decision to boycott America and punish the west in response to support for Israel in the Yom Kippur war against Egypt led the price of crude to rise from $3 per barrel to $12 by 1974. The Conservative government, led by Ted Heath, was already struggling to cope with high food prices caused by global shortages. This fed into an inflation rate which, under Harold Wilson's Labour government, hit more than 24%. The result was devastating for the US economy, most of the Arab League countries decided to push the prices up for the US. A second increase to the prices occured again when the price went to eleven dollars which nearly doubled the orignial price that was orignally set. This sudden control over the Unitedt States by the Middle East casued a major economic blow to the USA.

Effects on Domestic Issues? Trade Unions claimed for higher wages to keep up with rising prices, which led confrontations with miners. Burmah Oil, a big name in the energy sector, had to
be rescued by the Bank of England after running into problems. But the wider oil industry in Britain was a notable winner at this time as money was poured into the North Sea on the back of high crude oil prices, allowing the UK to eventually become a net exporter. This period of high energy prices was not good for the country's already shaky manufacturing base. The gradual demise of the once highly important British-owned car industry was hastened by the extra costs of production. High oil prices also encouraged a switch to smaller vehicles and helped create the environment in which Japanese firms such as Toyota and Honda became dominant in the US and further afield. The oil price shock also changed the nature of British relations abroad, which had been more focused on the dangers posed by Russia and China as part of a cold war. The Middle Eastern countries had been seen up until 1973 as reliable friends, but the US and others in the west gave the region far more attention after the embargo, even though it remained in place for a relatively small amount of time. From then onwards particularly after the 1979 oil shock caused by the fall of the Shah in Iran US paid much more attention to those areas of the world that could provide stable and alternative oil and gas supplies such as Nigeria, Indonesia or the Gulf of Mexico. The early 70s also led to a resurgence of interest in other forms of energy such as solar, which gradually withered as the price of oil began to fall and US became less dependent on foreign imports. In addition, Britain's interest in alternative energy has been revived due to climate change and the need for a low-carbon economy. The current instability in the Middle East may finally bring a more lasting change to the way we work and live. NOTE: It is important to emphasize that the energy crisis in the United States cannot be explained simply as the result of the political alliances. The 1973 oil crisis did not wholly cause the energy crisis, though it is important to understand its impact and its catalyzing component. Actually, many sources emphasize that the actual crisis in the United States stemmed more from our own domestic political and social circumstances than any single event that might have occurred overseas.

Facts And Statistics From The Embargo Years

Imports of oil to the U.S. dropped from 6 million in September 1973 to 5 million in subsequent months By December 1973, the price per barrel rose 130% Nov. 27, 1973 Nixon signed the Emergency Petroleum Allocation Act, embracing government regulation 'Project Independence' was created in hopes of freeing the U.S. completely from foreign oil dependence by 1980 The Federal Energy Office was created in December of 1973, as part of the Executive Office of the President, gaining responsibility over fuel allocation, rationing, prices, and 'Project Independence' The embargo itself lasted six months, ending on March 18, 1974 Ford assumes presidency in 1974 during a period of great tension surrounding Watergate The Federal Energy Administration was created in June of 1974 CONCLUSION: (TAKEN FROM WEBSIDE, JUST COPY/PASTE IN GOOGLE TO KNOW WHICH ONE IS THE WEBSITE!)

What Were The Causes?

Many people believe that consumption was the root cause of the energy crisis The crisis was essentially one of control: the result of overconsumption on top of flawed energy policies. U.S. policy flaws were recognized as a major cause of the crisis The Arab oil embargo alone was not the cause

And the Effects...

U.S. attitudes toward the sources of energy changed drastically Similarly, an incredible anxiety toward the supply of natural resources grew in the United States Such national fear of the dependence on foreign oil resulted in the federal approval of the Trans-Alaska Pipeline in 1973, in order to capitalize on domestic oil

Prices for gas rose significantly, longer lines appeared at the filling stations, and fear of OPECs control over the economy grew quickly Gas stations shut down because of shortages Gas eating cars became undesirable, and many Americans turned to buy smaller European and Japanese cars Carpooling and mass transit became popular topics Cheap imported oil was recognized as vulnerable and oil in general was acknowledged as unrenewable Market forces as well as government intervention resolved the crisis People began to consider the causes of environmental degradation and not just the effects Long term scarcity instilled questioning of resource exploitation

New Policies and Changing Ideas

Oil price decontrol became a central policy issue A major debate was born, should the government control production and consumption or should the market forces take over? Carter administration takes a new perspective and emphasizes deregulation of the energy idustry Carter moved the nation to a greater understanding of energy problems But foreign dependency on oil was still increasing, domestic production decreasing, and fuel costs were still high 1974 (after Nixon resigned) Congress passed the Geothermal Energy Research, Development and Demonstration Act , as well as the Solar Heating and Cooling Demonstration Act

Carter also passed the Solar Energy Research, Development, and Demonstration Act and Federal Non-Nuclear Energy Research and Development Act National Energy Act was passed in 1978, including conservation incentives and taxes, and limits for the use of oil and gas in electrical generation Natural Gas Policy Act passed soon after, giving the government a stronger role in regulation, and also raising prices of natural gas Department of Energy created in 1977 to bring cabinet-level order to divided efforts Carter suggests less driving, and less use of heat Carter also called for a tax to help subsidize mass transit, and support energy assistance funds (Windfall Tax Act of 1980)

The Move Towards Alternative Energy Sources

The importance of funding research and experimentation became clear Tax incentives developed under the Carter administration MORE AWARENESS AND EXPLORATION OF ALTERNATIVES o solar energy (commercial, solar thermal conversion, photovoltaic cells) o wind power o tidal power o ocean thermal conversion o biomass o geothermal energy o conversion of coal into gas o extraction of oil from tar sands

efforts at tertiary recovery from oil deposits Debates grew over the technical feasibility and economic viability of these new alternative energy sources
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JAUME REMEMBER TO PUT BIBLIOGRAPHY AT THE END AND CREDITS! http://www.guardian.co.uk/environment/2011/mar/0 3/1970s-oil-price-shock http://sun.menloschool.org/~nfortman/8th/decadesw eb.2003/mikeyh/ http://cr.middlebury.edu/es/altenergylife/70's.htm