Can History Repeat Itself As U.S. Faces 25th Anniversary Of OPEC Oil Embargo?

Release Date: Thursday, October 15, 1998

Alliance To Save Energy Notes Ominous Similarities

Washington, DC, October 15-"The United States seems to have forgotten the lessons it learned 25 years ago when the Organization of Petroleum Exporting Countries (OPEC) strangled the U.S. economy with an oil embargo," notes Alliance to Save Energy President David M. Nemtzow, who points out ominous similarities between the current conditions and those that surrounded the oil embargo 25 years ago.

These similarities include:

  • Artificially low energy prices
  • Growing fleet of gas guzzling vehicles
  • Increasing dependence on foreign oil imports
  • International economic instability
  • Complacency about the need for reducing energy use

"Americans are acting like an energy crisis could never happen again," Nemtzow says. "We are backsliding in our attitude toward energy at the same time utility companies have decimated efficiency programs and education, which could lead to the rug being pulled out from under our feet once again."

"Today there's no need to put on a cardigan, reduce the temperature, or be uncomfortable," Nemtzow continues. "Today's smart, energy-efficient technologies and products save consumers money, increase their comfort, and decrease pollution — without sacrifice and deprivation."

More importantly, energy efficiency provides painless, cost-effective insurance against the sort of unforeseeable events that shocked and crippled the United States 25 years ago. Energy efficiency can cut home utility bills by 30 percent while also reducing energy use, air pollution, and greenhouse gas emissions.

Closer Look at the Similarities

Artificially low energy prices: In 1973, oil prices were stable and low. The oil embargo sent prices skyrocketing and sent the U.S. economy into shock. Looking at constant dollars, today's oil prices are even lower than they were in 1973. These low prices are inaccurately sending a signal to Americans that energy is plentiful and that the need for reducing energy use is a thing of the past.

Growing fleet of gas guzzling vehicles: In 1973, gas mileage was the last thing on a car-buyer's mind. Soaring gasoline prices changed that, and for nearly 20 years, the average fuel efficiency of American cars steadily increased. Low gasoline prices and the surging popularity of low-fuel-mileage sport utility vehicles (SUVs) and light trucks have wiped out those gains. The automobile industry has remained stagnant since 1992 - making few energy-efficiency improvements, when it could easily have been producing more efficient SUVs.

Increasing dependence on oil imports: In response to the energy crisis of the 1970s, the United States reduced its oil imports to 32.2 percent of the oil it consumed. However, imports are on the rise again and today we import more oil than we produce. Our oil import bill in 1997 was $71.2 billion - and is climbing every year.

International economic instability: Economic instability breeds political instability, as can be seen in Russia and some Asian countries. Political unrest can play havoc with energy supplies.

Complacency about the need for reducing energy use and/or energy efficiency: In 1973, Americans were oblivious to the repercussions of excessive energy use. However, since the energy crisis, the United States has saved 419.6 quads of energy - enough energy to power the entire U.S. economy for almost five years. In addition, investments in energy efficiency and renewable energy have avoided the emission of approximately 8 billion tons of carbon alone.

"Without further development of energy-efficiency technologies and products, the United States will miss an opportunity to increase its energy productivity and to give itself a cushion should events take an unexpected turn - just as they did 25 years ago," Nemtzow concludes.