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40 Years after OPEC Oil Embargo, U.S. May Finally Get Off Imported Crude

The views expressed are those of the author and are not necessarily those of Scientific American.


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So you think President Barack Obama’s calls for energy independence have seemed a bit starry-eyed? Well, every U.S. president since Richard Nixon has publicly called for the country to become self-sufficient. Why? Because of oil. Specifically, oil imported from Middle Eastern nations of the Organization of the Petroleum Exporting Countries (OPEC).

The ongoing chorus stems from a shocking event in October 1973 that remains large in the mind of anyone who was alive then: the Arab Oil Embargo. Yet America may only now be heeding the embargo’s lesson. The U.S. still gets about the same amount of energy from oil as it did 40 years ago, but imported crude may finally be doomed because of a steep increase in domestic production of oil and natural gas, courtesy of hydraulic fracturing. Yes, fracking.

Quickly, here’s how the embargo popped, according to a Wikipedia timeline that has been thoroughly vetted:

Oct. 16, 1973 – Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait and Qatar unilaterally raise oil export prices by 17 percent, to $3.65 per barrel, and announce production cuts.

Oct. 17 – Arab oil ministers within OPEC agree to use oil as a weapon to influence the West’s support of Israel in the Yom Kippur war.

Oct. 19 – President Richard Nixon asks Congress to appropriate $2.2 billion in emergency aid to Israel. Libya immediately proclaims an embargo on oil exports to the U.S. Saudi Arabia and other Arab oil producing states follow suit the next day.

Oct. 26 – The Yom Kippur War ends.

Nov. 5 – Arab producers announce a 25 percent output cut.

As a result of the turmoil, on Feb. 11, 1974, Nixon and U.S. Secretary of State Henry Kissinger unveiled Project Independence, a plan to make the nation energy self-sufficient by 1980, primarily by improving energy efficiency and increasing use of “alternative energy sources” such as hydroelectricity. But the enthusiasm faded as prices slowly eased. In 1979, when a second oil crisis occurred, President Jimmy Carter again called for efficiency improvements, conservation and alternative energy, but subsequent action also waned.

The same cycle has occurred again and again: rising energy costs in the mid-1980s, which did lead to tougher Corporate Average Fuel Economy (CAFÉ) standards to improve the gas mileage of cars but didn’t reduce dependence on foreign oil; after the early 1990s recession and the Gulf War in the Middle East (driven by our oil dependence there); and even in 2008, when gasoline prices soared to $4 a gallon, crude hit $140 a barrel, and every company and media outlet touted “green” everything to solve America’s energy woes.

The net effect? In 1973 the U.S. consumed 34.8 quadrillion Btus of oil energy, and in 2013 it is projected to consumer 34.2 quadrillion Btus, according to the U.S. Energy Information Administration (EIA). Although oil burned at power plants has dropped to less than 10 percent of what was used in 1973, demand grew during the four decades since, driven by many, many more vehicles. Oil’s share of the nation’s overall energy mix had dropped from 46 percent to 36 percent, but net imports (imports minus exports) are still substantial: they were 30 percent in 1973, rose to a high of 60 percent in 2005, and quickly came down to about 40 percent in 2012. The recent drop has mostly be due to more domestic production of oil thanks to hydraulic fracturing, and more replacement of oil for power and heating by natural gas, also booming because of fracking.

Unlike past attempts to get off foreign oil, the current push might actually succeed, according to Jack Rafuse, principal of Rafuse Consulting in Washington, D.C., who was the White House Energy Adviser to Nixon during the 1973 embargo. “We really are in a different position to finally break the cycle, because of the rapid increase in shale oil and shale gas.” That is, fracking unconventional deposits of both fossil fuels.

Oil demand has decreased across the past five years because of the new wave of steep CAFÉ increases put into effect by the Obama Administration. Under the regulations, gas mileage will continue to rise significantly through 2025. Furthermore, natural gas should continue to replace oil in power plants and home heating, while oil fuels transportation. Indeed, the EIA has stated that shale gas and shale oil could make the U.S. energy independent by 2030. This time, Rafuse says, the driver is supply and demand economics, not policy or presidential decrees. The one political move that would help the changeover, he notes, “is an end to bans like the one New York State has on fracking.” Needless to say, environmental concerns may not provide such smooth sailing.

The U.S. has never experienced such a large and immediate cutoff in foreign oil supply as it did in 1973, and has never seen as much consumer chaos and long gasoline lines as it did after the second crisis in 1979. But the attempts to wean the country off imported oil have never stuck. Maybe the current trend will. Given that, improvements in energy efficiency might be the greatest legacy of the 1973 embargo. According to Sun Day Campaign, a research and educational organization that promotes sustainable energy, U.S. energy consumption has increased by 28 percent, from 75.6 quads in 1973 to about 97 quads in 2013, yet population grew by 50 percent and the nation’s gross domestic product grew more than 250 percent. In a press release, Sun attributes the greater leverage to legislation, regulations and technological advances related to energy efficiency, as well as consumer efforts to conserve.

So at least we learned something.

 

Image credit: © Henrik Jonsson Graphic Design

Mark Fischetti About the Author: Mark Fischetti is a senior editor at Scientific American who covers energy, environment and sustainability issues. Follow on Twitter @markfischetti.

The views expressed are those of the author and are not necessarily those of Scientific American.





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  1. 1. jerryd 2:47 pm 10/16/2013

    Interesting not a mention of ethanol that cuts imports by 20%!! That is not small.

    Plus not the greater effect of better mileage than stated.

    The sad fact is I drive lightweight stronger than steel composite body/chassis EV Sportwagon getting 250mpg equivalent using old forklift EV drive tech, in fact no tech after 1970, most from the 50′s and earlier, that this hasn’t happened already.

    The problem with the tight oil driving this is the wells only produce 2 yrs, dropping to 10% in 5-6 yrs. So one must redrill the same number more wells every 5-8 yrs just to keep production level.

    And the EROI and ROI is bad, 3-1, just on the edge of investing for such risky assets. And costs are rising for materials, labor to drill new wells with such short lives making the not worth it anymore fairly close. Then no more oil whether there is any or not as just too expensive to produce.

    That jumping the shark starts at about $7/gal US will push everyone to alternative fuels/drives from EV, ethanol, syn fuels, NG, biomethane, RE, etc. because all these are cheaper than $4/gal equivalent.

    Thus the end of the oil era begins.

    Link to this
  2. 2. sault 5:56 pm 10/16/2013

    We should save as much of this domestic “tight oil” as we can through efficiency measures so we can have a sizeable reserve for future generations. Rushing like mad to exploit it looks good for short-term corporate profits, but oil is too versatile a feedstock to waste burning most of it. We also have to realize that the majority of fossil fuel reserves will need to stay in the ground for us to meet carbon emissions targets and keep us from throwing the climate completely out of whack.

    What most people don’t realize is that just the electricity and natural gas used in oil refining in the USA could power around 60 million electric vehicles instead. With electric vehicle range increasing and charging stations popping up all over the place, plugging in will increasingly replace filling up with fuel. And the storage capacity of millions of electric vehicles can provide GWhs of storage for the 23 hours a day they are parked and not in use. This level of storage will enable a quicker transition to renewable energy and a more sustainable economy.

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  3. 3. sofistek 6:42 pm 10/16/2013

    Hmm. Another starry-eyed claim of oil independence.

    Natural gas production has stalled for the last 18 months. Fracking results in high decline rates and expensive product. Some of the oil dependency has also been exported in the form of jobs.

    A growing economy (if that ever happens again) needs growing amounts of energy, including oil energy (and oil as a feedstock), ultimately. You can’t sweep the problems under the carpet just because of a brief flurry with expensive unconventional oil and natural gas.

    And this is a senior editor who covers sustainability issues. One would think he’d have a reasonable grasp of sustainable resource use. Seems not.

    Link to this
  4. 4. Energycheck 9:27 pm 10/17/2013

    We will have excess gas but continue to import oil. Fracking with natural gas works because high-pressure natural gas wants to get out if given a crack to escape to a well. Gas fracking technical advances have lowered the cost of natural gas. Fracking with oil is much less productive because most oil is held in place by capallary forces. Most of it does not want to move. The increase in U.S. oil production is primarly because the price of oil is above $100/barrel making it profitable to go after oil. If it drops to $70/barrel, production will drop rapidly.

    Link to this
  5. 5. bucketofsquid 2:17 pm 10/18/2013

    @jerryd – Ethanol as currently produced in the USA burns more energy than it produces. That can change as new ways to extract sugar from a variety of common plants developed but the corn ethanol is a waste of time and energy.

    Link to this
  6. 6. jerryd 2:13 pm 10/19/2013

    Bucketofsquid, great name but wrong on your info. Facts are if you do gasoline accounting the same biased way, it’s even worse.

    Using todays numbers everything is far more eff from growing corn to distilling the ethanol out.

    Hint they don’t use oil much on the farm anymore unless it’s biodiesel plus ethanol and NG/Biomethane.

    What was used for your number are old crop data plus they didn’t take into account after ethanol is made, all the corn oil, far far more healthier proteins, etc are left.

    Facts are corn is a terrible human food but after fermenting becomes a great one. Though most is used as the corn was, for animal feed.

    So you have better food value dried mash, corn oil plus cobs/stalks to spread the now far lower energy needed over, nicely increasing it’s EROI well above Oil if treated the same way.

    The only thing gone is the starch replaced with yeast protein. I think that and ethanol plus the $b’s worth of jobs and not sending those jobs/money overseas increasing our imports 20% is a great tradeoff and scares big oil.

    So what you are repeating is some well done oil propaganda from the 80′s!!! that is still believed by many today.

    Link to this
  7. 7. jerryd 2:37 pm 10/19/2013

    Sault,
    As an example a gal of gasoline takes 3kwhrs to just refine in my stronger that steel composite 2 seat EV sportwagon will go 30 miles+ on at 100wthrs/mile!!!

    The other data point is most cars at idle take as much power as it takes my EV to go 60-70mpg. Gas/diesel cars only get 7-8% of the fuel to move a car.

    Vs EV’s that get 65% eff from PV/RE to the road.

    $800/1kw sunelec of PV can give me 50 miles/day for 20-25 yrs!! Now how is FF going to beat that much longer?

    Sadly to get mine I had to design, build it. Yet it could be mass produced with 80mph, 80 mile range for under $10k as it uses only 1,000lb of stuff $3/lb average stuff. And the composites with design greatly cut labor to build it.

    Soon even more will figure this out both with EV’s with a rarely used unlimited range generator and PV now and very soon other RE for homes/buildings will end up costing 30% or less than dirty utility power and oil fueled cars.

    It’ll once wide spread will end the FF era along with inherently safe small factory built lead/salt cooled nukes that even a fool can’t mess up, biomass, hydro, river/tidal, wind, geothermal, etc.

    Chevron was so scared of EV’s they bought the NiMH patents stopping EV’s in the 90′s as they wouldn’t let anyone build them bigger than 10amphrs, useful for hybrids but useless in EV’s as they don’t play well together in parallel.

    Now Lithium is SO much better!! But I still use lead for mine until Lithium price drops, at 25% of the cost total of a gas version. By the time my present packs die in 4-7 of service, in 2 more yrs, Lithium should have dropped enough.

    Link to this

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