Energy Crisis

Energy Crisis

A global energy crisis is defined as any great shortfall in the supply of energy to an economy. Energy is oil, electricity, or other natural resources like coal and natural gas. When the energy supply to an economy becomes endangered or scarce, prices raise to record highs. This paper will cover historical events that caused energy crises in the past, recent events that affect today’s energy prices, and what is being done and proposed to lessen the United State’s dependence on some forms of non-renewable energies.

In the history of the United States alone, there have been several energy crises. For example in 1973, many of the major Arab oil-producing states helped to pass an oil export embargo in response to western support of Israel. The new embargo forced the price of oil to almost quadruple by 1974. U.S. imports of oil from the Arab countries dropped from 1.2 million barrels a day to 19,000 barrels.

The United States government was quick to respond to the embargo. A national maximum speed limit of 55 was enforced to help reduce gasoline usage. President Nixon appointed an official energy czar and created the Department of Energy in 1977. The National Energy Act of 1978, which was designed to discourage energy consumption and to accelerate the transition to alternative fuels, was also in response to the crisis.

The increased prices hit the unemployed, the aging workers, and the younger workers the hardest. Schools and offices closed down to save on heating oil and factories cut production and laid off workers. Rationing of gasoline had motorists facing long lines at gas stations. Drivers of vehicles with license plates that had an odd number as the last digit, were only allowed to purchase gasoline on odd-numbered days of the month, while drivers with even last digits could only purchase fuel on even-numbered days. A few months later the burden eased. The embargo was lifted in March of 1974 but the aftermath lasted into the 1980’s.

In 1979 the Iranian Revolution was the cause of another shortage in America. In the wake of protests, the Iranian leader fled the county. The protestors shattered the Iranian oil sector and began another energy crisis. Although, this crisis was not brought on by a low supply. Saudi Arabia and other nations increased production to offset the decline, and the total loss in production was about 4%.

However, widespread panic resulted, driving the price far higher than it would have gone under other circumstances. The government instituted price controls in an attempt to control the market. Again, this resulted in consumers waiting in long lines at gas stations. It was estimated that Americans wasted up to 150,000 barrels of oil per day idling their engines in the lines at gas stations.

Events like these have forced nations around the world to investigate innovative ways to conserve energy usage, and in some cases turn to new sources all together. For instance, during the crisis of 1973 Japan began producing smaller, more compact vehicles that got more miles to the gallon and consumed less gasoline. In America, carpooling and mass transit was advocated. Many people went one step further than that, literally. People began walking