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Wednesday, Sept. 7, 2006
1973 U. S. energy crisis result of OPEC embargo
(This is the first in a four-part series on energy shortages.)
By Jim Blount
It was called a "global trauma," "a rude awakening" and a "pivotal event" in our history when the United States was hit with an energy shortage in the final months of 1973. It also was a tense time in the Cold War (the U. S. vs. the Soviet Union), the Vietnam War was in its final stage and Watergate revelations and investigations were multiplying.
After about 25 years of crude oil prices in the $2 to $3 per barrel range, Butler County and the nation reached the end of an unlimited supply of cheap oil. Control of world oil prices changed from the United States to the OPEC nations. Until October 1973, miles per gallon wasn't considered when evaluating a vehicle purchase. Gas guzzling wasn't in the American vocabulary.
Shortages had been reported early in the summer of 1973 when U. S. refineries were producing about 6.5 million barrels a day while drivers were demanding nearly 7 million barrels. Some stations ran out of gas, others limited customers to 10 gallons or less per stop. Rationing seemed inevitable. Some parts of the nation experienced brownouts and power failures.
Price wasn't as much a problem as supply in the first energy crisis since World War II (1941-45). Fuel prices increased, but the ascent was limited by federal price controls that had been initiated by President Richard M. Nixon in 1971.
OPEC -- the Organization of Petroleum Exporting Countries -- had formed in 1960 with five nations: Venezuela, Iran, Iraq, Saudi Arabia and Kuwait. Six others had joined by the end of 1971: Qatar, Libya, Indonesia, United Arab Emirates, Algeria and Nigeria.
The 1973 oil crisis was a byproduct of the Arab-Israel War. Because of American aid to Israel, Arab producers embargoed oil shipments to the U. S. The denial was extended to other nations that backed Israel.
There had been previous wars in the Middle East, but none had a direct influence on Butler County. The oil embargo was part of the conflict that started Oct. 6, 1973, when Israel was attacked by Egypt and Syria. It was a war with multiple names -- the Arab-Israeli War in much of the world, the Yom Kippur War in Israel and the Ramadan War in Arab regions.
American attention was diverted from the war Oct. 10 when Vice President Spiro Agnew resigned after entering a no contest plea to income tax evasion charges. Congressman Gerald Ford replaced Agnew in December.
Oct. 16, a 17 percent price increase, from $3.12 a barrel to $3.65, was announced by Iraq, Iran, Saudi Arabia, Kuwait, Qatar and Abu Dhabi, known as the "Gulf Six."
That same day the federal Cost of Living Council allowed gas prices at the pump to increase "from one-tenth of a cent to 1.5 cents per gallon" for stations that had received supplies since Sept. 28. In May 1973, the average price of regular grade gas had been under 40 cents a gallon. By May 1973, it would jump to 53 cents a gallon. Also that day, some Ohio school districts said they were facing a shortage of heating oil during the winter.
The news was worse the next day -- Oct. 17 -- when OPEC members agreed to use oil as a weapon in the Arab-Israeli War. Steps included reducing production and an embargo on exports to the U. S. and other nations supporting Israel. Among nations not sending oil to the U. S. was Saudi Arabia, reported then as "third among America's foreign oil suppliers, trailing Canada and Venezuela." The Saudis supplied 19.7 million barrels of about 400 million processed monthly in the U. S.
As the crisis unfolded, about 110 million U. S. motorists were using 288 million gallons daily. The U. S., with 6 percent of the world's population, consumed about a third of the global energy output in 1973.
Oct. 25, after diplomatic efforts by the U. S., the Soviet Union and the United Nations, a cease-fire was accepted by Israel and Egypt and signed a month later, but fighting between Israel and Syria continued into 1974.
By Oct. 26, the OPEC reduction was about four million barrels a day, about 20 percent of pre-war shipments to the U. S. In December, OPEC's Gulf Six announced another price hike on crude oil, from $5.12 to $11.65 a barrel, effective Jan. 1, 1974. The price of U. S. crude -- subject to the Nixon price controls -- also jumped from a 1972 average of $3.39 a barrel at the wellhead to $6.87 in 1974 as the oil embargo continued.
The embargo's impact wasn't confined to drivers. It caused shortages and increased costs for heating oil and other petroleum-based products, including natural gas. It rippled through the U. S. economy. Every Butler County resident was affected by the shortages and the conservation efforts. Local details will be covered in this column next week.
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Journal-News Wednesday, Sept. 14, 2006
Drivers had to adjust when 1973 oil embargo cut gas supply
(This is the second in a four-part series on energy shortages.)
By Jim Blount
As the winter of 1973-74 arrived, Butler County motorists were changing their driving habits, businesses were shortening hours and altering operations and residents were adjusting their lifestyles in reaction to an oil embargo imposed on the United States by the Organization of Petroleum Exporting Countries. The OPEC cutback began Oct. 17, but it took a few weeks for its impact to be realized here.
Arab nation enacted the embargo because of U. S. assistance to Israel in a war that began Oct. 6, 1973. On that date, Egypt and Syria attacked Israel in a conflict known as the Arab-Israeli War in much of the world, the Yom Kippur War in Israel and the Ramadan War in Arab nations.
President Richard M. Nixon -- who was resisting calls for his resignation as the Watergate scandal unfolded -- warned that the nation faced its worst energy crisis since World War II (1941-45). In a symbolic gesture, the lights on the White House Christmas tree were dark that year.
The president said he hoped voluntary conservation would make a national gas rationing program unnecessary. A limit of 10 to 15 gallons per week had been discussed. Rationing books were printed, but never distributed. He also recommended reductions in heating oil, including 10 percent for industries; 15 percent for residences; and 25 percent for commercial users.
The president asked filling stations to close from 9 p.m. Saturday to midnight Sunday, starting Dec. 1, to encourage conservation. He called for a 15 percent reduction in petroleum refined for gas. That amount would be diverted to producing heating oil for the winter.
Dec. 1-2, the first 27-hour weekend closing was observed by about 90 percent of Ohio's 12,000 stations. For those running out of gas, the Ohio Highway Patrol had cruisers "equipped with special tanks that permit transferring fuel to another vehicle." Monday, Dec. 3, OHP said it had "relatively few requests from stranded motorists."
After the first "Gasless Sunday," drivers learned to fill tanks before 9 p.m. Saturday, or limit travel between the suggested closing time and midnight Sunday. Later, police reported fewer vehicles on streets and roads on weekends.
The federal government lowered the speed limit to 55-mph. The new signs went up on I-75 in Butler County in early December.
Ohio truck drivers, especially independent operators, protested lower speed limits and higher diesel fuel prices by blocking pumps at stations for extended periods and running side by side to clog interstate highway lanes. Truckers claimed higher speeds (60 to 65 mph range) were more efficient and consumed less gas. They challenged government officials to ride with them to prove their point.
In December, a two-day shutdown by independent drivers had scattered support. Some drivers filled truck stop parking lots and refused to move. In several areas, including Butler County, shots were fired and rocks thrown at truckers ignoring the stoppage. Other drivers reported vandalism and threats of violence. The Ohio Highway Patrol announced increased patrols to discourage incidents.
By mid December, gas thefts were a problem. Area merchants said inventories of gas tank locks had been exhausted as vehicle owners tried to prevent siphoning.
In other areas, gas saving steps included permitting right turns on red and placing traffic signals on flashing caution instead of the normal stop-and-go cycles during off hours. Car pooling and using public transit were recommended as the supply problem worsened.
Regular gas had cost less than 40 cents a gallon in May 1973, but the price inched up to more than 50 cents during the winter. But for most drivers, gasoline supply was more of a concern than price.
There were often long lines at stations, some waits extending an hour or more. Some stations sold only to those who they recognized as regular customers, or limited sales to 10 gallons or less.
Others closed temporarily when their tanks were emptied. Still other independents closed permanently because of limited supplies. Some businesses -- to obtain a reliable source of gas for their vehicles -- bought independent stations or negotiated monopoly agreements with station owners.
Relief came slowly after March 18, 1974, when OPEC members -- except Libya and Syria -- ended their embargo on oil exports to the U. S.
After the embargo was lifted, the price of oil from Middle East nations remained high. Eventually, fuel economy ratings became part of the price sticker on new vehicles. Auto industry's advertising suddenly highlighted miles per gallon instead of power and speed .
The embargo's impact wasn't limited to driving. Other local repercussions will be covered in the next column.
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Journal-News Wednesday, Sept. 21, 2006
Cooler residences byproduct of 1973 oil embargo
(This is the third in a four-part series on energy shortages.)
By Jim Blount
It wasn't just motorists who suffered when OPEC nations slapped an embargo on oil shipments to the United States in October 1973. The ensuing energy crisis hit everyone -- at home, work and school. All segments of the American economy felt the impact of looming fuel shortages and increasing prices.
President Richard M. Nixon recommended that Americans adopt voluntary controls as the Organization of Petroleum Exporting Countries flexed their muscles by cutting the flow of petroleum to the U. S. OPEC had been formed in 1960 by five nations -- Venezuela, Iran, Iraq, Saudi Arabia and Kuwait. Six more had joined by the end of 1971 -- Qatar, Libya, Indonesia, United Arab Emirates, Algeria and Nigeria.
The 1973 oil crisis was a byproduct of the Arab-Israel War. Because of American assistance to Israel, Arab producers embargoed oil shipments to the U. S. The denial also was extended to other nations that backed Israel.
Before the embargo, there had been concern in Butler County about heating fuels for the 1973-74 winter. The OPEC action intensified the worry. By Dec. 1 -- with home heating oil and natural gas supplies doubtful -- most local stores had sold their stocks of portable electric heaters for homes.
The government recommended thermostats set no higher than 70 degrees during the day and under 68 while sleeping. Heavier clothing and the use of electric blankets -- also promoted as a money saver -- were urged to offset lower heat settings.
Increased home insulation, authorities said, would save money and energy in all seasons. Residents were urged to check weather stripping on doors and windows and to use drapes to keep out cold in the winter and reduce air conditioning in the summer. Year-round suggestions were to operate washers and dryers and dishwashers only when there was a full load.
Advertising and decorative lighting was discouraged, and some businesses changed or shortened operating hours to save energy. Butler Rural Electric Cooperative announced in December that it would switch to a four-day work week in its offices, garage and workshop, operating from 7 a.m. until 7 p.m.
The co-op also said in January it would offer customers an electronic device to automatically turn off water heaters for six minutes on the hour during the 5 to 7 p.m. peak use period. The voluntary control would be activated when the outside temperature fell below 10 degrees.
Jan. 4, 1974, President Nixon signed the Emergency Daylight Saving Time Energy Conservation Act. DST started two days later, Jan. 6, for 10 months in 1974 and Feb. 23 for eight months in 1975.
Area school officials objected to the time change, saying it required turning on heat in buildings earlier during the coldest part of the winter days. "It isn't going to help us save a thing," said Robert Cropenbaker, superintendent of Fairfield schools. "In fact, it will take more energy," he added.
Prolonged DST was unpopular and Congress ended the program after 1975. A major complaint had been that children traveling to school were endangered during dark winter mornings.
Later, the president announced Project Independence aimed at energy self-sufficiency within the U. S. by 1980. Reducing reliance on foreign imports was one objective. Others parts of the plan promoted conservation and the search for alternate fuel sources.
Israel and Egypt agreed to a cease fire Oct. 25, 1973, and signed the pact a month later. But fighting between Israel and Syria continued into 1974. OPEC nations -- except Libya and Syria -- lifted the embargo March 18, 1974.
After the embargo ended, the price of oil from Middle East nations remained high. During the summer months, some home owners installed additional insulation and took other energy-saving measures.
In the winter of 1974-1975, Hamilton stopped issuing natural gas permits for new buildings and asked existing customers to begin conservation. For several 1970s winters a "Cool It" campaign urged city customers to lower thermostats
Butler County residents no longer assumed that fuel would be relatively cheap and in abundant supply. Consumption had outpaced U. S. production in the previous 20 years. In 1950, the U. S. drilled 52 percent of the world's crude oil. (By 1997, the domestic output had dropped to 10 percent.)
The winter of 1973-74 would not be the last energy scare for Americans.
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Journal-News Wednesday, Sept. 28, 2006
Iranian revolt ignited second U. S. energy crisis of 1970s
(This is the last in a four-part series on energy shortages.)
By Jim Blount
Among the bad news in 1979-80 was the sudden arrival of the second energy crisis of the 1970s. On the positive side, the crisis didn't hit Butler County earlier. It missed the winters of 1976-77 and 1977-78, the most frigid periods in the last half of the 20th century, if not the worst cold and snow ever in the Hamilton area.
Unity seemed uncertain among the Organization of Petroleum Exporting Countries in 1979 as the price of crude oil hit $14.56 per barrel. Unrest in the Middle East increased during the year, but Iran appeared to be a strong U. S. ally stabilizing the region, despite the declining health of the shah of Iran.
Calamity came Nov. 4, 1979, when Iranian rebels, inspired by 79-year-old Ayatollah Khomeini, overran the U. S. embassy in Tehran and seized American hostages. Time magazine said the Shiite Muslim spiritual leader "gave the 20th century world a frightening lesson in the shattering power of irrationality, of the ease with which terrorism can be adopted as government policy."
Iranian turmoil disrupted oil production and that nation's exports to the U. S. Nov. 12, 1979, eight days after the embassy seizure, President Jimmy Carter ordered Iranian oil imports to the U. S. stopped. Iran countered three days later by canceling contracts with U. S. oil companies.
For Butler County residents, it was a rerun of 1973. In December that year, OPEC announced a crude oil price increase from $5.12 to $11.65 a barrel. U. S. crude, subject to price controls, went from a 1972 average of $3.39 a barrel at the wellhead to $6.87 in 1974.
An earlier OPEC surprise had been in October 1973 -- an embargo on petroleum shipments to the U. S. It ended in March 1974, and the energy panic in the U. S. gradually dissolved, but the price of regular gas at U. S. pumps went from under 40 cents in May 1973 to 53 cents a gallon a year later.
OPEC prices remained in the low teens from 1973 through 1978. Rates per barrel jumped to $20.19 in 1979, $32.27 in 1980 and $35.10 in 1982 before starting a gradual drop in 1983. (U. S. hostages in Tehran were held until the inauguration of President Ronald Reagan Jan. 20, 1981.)
The 1979-80 fuel shortage had started in the U. S. in the spring of 1979. The price per gallon increased from the 60 to 65-cent range to more than a dollar. As in 1973, local stations periodically ran out of gas, reduced hours and imposed restrictions on sales to stretch supplies. At times, motorists endured long, time-consuming lines before reaching a pump. Drivers had to pump the gas because in the years after 1973 station owners had allowed to switch to self-service to reduce operating costs.
The federal gas rationing debate resumed in 1979. One plan would have allowed vehicles with license plates ending in even numbers to obtain fuel one day, those ending in odd digits the next.
Also affected were heating oil, natural gas and other petroleum-based products. Conservation measures were reemphasized. Ohio lawmakers mandated lighting efficiency standards for public buildings.
By 1979, U. S. auto buyers were familiar with CAFE (corporate average fuel economy) standards, a byproduct of the 1973 crisis. Starting in 1975, federal law subjected manufacturers to minimum mile-per-gallon usage on new automobiles. U. S. consumption was 12.9 miles per gallon in 1974. CAFE mandated 18 mpg for 1978 models, rising to 27.5 mpg by 1985. The new mileage standards were part of the price sticker when the first back-to-back severe winters hit here.
The low of 25 below zero Jan. 18, 1977, rates as the area's coldest day. The 20 mph wind that day made it feel like minus 65. That January was the coldest and snowiest month in the area's history. The Cincinnati area endured 84 straight days below freezing.
The next winter, the Blizzard of 1978 crippled the area overnight Jan. 25-26, dumping at least seven inches of snow on 14 inches already on the ground. The wind averaged 28 miles an hour with sustained blasts of 60 to 70 miles an hour and gusts up to 75 mph. The mix caused drifts of 12 to 15 feet in some places, isolating people in some rural areas for several days.
For several days, schools and businesses closed, mail deliveries stopped and emergency measures were necessary to get food, medicine and other essentials to the snowbound sick, disabled and elderly. Local law enforcement agencies spent much of their time checking on the welfare of stranded individuals and families and delivering necessities to the snowbound.
Cincinnati snowfall totaled 53.9 inches and there were 63 consecutive days with an inch or more of snow on the ground from Jan. 8 through March 11, 1978. The snow vanished about 13 months before the second energy crisis of the decade.