Drivers and even a man pushing a lawnmower line up to get gas in San Jose, Calif., on March 15, 1974. The 1973 Arab oil embargo dramatically reshaped what Americans drive, experts said Wednesday at a conference in Washington. (AP)
Washington – — The 1973 Arab oil embargo — launched 40 years ago Thursday — dramatically reshaped what Americans drive and continues to impact future vehicles, experts said at a day-long panel discussion here.
At the conference Wednesday, executives and former government officials recalled the 1973 energy crisis, which prompted gas lines, a tripling in oil prices and an embrace of conservation measures in the United States. Some states even asked residents not to put up Christmas lights to save energy that year.
“You know, OPEC was founded in 1960. And like most of us, it didn’t start causing trouble until its teens. In 1973, OPEC pulled the IV drip on our petroleum habit and we went into shock,” General Motors Chairman and CEO Dan Akerson told the Securing America’s Energy Future summit Wednesday on the 40th anniversary of the oil embargo. “It was an easy thing to pull off.”
The U.S. was unprepared, he said.
New-car fuel economy had declined from 14.8 mpg in 1967 to less than 12 mpg. Akerson noted gasoline was cheap at 38.5 cents per gallon or about $1.96 in today’s money. “The average new car only got about 11.9 miles per gallon – a huge step backward from 1923 when cars averaged 14 mpg,” Akerson said.
The following year, the federal government imposed a nationwide 55 miles per hour maximum speed limit and year-round daylight savings time was in place for a year to reduce energy use. The decade that followed saw a downsizing of many American vehicles and engines to smaller, more fuel-efficient models.
“We don’t need their oil,” said natural gas proponent and billionaire T. Boone Pickens at the summit, urging a push to use more natural gas in U.S. vehicles.
FedEx founder and CEO Fred Smith said the embargo nearly killed the company “in the cradle” because gas allocations were based on previous use. He said one lesson of the embargo was that the free market — rather than government controls —is best to ensure access to energy.
In 1975, President Gerald R. Ford signed an energy bill that created the Strategic Petroleum Reserve and set the first corporate average fuel economy standards, more than doubling requirements from the fleet average of 13 mpg to 27.5 mpg over 10 years. Congress in 2007 lifted restrictions that had barred the National Highway Traffic Safety Administration from hiking fuel efficiency requirements for light trucks for nearly 20 years.
The law set a goal of a fleetwide average of 35 mpg by 2020. President Barack Obama’s administration and major automakers reached a deal in July 2011 to double requirements to 54.5 mpg by 2025 — far above what Congress had proposed.
Former Defense Secretary and CIA director Leon Panetta told the conference that energy doesn’t often get the attention it deserves.
“Too often we wait for the crisis to act,” Panetta said. “Gas lines form and suddenly everyone’s concerned about conservation. I think we have to get ahead of that — we can’t wait for the next crisis.”
Retired Adm. Dennis Blair, former director of national intelligence, noted that the 2007 energy bill was backed by President George W. Bush and then-House Speaker Nancy Pelosi.
“If we can find the right set of proposals, we can get Republicans and Democrats to do something together,” he said.
Former Secretary of State Madeleine Albright told the panel that the goal of U.S. energy independence is laudable — but ending reliance on foreign oil wouldn’t mean the U.S. would stop caring about the Middle East.
“We care about oil prices generally,” she said, adding energy independence “doesn’t mean we are independent on a whole host of issues.”
Bob Dineen, who heads the Renewable Fuels Association, says ethanol has been a key part of cutting U.S. use of Middle Eastern oil.
“If you are of a certain age, your mind is likely racing through past memories of gas rationing, long lines waiting to fill-up, odd and even number license plates determining what days you could go to the gas station, red and green flags designating whether stations had fuel at all, bans on Christmas tree lights, and real, but ridiculous, threats of toilet paper shortages as a result of the embargo,” he said this week.