1973+Oil+Crisis

The 1970’s were a very trying time in the United States. With two oil crises and the Watergate scandal most people were getting pretty sick of it. The era started off bad with the 1973 Arab oil embargo, an event that both devastated America’s economy and damaged our invincible mentality. After the initial shock and after getting past the psychological blow America, started on its path back to a new and better future. With a new awareness, sparked by the 1973 embargo and ingrained by the 1979 oil shock, America attacked its problem of energy dependency. The Carter administration made valiant efforts towards energy independency following the progress made by Nixon and Ford. However, this progress was mostly lost when President Reagan took over office and focused most of his efforts into the military. Table of Contents:
 * The 1973 Oil Crisis **
 * 1) The War
 * 2) The Embargo
 * 3) The Impact

In 1948,Israel became its own state. It fought long and hard and was acknowledged as an individual state by the United Nations in 1948, taking land that belonged to its neighbors in the Middle East. The neighbors, unhappy with this, started a feud withIsrael, threatening war to take back the land that once was theirs. In the 1970’s Egypt became particularly loud about its discontent and in three different interviews the president, Anwar Sadat, declared his threat of war unless the new Jewish nation surrendered the territory that Israel occupied. These threats were viewed with much skepticism as their numerous previous threats had been left unfulfilled. On October 6, 1973, known as Yom Kippur and the holiest day on the Jewish calendar,Egypt and Syria coordinated a surprise attack against Israel. Backed by 8 other nations, they out numbered Israel forces 10:1. Israel, though taken by surprise initially, quickly recovered and forced the war back into Egypt. At this point in the war, the United Nations, who had refrained from intervening so far, stepped in to diffuse the situation.
 * The War**

This war lasted about 20 days, but the damage done in those 20 days lasted a long time. During the war, to weaken any foreign allies Israel had, Persian Gulf oil producers cut back their oil output to the United States and other countries such as England and France. Eventually more Middle Eastern oil producers joined this movement and oil production was cut by 25% in a matter of days. This was known as the Arab Oil Embargo. Arab states had supplied 7% of US petroleum and after the price raised and hovered unsteadily; it finally settled at a price about 45% above where it had been initially. 1973 = $4.75 ($23.87 when adjusted for inflation as of 2011) 1974 = $9.35 ($42.58 when adjusted for inflation as of 2011) 2011 = $86.84 (already adjusted for inflation) In one year gas prices had almost doubled, a feat that it took 40 more years to repeat. Nixon responded to the embargo in his address to the nation about National Energy Policy, televised November 25, 1973, about a month after the Yom Kippur War ended in Egypt and Syria’s defeat. He stressed the importance of the cooperation of the American public and identified key ways he hoped they would participate to help reduce energy consumption in the US. His solution included reduced speed limits, elimination of unnecessary lighting, and reductions in home heating. The energy reductions were huge, according to the Energy Information Administration, from 1973 to 1975 we reduced our energy consumption by 3.709 quadrillion British Thermal units (Btu’s; 1 Btu is equal to 1,055.056 joules). President Ford carried on Nixon’s energy policy when he took over office in 1974, signing the 1975 Energy policy and Conservation Act, which set standards for energy efficiency in cars for the first time. Both Nixon and Ford declared their wishes for energy independence by the 1980’s and later by 1985. In 1977, when President Jimmy Carter was elected to office, he immediately focused his attentions on energy conservation. He created the Department of Energy in 1977 and proposed a $142 million plan to gain energy independence by 1990. A key point in his plan was the advancement of renewable resources, particularly, solar energy. He installed 32 solar panels on the roof of the White House to power the main water heater, all of which were taken down during the Reagan administration. One of his specific goals outlined in his Proposed Energy Speech was that he hoped to have 2.5 million homes using solar power. Carter maintained that by the 1980’s, the world’s energy demand would overtake its production” and that, “The United States used 40% more energy than we produce” and “the Middle East has only 5% of the world’s energy, but the United States has 24%”. This he stressed in his Energy Policy speech he delivered on April 18, 1977. When these numbers are calculated, the output suggests that the US consumed 33.6% of the world’s energy consumption. This is probably a bit of a stretch, but not by too much. Nowadays, the US is responsible for 25% of the world’s energy consumption. Towards the end of the Carter Administration, pressure to put more spending into the military proved too great for Carter to keep pushing aside, so he put aside his Energy Policy in favor of a foreign policy that proved to be his downfall. In the 1981 elections he was defeated by Reagan and energy efficiency was no longer considered a main concern.
 * The Embargo**
 * The Impact**
 * Analysis**

The 1973 Oil Crisis was a real eye opener to the people of the United States and really, the entire world. The Middle East and other major oil producers realized the power that they have over the rest of the world and more specifically, over the more industrialized countries. In the same way the more industrialized countries, such as the United States, Japan, England and France to name a few, realized their great vulnerability and the liability that it came with. This turn of events sparked a new age for the world. In 1979, when the Organization of Arab Petroleum Exporting Countries (OPEC), the Middle Eastern organization that controlled oil production and exportation, once again raised the price of petroleum and cut production in response to the US sheltering the recently overthrown Shah of Iran, the impact was substantially less due to preparation. Unfortunately though, the world wasn’t nearly prepared enough to suffer minimal damage, the dependency that industrialized countries have on foreign oil makes all of us susceptible to their whims.

When America found itself without its main supply of its main fuel source, our world went topsy-turvy. The startling growth of the price of gas almost immediately resulted in a drop of oil consumption. However many regions still felt the impact and many families and businesses suffered. The oil companies, in response to the elevated petroleum prices, were forced to either increase their prices or go out of business. About 85% of Americans drove to work and with gas prices up an average of 45% most turned towards public transportation. The increases in gas prices affected the entire economy, increasing prices everywhere with businesses just trying to stay in business. The whole economy was going down as was the value of the American dollar.
 * The Impact on Society**

The American dollar and most other world currencies such as the pound and the franc were all originally tied to the value of gold. The Bretton Woods agreement established in 1944 stated that the base of all currency was gold. This being because of the vast gold stores discovered after World War II, consequently most of those stores were in the hands of the United States. This made the United States very affluent indeed, leading to our generous support to our Allies during the Cold War and the draining of our treasury during the Vietnam War. Because of the US’s newfound inability to provide gold for dollars, Nixon broke the Bretton Woods agreement in 1971. This resulted in what is known as the “floating” of the dollar. With the world currencies no longer anchored to a base value they all “floated” up and down against each other. With this new instability in the monetary system, all it took was one embargo and the mass producing of American dollars to send the US into an economical tailspin that it never really recovered from.
 * How the Dollar Plays a Role**

Back on the rise from the first oil crisis, international relationships were still tense. Israel kept beating back attack after attack each time it was challenged for the land it had taken. The Camp David Peace Accords were established in 1978 putting an end to the fighting. America and other European and Asian superpowers were all trying to recover from the damage done to their societies and get on with life. But problems don’t stop just because people want them to. The second oil embargo by OPEC was executed in 1979 in response to United States involvement with the Iranian government that was overthrown in a coup earlier in 1979. At this point in time Jimmy Carter had taken over office and made it a goal of his to wean the United States off of foreign oil. This became a massive effort on his part and put the US in the lead for alternative energy advancements, singling out solar power as the next best thing. As the Carter Administration went along though, the people wanted focus not on a permanent solution to the energy crises, but the immediate relief that only military funding could provide. Carter remained adamant about the budget until towards the end of his term when fear of not being elected a second term pushed him into a foreign policy plan that ultimately didn’t do what it was supposed to. This failure led to Ronald Reagan’s election in 1982, as he promised a stronger foreign policy and more defense spending despite the fact that Carter had also recommended huge increases in defense spending during his term. This resulted in the United States losing not only its place in leading solar panel production to Japan but also most of its progress in energy conservation.
 * How Relationships Change**

All this adds up to one thing: we need control back! With the people, and not just of the US, of the world, under the thumb of their governments, who find themselves subject to the whims of a single group of people, who are influenced by multiple other countries, who dictate how much oil is produced and how much it is sold for, who’s really in control? When Nixon and Ford and Carter mandated energy conservation in the 1970’s the amount of energy consumed by the United States decreased by about 25%. This progress can be replicated if the US focuses more on finding safer, close to home, easy access renewable resources and alternative fuels. New information has brought to our attention that the world’s crude oil consumption and CO2 emissions are no longer only a concern for economical and societal stability, but for healthier living and a better world.
 * So what do we do now?**

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