Why We Can't Afford Cheap Gas

With the cost of crude oil again nearing the $100-a-barrel mark (even after last week’s financial meltdown) and this summer’s record gas prices in the rearview mirror, automotive executives and industry analysts are already heralding the return of gas-guzzling trucks and SUVs. Car makers are rolling out new truck models, and even Republican presidential candidate John McCain, in a new Michigan TV spot, promises to "spur truck sales." Never mind that only months earlier, these same analysts, as well as auto executives and consumers alike, insisted that the future of the automotive industry lay in more fuel-efficient models like hybrid and electric cars. Now, however, it seems that many involved are slowly slipping back into the pre-$100-per-barrel mindset that was so popular when pump prices were under $4 a gallon and drivers of SUVs and trucks roared down the roads with clean consciences.

But if history is any indication, this period of relief and a possible shift back to gas-guzzling cars must be met with cold-eyed skepticism. Sure, cheaper gas means much needed short-term financial relief. Looking past the next year or two, however, cheaper oil and a resurgence of gas-guzzling vehicles would be seriously detrimental to the United States, as similar oil crises in the past have shown that the periods immediately after a spike in oil prices -- not the crises themselves -- have arguably inflicted far greater damage on the country. During these relief periods, critical efforts to develop alternative energies and fuel-efficient technologies -- begun under the culture of urgency that an energy crisis instills -- have been squashed, allowing Americans to revert to the same old habits, tendencies and behaviors that got them into trouble in the first place.

Take, for example, the October 1973 U.S. oil embargo. After a group of African and Middle Eastern countries briefly stopped supplying the United States with oil, prices in early 1974 climbed from $3 to $11 per barrel, setting off a nationwide energy panic and resulting in massive lines at gas stations. In response, President Richard Nixon proposed lowering speed limits on federal and state highways and temporarily banning the sale of gasoline on Sundays. Nixon also announced his "Project Independence," a set of energy-related recommendations aimed at achieving the quixotic goal of making the United States energy independent by 1980.

Though Nixon succeeded in lowering speed limits and imposing the Sunday ban for a brief period, Project Independence floundered. As oil prices began to drop after the '73 embargo, Nixon's vision of a United States "that will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes and to keep our transportation moving" was reduced to a flimsy "blueprint" passed on to his successor, Gerald Ford, in late 1974. Time reported that the weakened blueprint would "not be an action program, but rather a listing of options for debate within government and eventual White House decision." Under Ford, Project Independence soon disappeared, and although Ford renewed his predecessor's goal for making the United States energy independent (this time, by 1985), Americans quickly reverted back to good old reliable oil.

In 1979, this same narrative of an oil crisis, a subsequent "commitment" to energy independence and then an immediate scrapping of alternative energies research played out once more. After the Iranian Revolution and the ousting of the Shah of Iran, a worldwide oil panic ensued in which the cost of a barrel of crude oil in April 1980 shot up to a record $39.50, or $103.76 in today's money when adjusted for inflation. Like the '73-'74 crisis, the lines at gas pumps grew, rationing measures were implemented, and hysteria quickly spread throughout the country.