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The End of the Conflict-Creating Oil Age Is Coming Into View -- Here's What the Future Looks Like

Fracked oil and gas, Canadian tar sands, Saudi oil—none can beat modern efficiency and renewables on direct cost, price stability, or impacts.

Photo Credit: PhotographyByMK/ Shutterstock.com


Forty years ago this month, Syria and Egypt launched a Yom Kippur surprise attack on Israel to regain land and prestige lost in the 1967 Six-Day War. Israeli forces were nearing Damascus and Cairo when a ceasefire took hold. But as the Soviet Union resupplied its Arab clients and President Nixon resupplied Israel, Arab members of the OPEC oil cartel, led by Saudi Arabia, announced a 5% monthly cut in oil output, then embargoed oil exports to the U.S. and later others. OPEC provided 35% of America’s oil at the time.

Prices soared and deliveries faltered. “No gas today” signs spread. People waited in line for gasoline, risking scuffles and occasional gunshots. America had lost her energy innocence.

Relaxed regulations and massive subsidies tried to expand fossil, unconventional fossil, and nuclear energy. (In 1975 oil fueled 15% of U.S. electricity vs. less than 1% today.) Most such efforts proved far too costly, but President Carter’s shift toward renewables and especially energy efficiency was strikingly successful.

On his watch, President Ford’s 1975 auto standards took effect in 1978, raising new domestic cars’ efficiency 7.6 mpg during 1977–85. They drove 1% fewer miles on 20% fewer gallons, and became lighter, cleaner, safer, but scarcely smaller and no less peppy, saving fuel even when 55-mph top speed limits were abandoned 13 years later . New federal and state policies also made buildings and factories more frugal. Appliance efficiency standards passed Congress without a single nay vote.

The results were stunning. During 1977–85, the U.S. economy grew 27%, oil use fell 17%, oil imports fell 50%, and imports from the Persian Gulf fell 87%; they’d have reached zero in 1986 had President Reagan not reversed the policy. Oil burned per dollar of GDP fell by 35% in eight years, or an average of 5.2% per year—enough to displace a Persian Gulf’s worth of net imports every two and a half years.

OPEC’s oil sword was shattered in a dozen years as customers saved oil faster than OPEC could conveniently sell less oil. It sales plummeted 48%, breaking its pricing power for a decade. Then in 1985–86, as massive new energy supplies belatedly arrived to meet needs efficiency had already filled, energy gluts crashed prices. Policymakers, instead of finishing the job, hit the snooze button for a decade.

By the 1991 Gulf War, we put our kids in 0.56-mpg tanks because we hadn’t put them in 32-mpg cars (enough to displace Persian Gulf oil). Yet oil imports continued to soar, reaching 60% of oil use in 2005 and returning to 1973-level dependence only this year. Thus today, America pays $2 billion a day for oil, plus $4 billion a day for its hidden economic and military costs.

Four times since 1980, U.S. forces have intervened in the Persian Gulf to protect not Israel but oil. The Gulf hasn’t become more stable. Readiness for such interventions costs a half-trillion dollars per year—about ten times what we pay for oil from the Gulf, and rivaling total defense expenditures at the height of the Cold War. And burning oil emits two-fifths of fossil carbon, so abundant oil only speeds dangerous climate change that destabilizes the world and multiplies security threats.

Yet practical, profitable solutions are at hand. Producing a dollar of GDP now uses less than half the energy and one-third the oil it took in 1973. Last year, wind and solar power, now cheaper than gas-fired power in favorable sites, added half of new U.S. generating capacity, and making a dollar of GDP took 3.4% less electricity than a year earlier.

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