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One of the distinctive features of misery swamps like Venezuela is the gas-station line, formed by motorists queuing up for hours or even days in the often vain hope of deliveries of gasoline.
That such lines could form even in oil-abundant countries such as Venezuela is testament to real-world consequences of bad political and economic policies, but gas lines aren’t an unknown phenomenon in the United States. They show up when natural disasters like hurricanes disrupt regional supply chains.
They even made a brief appearance in the Puget Sound within recent memory when a windstorm triggered widespread power outages. The modern gas station does not work without electricity, so those who ignored forecasts of an approaching storm and failed to fill up in advance (yes, we are reporting from personal experience) were left scrambling to find stations that were still open and still had gas. If they succeeded, they then had to endure long lines to reach the pump with the fuel-gauge indicator stuck on the wrong side of “E.”
Those are isolated and rare occurrences in this country, but it wasn’t that long ago that gas lines were far more common and widespread in the United States. That would have been in everyone’s least-favorite decade, the 1970s, which had the distinction of not one but two oil price and supply shocks.
Those who experienced the decade will remember not just the lines, the “out of gas” signs at some stations and the upwardly spiraling prices at others that still had gas to sell. They’ll also remember rationing schemes in which motorists were allowed to buy gas on certain days depending on whether their license plate number ended in an even or odd number.
History is fuzzy on how widespread those schemes were. They were certainly prevalent in the East. Several articles suggest that both Oregon and California had even-odd systems in place, but there’s no mention of Washington. Readers who were living here and driving at the time will be able to fill in the blank spots on what was going on locally.
The second of those oil shocks, in 1979, was 40 years ago, but it won’t get the sort of commemoration that events like the 50th anniversary of the moon walk will enjoy this year. In many ways, though, that second shock was far more consequential.
“The second oil shock of the 1970s was associated with events in the Middle East, but it was also driven by strong global oil demand,” says a 2013 Federal Reserve essay on the subject.
The Iranian revolution and the resulting decline in that country’s oil production took 7 percent out of global supply, prompting fears of further disruptions and “widespread speculative hoarding.” Oil prices more than doubled between April 1979 and April 1980.
“Eventually, slowing economic activity in industrial countries and investments in additional energy production and energy conservation technologies helped to saturate the market with oil and brought an end to the oil crisis,” the essay adds. “Beginning in mid-1980, real oil prices began to subside, igniting a secular decline that would last for much of the next 20 years.”
That’s a dry academic way of putting it. Here’s what else it did:
▪ The oil shocks accelerated the ascendancy of foreign automakers, particularly the Japanese, in the American market. Those foreign manufacturers made the smaller, more fuel-efficient cars that Americans, seeing the price of gasoline soar, began demanding. Those were the cars that Detroit either didn’t make or made inferior versions of.
▪ That “slowing economic activity” turned into a recession married to inflation (supposedly an impossible concurrence) that was brought under control only with eye-popping interest rates. The combination of those factors pushed much of the country’s industrial base, already suffering from decades of under-investment and neglect as well as competition from lower-cost imports, to the gates of the scrap heap, and helped create the Rust Belt of economically stagnant communities.
▪ Higher prices fueled the Carter-era move to remove controls on prices from domestic oil production. Deregulation encouraged more production that, in conjunction with more oil brought to the global market from sources like the North Sea and conservation from the demand side, not only brought down oil prices but sliced OPEC’s ability to set them.
We’re still dealing with the impacts and net effects of the 1979 oil shock, which makes it a far more relevant anniversary than the moon walk. Yet, the anniversary year will not be marked with a return of gas lines, even though some of the conditions — Iran raising havoc among them — are remarkably similar to 1979.
For that we can credit a more recent revolution — technologies like fracking that brought to market huge domestic supplies of oil and natural gas and gave the United States far more control over its own energy destiny.
That the system is resilient enough to keep the American economy moving, to recover quickly from disruptions and to largely shrug off the latest bit of bad news from the Middle East is something to consider amidst all the loose talk of doing away with fossil fuels to power the transportation sector.
Disagree if you will, but do appreciate that you’re not having to ponder those big questions while sitting for hours in a line of cars at the local gas station that snakes down the street and around the block.