40 years after the OPEC embargo

Oil was once so plentiful it came out of the ground like artesian wells, like the bubbling crude made famous by Jed Clampett fame and the dangerous gushers from fields in Texas, California and Oklahoma.

The heyday of easy oil began to fade when U.S. oil production peaked in 1970. Big oil could collect petroleum from the Middle East and ship it halfway around the world cheaper than local production.

When Egypt and Syria invaded Israel on October 6, 1973, the U.S. imported 12% of its oil supply from the Middle East. After the Soviet Union began sending arms to Syria and Egypt during the Yom Kippur War, President Richard Nixon asked Congress for $2.2 billion in emergency aid for Israel on October 19, 1973. Libya immediately embargoed all shipments of oil to the United States. The other Arab members of OPEC followed suit the following day.

Prior to the embargo, American price controls were already causing artificial scarcity and rationing. After the embargo, the retail price of gasoline in America jumped from 38 cents per gallon to 55 cents. The U.S. consumed roughly 17 million barrels of oil per day in 1973 and imported 4 million barrels. The price of oil jumped from $3 per barrel to $12 (over $50 in 2013 dollars) when a million barrels per day suddenly were removed from the market.

The United States reacted to the shock of long gas lines and shortages by, eventually, buying smaller cars, instituting speed limits, and even buying bikes. Gas prices were already climbing in 1971 and 1972 after U.S. peak production, when the sale of bikes for the adult market increased nearly sixfold, from 1.4 million bikes in 1970 to 8 million bikes for adults in 1972. California and New York began innovating with bike facilities in 1972 and 1973, even experimenting with segregated bike facilities and creating bike lanes on the sidewalk side of parallel parking.

The bike networks we see today in the cities of Santa Cruz, Palo Alto, and Davis, California all began after the early 70s oil crunch. Those old baroque bike racks you’ll see in some California cities were designed around this time frame as well.

America’s relatively small volume of imports from the Middle East limited the effects of the embargo. The Netherlands, however, relied on the Middle East for 80% of their energy needs. Although the Netherlands has always had a much higher rate of bicycling than the United States, the Dutch had their own post-war love affair with highways and sprawl development. Many of these plans to raze neighborhoods and replace them with massive highways came to a halt in the early to mid 70s, and they built bike paths instead.

The Middle East still drives a lot of U.S. politics, but the economic influence of that part of the world wanes as OPEC production drops while enhanced recovery techniques boost American production. With oil at $100 per barrel, oil companies can afford to work in extreme environments and to recover hydrocarbons from shale. Whether oil companies and even national economies can afford the risk inherent in the extreme engineering required to extract oil from deep sea beds and prairie rock remains to be seen.

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