Gas prices are soaring everywhere in this country to unprecedented levels, as every driver now painfully knows. With costs approaching or exceeding $4 a gallon, the sticker shock may trigger memories among some older Americans of the oil crisis of 1973 and 1974.
Members of OPEC (the Organization of Petroleum Exporting Countries) decided in late October 1973 to cut oil production by 25 percent. With many Middle Eastern nations a part of the cartel, it was hoped that the higher prices triggered by lower supply would force Israel to withdraw to its 1949 armistice lines. OPEC also cut off oil to the U.S. and the Netherlands for their military and political support of Israel during the Yom Kippur War of 1973.
For the duration of the crisis, long lines of drivers could be seen waiting to get a few gallons of gas at service stations across this country. At one point, there were “odd and even” days in which drivers were allowed to fill up on a given day based on their license plate numbers.
The war and the embargo eventually ended, and the price of gas at the pump went from 38.5 cents in May 1973 to 55.1 cents in June 1974. Compare that with today’s prices!
At the height of the oil crisis, there was talk of making the U.S. energy independent, but those plans were eventually scrapped. The only thing that changed was the impact on the American motor industry as the smaller and more fuel-efficient Japanese cars took over the market. Today, we remain prisoners of oil, at the mercy of OPEC and insatiable, profit-driven oil barons.
One good policy that came out of the oil crisis was the formation of the Strategic Petroleum Reserve (SPR). While most domestic oil is sent directly to refineries and then to the consumer market, some of it is held back and sent to the SPR.
This supply of oil has been used a few times, such as during the Persian Gulf War in 1991 and during the hurricane seasons of 2005 and 2008, with the goal of controlling the rising cost of gasoline and home heating oil. At present, there are 727 million barrels of oil in the SPR.
Nearly 40 years after the oil crisis, the U.S. finds itself once again in the crosshairs of political instability in the Middle East. Bahrain, Egypt, Jordan, Oman, Tunisia and Yemen are all in the midst of major political upheaval, and Libya is nearing a civil war.
Of course, OPEC decided that this was the perfect time to cut back on oil production. The overall weak American economy is tough enough on the middle and working class; adding to their woes by driving up the price of gasoline—and the cost of all other goods shipped by diesel-powered trucks—is just piling on.
Sen. Chuck Schumer has asked President Obama to release some of the SPR oil supply to help calm the economic turmoil that this country is experiencing. “With oil prices surging day after day, Americans are being squeezed at the pump and paying more for everything from groceries to plane tickets,” said Schumer.
We couldn’t agree more, but let’s go further. How about decreasing the multiple taxes imposed on every gallon of gas? A temporary tax moratorium—combined with the release of SPR— will prevent the American economy from stalling on empty wallets and pocketbooks.
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