1979 energy crisis

Lessons on energy for Harper in 2014 from Jimmy Carter in 1979

src: www.macleans.ca

1979 (or seconds ) oil crisis or oil shock occurred in the world due to decreased oil production in the wake of the Iranian Revolution. Despite the fact that global oil supply declined by only ~ 4%, widespread panic resulted, pushing prices much higher. Crude oil prices more than doubled to $ 39.50 a barrel over the next 12 months, and long lines once again appeared at gas stations, as happened in the oil crisis of 1973.

In 1980, after the outbreak of the Iran-Iraq War, oil production in Iran was almost halted, and Iraqi oil production was also cut. Economic recession triggered in the United States and other countries. Oil prices did not ease to pre-crisis levels until the mid-1980s.

After 1980, oil prices began to fall by 20 years, except for a brief rebound during the Gulf War, eventually reaching a 60 percent decline during the 1990s. Like the 1973 crisis, global politics and the balance of power are affected. Oil exporters such as Mexico, Nigeria and Venezuela expand production; The Soviet Union became the world's top producer; North Sea oil and Alaska flooded the market. It seems that the United States and Norway have more oil reserves than expected in the 1970s. OPEC loses its influence.

Video 1979 energy crisis

Iran

In the midst of a massive demonstration, Shah Iran, Mohammad Reza Pahlavi, left his country in early 1979 and Ayatollah Khomeini soon became the new leader of Iran. The protests severely disrupted Iran's oil sector, with production being heavily restricted and exports deferred. In November 1978, a strike by 37,000 workers at Iran's nationalized oil refineries initially reduced production from 6 million barrels (950,000 m ³) per day to about 1.5 million barrels (240,000 m ³). Foreign workers (including skilled oil workers) leave the country. On January 16, 1979, Shah and his wife left Iran on the orders of Prime Minister Shapour Bakhtiar (an old opposition leader himself), who tried to calm the situation.

Maps 1979 energy crisis

Effects

Other OPEC members

Rising oil prices benefited other OPEC members, who made record profits. When oil exports then return under Iran's new government, they are inconsistent and at lower volumes, pushing up prices. Saudi Arabia and other OPEC countries, under the presidency of Mana Al Otaiba, increased production to offset most of the decline, and by early 1979, the overall loss in world production was around 4 percent.

OPEC failed to maintain its superior position, especially after Iran and Iraq went to war in 1980 and caused a further 10% decline in world production - and in 1981 OPEC production was surpassed by other exporters. In addition, the member states themselves are divided among themselves. Saudi Arabia, the "swing manufacturer" is trying to regain market share after 1985, increasing production and causing downward pressure on prices, making high-cost oil production facilities less profitable or even unprofitable.

United States

The oil crisis has a mixed effect in the United States, as some parts of the oil producing country and other parts are regions that consume oil. Richard Nixon has imposed price controls on domestic oil. The gasoline control is revoked, but control of US domestic oil remains.

The Jimmy Carter administration began a gradual deregulation of oil prices on April 5, 1979, when the average price of crude oil was US $ 15.85 per barrel (42 US gallon (160 L)). Beginning with the Iranian revolution, the price of crude oil rose to $ 39.50 a barrel over the next 12 months (the highest real price of all time until March 3, 2008.) Deregulation of domestic oil price controls allowed US oil production to rise sharply from the large Prudhoe Bay field , while oil imports fell sharply.

And although not directly related, the disaster that occurred at Three Mile Island on March 28, 1979, also raised concerns about energy policy and availability.

Due to memories of oil shortages in 1973, motorists immediately bought panic, and long lines appeared at the gas station, as happened six years earlier during the 1973 oil crisis.

As the average time vehicle consumed between two and three liters (about 0.5-0.8 gallons) of gasoline (gasoline) one hour during idling, it is estimated that Americans throw up to 150,000 barrels (24,000 m ³) oil per day idling their engines in lanes at the gas station.

During that period, many people believed that oil companies artificially created oil shortages to raise prices, rather than factors beyond human control or US price control alone. The amount of oil sold in the United States in 1979 was only 3.5 percent lower than the record set for oil sales the previous year. A telephone poll of 1,600 American adults conducted by the Associated Press and NBC News and released in early May 1979 found that only 37% of Americans thought the energy shortage was real, 9% unsure, and 54% thought the lack of energy was fake news.

Many politicians propose gas rationing; one of those supporters is Harry Hughes, Governor of Maryland, who proposes even rations (only those with odd number plates that can buy gas on a strange day), as used during the 1973 Oil Crisis. Some countries actually implement the odd- even, including California, Pennsylvania, New York, New Jersey, Oregon, and Texas. Coupons for gasoline allotment were printed but never actually used during the 1979 crisis.

On July 15, 1979, President Carter outlined his plans to reduce oil imports and improve energy efficiency in the Crisis of Confidence speech (sometimes known as the "malaise" speech). It is often said that during the speech, Carter wore a cardigan (he really wore a blue suit) and encouraged the residents to do what they could to reduce their energy use. He has installed solar panels of hot water on the roof of the White House and a wood burning stove in his residence. However, the panels were removed in 1986, reportedly for roof maintenance, during the administration of his successor, Ronald Reagan.

Carter's speech argued that the oil crisis was "the moral equivalent of war". Critics, past and present, have argued that his proposals would worsen the situation, no better. In November 1979, Iranian revolutionaries seized the American Embassy, â€‹â€‹and Carter imposed an embargo on Iranian oil. In January 1980, he issued the Carter Doctrine, stating: "Attempts by outside forces to control the Persian Gulf region will be considered as an attack on the vital interests of the United States." Moreover, as part of his government's efforts in deregulation, Carter proposed the abolition of price controls imposed by the Richard Nixon administration prior to the 1973 crisis. Carter agreed to remove price controls gradually; they were finally dismantled in 1981 under the Reagan administration. Carter also said he would impose an unexpected profit tax on oil companies. While regulated domestic oil prices are kept up to $ 6 per barrel, the world market price is $ 30.

In 1980, the US Government established the Synthetic Fuel Company to produce an alternative to imported fossil fuels.

When the price of West Texas Intermediate crude oil increased 250 percent between 1978 and 1980, the oil producing regions of Texas, Oklahoma, Louisiana, Colorado, Wyoming and Alaska began to experience economic explosions and population inflows.

Other oil user countries

In response to the high oil prices in the 1970s, industrialized countries took steps to reduce their dependence on OPEC oil. Electric utilities worldwide switch from oil to coal, natural gas, or nuclear power; the national government embarked on a multibillion-dollar research program to develop an oil alternative; and commercial exploration of developing major non-OPEC oil fields in Siberia, Alaska, the North Sea, and the Gulf of Mexico. In 1986, global oil demand daily fell by 5 million barrels, non-OPEC production rose to an even greater number, and OPEC's market share fell from 50% in 1979 to just 29% in 1985.

Car fuel economy

At that time, Detroit's "Big Three" automakers (Ford, Chrysler, GM) marketed full-sized cars like Chevrolet Caprice, Ford LTD Crown Victoria and Dodge St. Regis that meets the CAFE fuel economy mandate passed in 1978 Detroit's response to the growing popularity of imported compacts such as the Toyota Corolla and Volkswagen Rabbit are Chevrolet Citation, and Ford Fairmont; Ford replaced the Ford Pinto with the Ford Escort and Chrysler, on the verge of bankruptcy, introduced Dodge Aries K. GM underwent an unfavorable market reaction to Citation, and introduced Chevrolet Corsica and Chevrolet Beretta in 1987 which did a better job. GM also replaced the Chevrolet Monza, introducing the Chevrolet Cavalier 1982 which is better accepted. Ford experienced a similar market rejection from Fairmont, and introduced the Ford Tempo front-wheel drive in 1984.

Checker Motors, known for its iconic Marathon sedan used for taxi livery, stopped its automotive production in 1982 that switched to stainless sheetmetal for GM. American Motors, the last independent manufacturer outside of Detroit's Big Three, entered into a joint venture with Renault in which its mass market cars were sold along with the remaining AMC product line that has declined in sales while AMC's Jeep division made a profit, especially with the introduction of XJ sports utility the downsized ones leading to the destruction of the company (its homegrown compacts dating back to the 1970s - they were abolished in 1983 (with the exception of the Eagle 4WD train making it the final product of the designed AMC) and financial woes with the Renault partnership ending the final independent government.Revult eventually has 100% AMC in 1982 (resulting in the divestment of AM General) until the end of 1986 where they sold AMC shares to Chrysler Corporation. They then absorbed AMC in late 1987 where Jeep division is now part of Chrysler (now FCA car).

Detroit is not ready for sudden fuel price increases, and import brands (especially Asian marques that are mass marketed and have lower production costs compared to British and Western German brands - the rising value of Deutsche Mark and the British Pound resulted in a transition to the revival Japanese manufacturers where exporting their products from Japan at a lower cost would generate profitable profits despite price dumping allegations) are now more available in North America and have developed a loyal customer base - the Big Three of Japan launched their respective advertising campaigns (Honda with the tagline of 'We Make It Simple', Datsun (Nissan after 1984) with the tagline 'We Are Driven', and Toyota with 'Oh What A Feeling' (they run an advertising campaign before 1979 where the company mocked Plymouth Volare with the tagline 'You Asked For It - You Got It ') - lure the traditional Big Three consumers (Subaru at the end The 1970s run an aign advertising camp in which former Big Three car owners drive their products - a TV commercial begins with the tagline 'Ford drive Subaru').

A year after the 1979 Iranian Revolution, Japanese manufacturers surpassed Detroit's total production to be the first in the world. Japanese exports would then replace the previously dominated automotive market by European underclass manufacturers (Alfa Romeo, Fiat, Opel, Peugeot, MG, Triumph, Citroen). Some people will declare bankruptcy (eg Triumph, Simca) or withdraw from the US market, especially behind gray market cars or the inability of vehicles to meet DOT requirements (from emission requirements to automotive lighting). Many imported brands utilize fuel-saving technologies such as fuel injectors and multi-valve engines on top of common carburetor usage. In addition, imported brands use their innovative business ethics, e.g. a just-in-time inventory system but the US Government imposed import quotas in which Japanese brands (later expanded to South Korea and Europe marques) began to divert their operations by opening an assembly plant in the United States (especially the US South where imported cars were unfriendly to labor unions of Rust Belt countries), Canada, and Mexico to produce their mass market cars and light trucks. The Japanese (and then South Korean) brands that assemble their cars on US soil have exterior dimensions of size for domestic counterparts and engine displacement of more than 2.0 liters for the US market (Japanese regulations on vehicle size and engine displacement determine road taxes paid annually which is not practiced in the United States and Canada).

Imported brands also adhere to local content laws in which imported cars must have a percentage of automotive parts (in the United States a car with 70 percent of local content creation is considered a domestic building regardless of manufacturer) sourced from the United States, Canada, or Mexico. (prior to the establishment of NAFTA) and the American Automobile Labeling Act of 1994 mandating the percentage of automotive parts content printed on Monroney stickers from cars sold through dealers. Import quotas resulted in Japanese car manufacturers importing cars in limited numbers but to comply with the imposition of the US Government against the Voluntary Export Termination of 1981, automakers established their respective luxury marques (Acura, Lexus, Infiniti) but each run by their parent manufacturer (Honda , Toyota, Nissan). The Cadillac GM division is experimenting with their V8-6-4 power plant (an ancestor of modern Active Fuel Management and/or variable displacement), which is a market failure. Nevertheless, the overall fuel economy is increasing, which is one of the factors that caused the excess oil of the 1980s.

The Energy Crisis of the 1970's | Fall 2015 | Washington State ...

src: history105.libraries.wsu.edu

References

Source of the article : Wikipedia

1979 energy crisis

Minggu, 08 Juli 2018