Prior to 1970s, the United States and a number of European companies called the Seven Sisters controlled the extraction, export and shipping of oil. In 1973, the Organization of Petroleum Exporting Countries (OPEC) halted oil production and stopped shipping oil to the U.S. and other countries that were supporting Israel’s Yom Kippur War. When the embargo was lifted in 1974, oil prices were four times higher. The OPEC states were enjoying great prosperity and political power while the U.S. was involved in a global oil and gas risk assessment evaluation.
Until 1973, East Texas oil production had been high enough to compensate for any disruption in oil imports. But as the 70s progressed, American oil producers ran out of reserves in the East Texas oil fields. Countries with untapped oil reserves were receiving support from independent oil companies and OPEC countries with vast oil reserves were stepping up to dictate terms, and the U.S. was looking at the very real possibility of an oil embargo.
New energy policies were introduced by President Nixon to boost domestic oil production, but the policies did nothing to mitigate the effects of the 1973 oil embargo. Americans who had believed in a never-ending supply of oil were now faced with the possibility of limited availability. To cope with this threat, President Nixon and President Ford introduced emergency oil conservation measures while Jimmy Carter pushed for conservation, price deregulation and greater reliance on alternative energy sources.
As a result of the energy crisis, countries like the U.S. were forced into an in depth oil and gas risk assessment because fuel prices were getting high enough to trigger a recession. During the 1970s and 1980s, the high price of oil forced importers to explore and develop alternative energy sources, to make changes in global energy policies and to focus on energy efficiency. As an unexpected bonus, policies to conserve energy greatly reduced carbon emissions and helped to lessen the potentially catastrophic effects of climate change.
The 2000s saw great growth in shale gas production thanks to federally funded programs in the 1970s, 1980s and 1990s. This, in turn, was a catalyst for petroleum economics training that led to the development of breakthrough methodologies in drilling, fracturing, mapping and shale gas. Things were looking up until in 1988, NASA climatologist James Hansen created a sensation by announcing that unless something was done about carbon emissions, the world would experience global warming and a catastrophic climate change.
Policies to address environmental issues had been put into place as a result of the oil shock. As it turned out, these policies helped to reduce carbon emissions more than any other measures to date. Since 1973, energy consumption has fallen by 50 percent and petroleum consumption has fallen by 33 percent. Carbon emissions in the U.S. have dropped to .4 percent annually since 1973, and this has helped to lessen the threat of climate change.
In Western Europe, carbon emissions have fallen steadily since 1973. Non-industrialized countries are still seeing an increase in carbon emissions, but because of Western policies and fuel-efficient technologies, carbon emissions have increased at a much slower pace. Carbon emissions were reduced by 30 percent in Asia and by 60 percent in Africa and Latin America.
In 2012, carbon emissions were still too high, so the world is faced with having to reduce carbon emissions even more. But now, reducing these emissions is at least possible, thanks to the environmental policies introduced because of the oil embargo of the 70s.
Rather than hurting us, the 1973 oil embargo helped us to start cleaning up the environment before we even knew there was a threat. It helped to protect us from climate change by addressing a problem that no one saw coming. Even if the environmentalists were wrong about running out of oil, they were right to say that out-of-control oil consumption would eventually harm our planet.
Remembering the oil shock, we can see that treating global environmental issues with energy-efficient technologies and getting governmental support for research can deliver effective results with surprising benefits. The oil crisis and the oil and gas reserves evaluation that seemed so hopeless in 1973 has generated unexpected positive changes all over the planet. We owe our thanks to OPEC. Without the energy crisis, our planet would be in big trouble today and the U.S. would not have the new technology to increase domestic oil exploration.