- New Issue
- Books & Reviews
- About Us
The Myth of U.S. Energy Dependence
What We Got Wrong About OPEC's Oil Embargo
GAL LUFT and ANNE KORIN are Co-Directors of the Institute for the Analysis of Global Security and Senior Advisers to the United States Energy Security Council. They are the co-authors of Petropoly: The Collapse of America’s Energy Security Paradigm.See more by Gal LuftSee more by Anne Korin
The first U.S. energy secretary, James Schlesinger, observed in 1977 that when it comes to energy, the United States has “only two modes -- complacency and panic.” Today, with the country in the middle of an oil and gas boom that could one day crown it the world’s largest oil producer, the pendulum has swung toward complacency. But 40 years ago this week, panic ruled the day, as petroleum prices quadrupled in a matter of months and Americans endured a traumatic gasoline shortage, waiting for hours in long lines only to be greeted by signs reading “Sorry, no gas.”
The cause of these ills, Americans explained to themselves, was the Arab oil embargo -- the decision by Iran and the Arab members of the Organization of Petroleum Exporting Countries (OPEC) to cut off oil exports to the United States and its allies as punishment for their support of Israel in the 1973 Yom Kippur War. And the lessons they drew were far-reaching. The fear that, at any given moment, the United States’ oil supply could be interrupted by a foreign country convinced Washington that its entire approach to energy security should center on one goal: reducing oil imports from that volatile region.
But Americans were wrong on both counts. The embargo itself was not the root cause of the energy crisis. Contrary to popular belief, the United States has never really been dependent on the Middle East for its supply of oil -- today only nine percent of the U.S. oil supply comes from the region. At no point in history did that figure surpass 15 percent. Rather, the crux of the United States’ energy vulnerability was its inability to keep the price of oil under control, given the Arab oil kingdoms’ stranglehold on the global petroleum supply. Nonetheless, for the last four decades, Washington’s energy policy has been based on the faulty conclusion that the country could solve all its energy woes by reducing its reliance on Middle Eastern oil.
Where did this conclusion come from? By the time the six-month embargo was lifted, in March 1974, the global economy lay in ruins. In the United States, unemployment had doubled and GNP had fallen by six percent. Europe and Japan had fared no better, and struggling, newly created countries in Asia and Africa took the worst hits. Countries completely dependent on energy imports found themselves heavily in debt, and millions of unemployed poor had to migrate from the cities back to their villages.