Ecomomic change (oil crisis, energy, government response and foreign competition)

Origins of US Energy Vulnerability

The US transitioned from energy self-sufficiency to an energy deficit situation.

US Population vs. Energy Consumption Statistics

The US had 6% of the world's population but consumed 1/3 of the world's oil production.

US Reliance on Oil Imports

Approximately 30% of US oil had to be imported, mostly from the Middle East.

Impact of the 1973 Yom Kippur War

Nixon's support of Israel led to an OPEC oil embargo on the US.

Immediate Post-Embargo Price Hike

The end of the 1973 embargo was followed by a 387% increase in the price of oil.

Post-Crisis Consumer Cost Shift

Americans paid approximately 30% more for heating oil and petrol following the initial crisis.

Oil Price Increase (1973–1979)

Oil prices rose from $3 a barrel in 1973 to $34 a barrel by the summer of 1979.

Impact of the 1979 Islamic Revolution

The fall of the Shah led to a doubling of global oil prices.

Primary Causes of 1970s Stagflation

Rising federal debt, foreign manufacturing competition, and OPEC quadrupling oil prices.

US Oil Import Value (1970 vs 1980)

Imports rose from $4 billion in 1970 to $80 billion by 1980.

Role of Cheap Oil in US Prosperity

Cheap oil was vital to post-WW2 economic growth, industry, and socially transformative suburbanisation.

Oil Costs and Inflation

Probably 1/3 of the alarming rise in prices was due to the increased cost of oil.

1974 Independent Truckers' Strike

100,000 truckers struck for 11 days, bringing roads to a standstill and leaving store shelves empty.

Winter of 1976-77 Energy Impact

Natural gas shortages forced the closure of schools and factories, especially in the Eastern USA.

The Levittown Energy Riot

The first American energy riot where truckers barricaded expressways, leading to 100 injuries and 170 arrests.

1977 United Mine Workers Strike

A 3-month strike leading to coal shortages, school closures, and shortened work weeks in the Eastern USA.

1979 Petrol Station Crisis

Half of the nation's stations were without fuel; those that had it charged 50% more than the year before.

GNP Decline (1973–1975)

US GNP dropped by 2.5% in early 1973 and fell another 3.2% in the winter of 1974-75.

US Global Manufacturing Share (1970s)

The US produced 25% of the world's manufactured goods but struggled against rivals like Japan and Germany.

1978-79 US Trade Deficit

The annual trade deficit reached approximately $40 billion.

Japanese Auto Market Share (1981)

Japanese companies captured 23% of the US automobile market.

"Gas Guzzlers" vs. Foreign Imports

US sales fell as manufacturers made fuel-heavy cars while Japanese cars were smaller and more economic.

1974 "Big Three" Layoffs

The major US car manufacturers laid off 224,000 workers due to falling sales.

Chrysler Government Bailout (1980)

Chrysler lost billions and required a $1.3 billion federal bailout.

Detroit Unemployment (1980)

Unemployment in the car manufacturing hub reached 24% by 1980.

"Nation of Hamburger Flippers"

AFL-CIO term for the decline of skilled manufacturing and the rise of low-paid service industry work.

President Ford’s "WIN" Campaign

"Whip Inflation Now" — a voluntary program asking Americans to cut mileage by 5% and reduce food waste.

Omnibus Energy Act 1975

Allowed domestic oil prices to rise slowly to discourage consumption while helping end the recession.

Political Impact of the Crisis

The "insolvable problem" of energy added to public disillusionment and political instability.

Carter’s 1977 Thermostat Suggestion

Thermostats were to be set to max 18°C in winter and air conditioning only after 26°C in summer.

Carter's 1977 Energy Programme Proposals

Suggested oil conservation, alternative power (nuclear/solar), and higher taxes on large automobiles.

Reasons for Carter's Legislative Failure

Insufficient lobbying, opposition from oil-producing states, and voter refusal to change lifestyles.

Department of Energy (1977)

Created to promote conservation and the search for alternative energy.

Three Mile Island Impact (1979)

A nuclear meltdown in PA that made Carter’s push for nuclear power highly unpopular and sparked protests.

Energy Security Act 1980

Offered loans and incentives for alternative fuels like synthetic, alcohol, and biomass energy.

Final Energy Consumption Result (1979-83)

Per capita consumption of energy decreased by 10%.