How to avoid and WI no 1973 Oil Shock

[LHB]

But if we look at the period literature for any period . . .

I mean, look at newspapers and evening news broadcasts for any week and it will look like the most pivotal week in history of modern democracies and advanced economies!

Which doesn't change that such a climate was influencing decision-making in the period.

You said they were the largest exporter until the late 60s.

Which was also true until the mid 60s. Some level of imports does not negate being a major net exporter especially when you take into account how much of global oil production was also controlled by an ogliopoly of seven oil companies five of which were American.

 

[GeographyDude]

Yes it was. The US was the single largest oil producer in the world until 1968.

I see from the table that the U.S. pumped 9.10 million barrels, compared to a total world production of 38.63.

Yes, we pumped more oil than any other single nation. But since we used about a third of the world's oil each year till about (?) 1990, I can see how we could be the biggest producer but also a net importer.

 

[kernals12]

Which doesn't change that such a climate was influencing decision-making in the period.



Which was also true until the mid 60s. Some level of imports does not negate being a major net exporter especially when you take into account how much of global oil production was also controlled by an ogliopoly of seven oil companies five of which were American.

 

[GeographyDude]

U.S. GDP growth rate

https://fred.stlouisfed.org/series/A191RO1Q156NBEA

Notice that there are four recessions between the late '40s and early '60s. Notice the double-dip recession in '80 and '82. Oh yes, I fully subscribe to the theory that a modern economy is almost biologically complex. But I also pull an analogy from medicine, do a solidly medium step and observe feedback.

 

[kernals12]

What I am sure about is that oil demand would not have continued to rise by 7% per year but unlike OTL it wouldn't flatline. One of the biggest demand-side responses to the rise in oil prices was the near elimination of fuel oil sourced electricity in developed countries. In the US this was responsible for about 40% of the decline in oil demand between 1978 and 1985. Fuel oil had been the most practical way for utilities to lower smog emissions but with the energy crisis they chose to upgrade coal plants or build nuclear reactors. For the car industry, there was already a backlash setting in against "longer, lower, wider", and the Big 3 would be forced to downsize in response to those import compacts.

 

[marathag]

For the car industry, there was already a backlash setting in against "longer, lower, wider", and the Big 3 would be forced to downsize in response to those import compacts.

VW Beetle production peaked in 1971
1970 1,196,099 / 982,629 from Germany
1971 1,291,612 / 1,029,489 from Germany
1972 1,220,686 / 898,282 from Germany
1973 1,206,018 / 860,726 from Germany
1974 791,053 / 423,306 from Germany
1975 441,116 / 111,872 from Germany

https://books.google.com/books?id=ECtwvGWFaTYC&pg=PA593

Show import sales overall were fairly constant at 2.4M a year (with German output dropping as Beetle popularity wasn't matched by the Rabbit/Golf/Type 3/Type 4) but US production was steadily dropping, so it looked like there were more imports being sold, but actually was fewer from Big 4 being sold. It took the 2nd Oil Shock for the real US downsizing to happen on auto size

 

[kernals12]

VW Beetle production peaked in 1971
1970 1,196,099 / 982,629 from Germany
1971 1,291,612 / 1,029,489 from Germany
1972 1,220,686 / 898,282 from Germany
1973 1,206,018 / 860,726 from Germany
1974 791,053 / 423,306 from Germany
1975 441,116 / 111,872 from Germany

https://books.google.com/books?id=ECtwvGWFaTYC&pg=PA593

Show import sales overall were fairly constant at 2.4M a year (with German output dropping as Beetle popularity wasn't matched by the Rabbit/Golf/Type 3/Type 4) but US production was steadily dropping, so it looked like there were more imports being sold, but actually was fewer from Big 4 being sold. It took the 2nd Oil Shock for the real US downsizing to happen on auto size

Ford put the Mustang on the subcompact Pinto platform and GM was already planning on shrinking their full size cars.

 

[marathag]

Ford put the Mustang on the subcompact Pinto platform and GM was already planning on shrinking their full size cars.

Mustang Production
1969 299,300
1970 197,000
1971 149,700
1972 125,100
1973 134,900
1974 386,000
1975 188,600
1976 187,600
1977 153,200
1978 192,400

Number picked up for the '79 Fox Mustangs, as they had lighter weight, while getting some semblance of performance back.

That decision predated the Oilshocks, as the '71 thru '73 on the big Mach I chassis wasn't well liked as a Pony Car, as it was closer in size and spirit to the Torino intermediate.

The pinto Mustangs were never liked much, hardly better than the 'big' one. Ford would have been better off in reskinning the Maverick and calling that a 'Mustang'

The GM B Body full sized were pretty much unchanged from '71 to '77, the 'shrinking on Impalas meant 5" less wheelbase and 10" less overall length, while gaining interior volume, the start of the boxy look at GM, losing no weight for the '78 models

 

[GeographyDude]

. . . One of the biggest demand-side responses to the rise in oil prices was the near elimination of fuel oil sourced electricity in developed countries. . .

'Mapping how the United States generates its electricity,' Washington Post, John Muyskens, Dan Keating and Samuel Granados , updated March 28, 2017.

https://www.washingtonpost.com/graphics/national/power-plants/?utm_term=.e1ed79fcfa6c

' . . . There are 1,076 oil-powered electric plants in the United States. They generated just over half of 1 percent of the nation’s electricity [Emphasis added!] last year.

'Petroleum is no longer a popular source for electricity generation. After the rise of OPEC and the oil shocks and price increases of the 1970s, utilities switched to other fuels, mostly coal. . . '

Yes, U.S. electrical plants use other petrochemicals, but oil itself is half of 1 percent!

 

[Infinity]

Less profitable shale deposits could be subsidized by the government. Cars could be made smaller. More oil pipelines could have been built earlier. American oil companies could have increased output and had smaller profit margins right before the crisis. Saudi Arabia could be invaded. Any one of these options is sufficient by itself. The pipeline option can become particularly attractive with favorable Canadian policies.

 

[kernals12]

Yes, U.S. electrical plants use other petrochemicals, but oil itself is half of 1 percent!

It was 15% in 1978, which is the time period I am referring to

 

[GeographyDude]

It was 15% in 1978, . . .

I agree that the '70s were a pivotal decade, but the next couple of graphs will be for the present.

 

[GeographyDude]

https://www.washingtonpost.com/graphics/national/power-plants/?utm_term=.e1ed79fcfa6c

in 2017, natural gas was number 1, generating 34% of the U.S.'s electricity.

 

[GeographyDude]

https://www.washingtonpost.com/graphics/national/power-plants/?utm_term=.e1ed79fcfa6c

(in 2017) Coal was number 2, generating 30%.

 

[GeographyDude]

https://www.washingtonpost.com/graphics/national/power-plants/?utm_term=.e1ed79fcfa6c

(in 2017) And nuclear was number 3, generating 20% of the U.S.A.'s electricity.