America May Finally Be Learning The Lessons Of The 1970s Oil Shock
Steyer-Taylor Scholar-in-Residence Jeff Ball spoke with PRI's Jon Miller about the correlation between high prices and energy consumption.
Probably a lot fewer of us will remember the date for a much more recent event — the end 40 years ago of the five-month Arab oil embargo of 1973-74.
The embargo was retaliation for US support of Israel in the 1973 Yom Kippur War, and it was a kick in the teeth to a country that had grown to depend on cheap oil.
That should have come as no surprise, says Jeffrey Ball of Stanford’s Steyer-Taylor Center for Energy Policy and Finance. History, Ball says, shows that “people respond most significantly in terms of changing the way they consume energy when, for whatever reason, prices rise.”
Ball says that in Europe, which was also hit by the embargo, governments decided to jack up fuel taxes to keep consumption down. And it worked. Today the French and Germans use about half as much oil per person as we Americans do.
“There’s a saying in energy circles that what Americans really want are hot showers and cold beer,” Ball says. “When you start to ask them to live in a way in which their showers are cooler and their beer is warmer, that becomes a problem.”