This October marks the 40th anniversary of the 1973 Arab oil crisis. Although the price of oil is still quite volatile in todays markets, we no longer see anything close to the supply disruptions caused by the original oil crisis. For those of us who weren't around in 1973, it can hard to imagine the impact on everyday life that the oil embargo had at that time. However, whether we realise it or not, we all experience the political and economic aftermath of the oil crisis in our everyday lives today.
There are many causes that contributed to the 1973 oil crisis but the trigger was definitely the brief Yom Kippur war which pitted Israel, backed by the US, against Syria and Egypt. In retaliation, the largely Arab based OPEC increased international oil prices by 70% over night. This caused a huge shock to oil importing countries in North America and Europe that had been used to relatively stable oil prices. Western countries responded with a number of measures that are still with us to this day.
In the US, where the OPEC action was most felt, President Nixon declared the lofty goal of making the US "Energy Independent". He failed of course, as did all subsequent American presidents; each one of them repeating the promise to make the US energy independent. Nixon did however make some inroads into America's "oil addiction", as George W. Bush would later put it.
To start, he imposed the national speed limit of 55 mph which is still prevalent through most of the US. Most people today believe this speed limit was set for safety reasons, but it was actually set to maximise fuel efficiency. Second, he introduced strict Corporate Average Fuel Efficiency (CAFE) standards on all vehicles sold in the US. These CAFE standards are what allowed the now ubiquitous smaller Japanese cars like Honda and Toyota to make their first beach head in the American market. They were also responsible for bringing us the Pinto, and for neutering the once mighty Mustang into the miserly Mustang II.
Here in Canada we also adopted 55 MPH speed limits as well as American CAFE standards which still dictate Canadian fuel economy requirements. But the oil crisis' unique impact on Canada was its impact on East/West political relations. Alberta's oil industry was just coming into its own in the 1970's. When the oil crisis arrived it severely impacted the manufacturing and processing economies of Central and Eastern Canada. In response, Pierre Trudeau imposed the National Energy Program which attempted to siphon oil from Western Canada to Eastern Canada at below market rates. The Liberals suffered heavily at the polls in Western Canada due to the National Energy Program and have yet to recover.
It is a sign of just how important oil is to the global economy that a war that occurred 40 years ago, on the other side of the world, and that lasted less than three weeks in total, could have a significant impact on our everyday lives today here in northern BC. But it is true that our speed limits, our efficient vehicles, on to a certain extent our political climate here in Western Canada can all be traced back to that 1973 oil crisis.
