OPEC Versus the Oil- Consuming World
Fuel-oil companies in the United States used to come around in the summer and clean the furnace free. In 1974, after the Arab oil boycott and the beginning of the energy crisis, they sent notices offering the service for $28. They also began imposing a service charge on customers who did not pay their bills within thirty days. This rude turnabout, not to mention the manifold jumps in the price of heating oil, illustrates many changes in American business and in personal lifestyles that have resulted from the Arab oil embargo with its fivefold markup of oil prices within a year.
Thus ended the long era of cheap energy that had helped propel America to industrial and political greatness. Energy touches all aspects of economic life. OPEC's savage price increases plus the awareness of the oil- consuming countries that foreign supplies can be uncertain have also hiked the price of coal. Electricity costs, especially those of coastal utilities that burn imported oil, have rocketed, as customers from Maine to Florida know all too well.
At the gas pump, prices in the United States averaged $1.35 a gallon for regular gasoline in 1982 compared to 39.7 cents in October 1973, when the Arab oil embargo began. The embargo lasted for five months, from November 1973 to March 1974, but the energy crisis that ensued left its permanent imprint on our everyday lives. By an act of the U.S. Congress, the highway speed limit is fifty-five miles an hour in order to conserve gas. The President has asked the people to form commuter car pools, to walk, or to ride a bicycle for shorter trips, and overall, to drive 5 percent less--all for the sake of reducing the country's oil imports from and dollar outflow to OPEC nations. "Even for America, a continental nation that has fancied itself a land of plenty, scarcity is the new reality." 1