"You have to be there!" was tagline on all the commercials. And since it was just up the road in Knoxville, Tennessee, a lot of us from Alabama were there!! The theme was "Energy!" and you have to remember this was after 10 years or so of energy shortage - starting more or less with the oil embargo of 1973, in which we all learned what OPEC meant. From 1973 to 1982 the price of gasoline, which is the primary metric for energy costs for most Americans, rose from around 35 cents/gallon to $1.20/gallon (more or less, depending on where you were). Now, I know most of us look back fondly on $1.20/gallon gas, but to comprehend the impact of it, just think of how many people were pumping $1.20/gallon gas in 1982 and remembering $0.33/gallon in 1971 and $0.28/gallon in 1959. It contributed to the general feeling that we were all being ripped off, by OPEC and the oil companies, as well as more disturbing feelings that the party was over and the future looked dim. The Oil company folks were worried, in good faith, that they could not meet demand after the tight markets of 1969-72.
In 1982, Energy! was enough of a sore spot to make it a hook for advertising. So the national exhibits generally had some kind of energy theme - The US pavilion had solar hot water heating; TVA had a solar house exhibit; the UK pavilion had Diana Spencer's (that's Princess Di to you, Bubba) car - a British Ford Fiesta if memory serves; the Chinese had a solar-powered dragon boat and propane from marsh gas; the Saudi pavilion was all about how much oil they were pumping; the French paviiion was about the TGV train and their nuclear fast-breeder reactors, and so forth. In fact, in 1982 oil consumption was down about 20% from its peak in 1977 - partly because of the recession, partly because of industrial process improvements but also from dramatic increases in automobile fuel economy coming first from imports, and then from Detroit, responding to the 1979 spike in fuel prices. There were all those Honda Civics getting up to 50 MPG, the Datsuns, Renaults and Toyotas in the 40-45 MPG range, the GM X-cars, Ford Escort, and Chrysler K-cars in the 40 MPG range, and then the champion was the VW Rabbit Diesel, rated by the EPA at 61 MPG. There were wind farms being built in mountain passes in California, heliostats (solar radiation concentrators) were being built in the deserts, and lots of houses had solar hot water heater panels on the roofs. It looked like people were buying into change and attitudes were adjusting.
So, 25 years later, where the hell are we? Gasoline and Diesel are certainly more expensive, and the oil supplies are if anything more precarious. 72% of the oil America uses goes to gasoline, diesel, or jet fuel. (That is why I am harping on vehicle fuel economy!) We now use 33% more oil than we did in 1982 and we have to import around 60% of it, compared to about 25% in 1982.
See figure 2 for total consumption and imports
Consumption by fuel type
Some of that is due to the population, which increased 29% from 232 million to 300 million (2006 estimate). However, this looks like we're burning more oil per head than we were in 1982. It is even worse than it looks, because in 1982 the transportation use was 61% of the total oil used. So, although we make less steel, less aluminum, less manufactured products in general, and we generate electricity with coal, gas or nuclear rather than oil, we're still burning more oil per person than 25 years ago. The trend is NOT positive - unless you're selling oil.
What Happened?
Where happened to the conservation ethos that was going so strong - not only as an advertising theme, but as a reflection of actual behavior?!A couple of things: Ronald Reagan and the price collapse of 1986.
Ronald Reagan happened.
Even by the time of the 1982 World's Fair, the handwriting was on the wall. Early on, Reagan slashed renewable energy research funding and even had the solar panels on the White House roof (installed by Carter) removed. The contempt for conservation was blatant and deiiberate because conservation and sustainable energy development were in direct conflict with the conservative message that Reagan campaigned on: America had plenty of energy, the government just had to get out of the way and let the markets work their magic. And if you worry about long term sustainability, well, you just don't have enough faith in the Free Enterprise system! Besides, details are for left-wing professors and dirty hippies.
This may have not been the first conservative "clap louder" prescription, but it was a big one. Everyone, just calm down, take deep breaths, don't worry your beautiful minds about long-term living, the free market will take care of everything! This was definitely what many Americans wanted to hear - that we could still have all we wanted for not much. Turn up that thermostat and party like it was 1966.
In 1982, no one ever had heard of a Hummer, and the Chevy Suburban was about as big as you got. Soon after, however, Detroit started taking advantage of a loophole in the CAFE (Corporate Average Fuel Economy) standards to offer bigger vehicles - namely, a lower standard applied to light trucks. This was a well-meaning exception to keep from penalizing working folks who needed to haul stuff, but it was an exception to drive an Escalade through.
What we now know as Sport Utility Vehicles (aka SUV's) were grandfathered in as light trucks. It started innocuously enough with the Bronco II (based on the Ford Ranger small pickup), the Jeep Cherokee, and the Chevy Blazer (reincarnated on the Chevy S10 chassis) and all the minivans - Aerostars, Astros, Caravans, and Voyagers. Between the 4-wheel drive macho appeal and the family-hauler appeal of the minivans, the foundation was laid for the notion that a family HAD TO HAVE a high-clearance vehicle with three rows of seats. And because they were covered by the lower CAFE standards, Detroit could pile on as many features, as much size, and as much weight as people would buy. Once again, Detroit could sell the heavy metal they loved, because as Henry Ford II said, "Small cars, small profits"! He might as well have said "Big vehicles, big bucks"! Maybe he did.
But, certainly, these civilian tanks were monstrously expensive to drive, weren't they? If high gas prices scared people away from big cars in the late 70s/early 80s, why didn't it scare them away from minivans and 4WD's in the mid-to -late 80s?
The oil prices collapse of 1985-86 happened.
The oil price shocks of 1973-74 stimulated exploration and production, and the price shocks of 1979-80, when the poor old Shah bit the big one and Iran quit pumping for awhile, reinforced them. Oilfields in Texas, New Mexico, Wyoming, Oklahoma, Louisiana, Canada, Mexico, the North Sea, and places around the world went nuts with exploration, while if you had an operating field you opened up the spigot wide as it would go (specially if you had to pay for a war, like Iraq and Iran both did). The Alaska pipeline came online in 1977 and ramped up delivery rapidly.
This follows the Basic Economics story, in which shortage produces price increases which stimulate production. And with all those rigs-a-drillin', the blind hogs found acorns. So, along about 1981 or so more oil started coming on line for sale, worldwide, hoping to cash in on the $30-$34/bbl prices that looked like the future in 1980. At the same time, demand was falling substantially, due to the higher-mileage vehicles, successful industrial conservation efforts, and the double-dip recession of 1981-82. Then, they second installment of the Basic Economics story kicked in, namely, price falls until demand and supply are balanced. Supply was up, demand was down, and in this case, balanced happened at around $18-$21/bbl, after a period of pain, scheming, and conniving, in early 1986.
See figure 3 for price history (nominal prices used)
If you had invested a lot in oil shale (like Exxon did), or long shot drilling for $30/bbl oil, or Houston/Dallas/Denver real estate, it was not pretty. (Unless, you were named George W. Bush - Have a look (hat tip to BenGoshi)) Gasoline prices stopped rising and began falling in 1981 and continued to fall through 1986. They never fell very far below $1.00/gallon, but they hung around that for several years - long enough for people to get used to $1.00 gas.
Once people had learned to live with $1.00 gas, the fear factor about the future evaporated, and they were happy to listen to conservative con artists tell them there never was an energy shortage and that conservation was a conspiracy by people who hated America. Besides, in the future, we'll all be dead. Kind of like global warming deniers now.
So, when faced with declining energy supplies, people's response divided into three groups:
- Let's change our lives a little bit to do as well with less, and maybe do more with less
- Let's cash in on shortages - suck in the investors looking for a quick buck
- Energy supplies aren't declining. Clap louder. If we need more we can invade some country and steal it.
Obviously, the last two choices have been tried so far. We've lost 25 years, trying "market-based" approaches. But we have learned that the market seeks the highest return RIGHT NOW DAMMIT, not the long term growth potential. If something comes along that looks promising enough to threaten the status quo, fuel prices can be manipulated to run low until the interloper goes bust. After which, newcomers remains can be bought up for pennies on the dollar and reintroduced whenever the price is high enough.
Those are your corporate solutions.
We might have been onto the third generation of hybrids by now, using second-generation biofuels, and grid integration. Oh, what might have been... But wait a minute - the industrial part of conservation DID take, and the energy savings amounted to 2B bbl/year in 1982 (according to Daniel Yergin in The Prize, sorry, no linky), which was the same amount that the Alaska pipeline delivered!
Trouble is, there are a couple of things headed our way that are not affected by spin, high finance, or con artists: global warming and Peak Oil
If we don't start learning to live well without using as much oil now, it will be that much harder when the real crunch hits. We need to get it right this time.
Crossposted at Left In Alabama