Lessons from the 1970s Energy Crisis Can Help Prevent the Next One

The gas shortage of a half-century ago still has U.S. politicians chasing the chimera of energy independence. A better solution: integrated, transparent global markets

Fifty years ago this month, Arab members of the Organization of the Petroleum Exporting Countries cut off oil shipments to the U.S. in retaliation for American support of Israel during the 1973 Arab-Israeli War. The resulting energy crisis shocked the American people and rocked the economy. Iconic images of boxy sedans and wood-paneled station wagons lined up for miles at the gas pump were seared into our national memory. Even the White House Christmas tree was not spared, remaining unlit as a sign of austerity.

The shock of the Arab oil embargo has shaped nearly every aspect of American energy and foreign policy for the last half-century. The specter of petrostates using oil as a geopolitical weapon has haunted politicians and led to an obsessive quest for “energy independence.” Such fears were allayed during the recent shale boom, which turned the U.S. into a net energy exporter for the first time since 1952, but they have been revived by Russia’s invasion of Ukraine and coercive energy tactics against Europe. The need for the world economy to make a transition to clean energy has further complicated the landscape.

In response to these uncertainties, many leaders have reached for policies from the 1970s. They are resuscitating schemes for price controls, calling for energy independence and raising alarms about imports. But the energy risks of that era were very different from those we now face: the growing rivalry between the U.S. and China, rising forces of fragmentation and protectionism, the disorderly dash to move from fossil fuels to clean energy, and the physical impacts of climate change. As the world marks the 50th anniversary of the embargo, leaders need to be cleared-eyed about the lessons of 1973.