Energy Literacy Advocates Newsroom

Fears of an energy crisis, according to columnist Gerald Seib, mean 2008 Presidential candidates must grapple with answers neither easy or cost-free. Yet Seib notes that America is not without historical examples in overcoming energy issues, and contends that the oil shock of the mid-1970s, and the Arab oil embargo of 1973 offer valuable lessons to today's policymakers.

Then, as now, a weakening U.S. dollar placed upward pressure on oil prices, eventually leading to a quadrupling in cost. While attempts at government price controls on oil proved, historically, to be a particularly bad idea, Sieb cites two government steps which were effective: first, an increase in energy supplies, and secondly, policies aimed at reducing consumer demand. The 1970's saw the creation of Corporate Average Fuel Efficiency (CAFE) standards, which required auto makers to produce fleets that got better gas mileage. The standards required that new-car gas mileage, on average, double over the following decade. When combined with a national speed limit set at 55 miles-per-hour, CAFE standards helped lower demand for oil by 2 million barrels per day.

While energy transition is not simple or quick, improvements in America's energy portfolio combined with increased efficiency have proven historically useful in lessening a crisis. To read more about the policy precedents of the 1970's and potential contemporary applications, click here.

Labels: election 2008, energy policy, oil supply/demand, u.s. energy policy