In 1973/4 a combination of Middle East conflict and concerted action by OPEC pushed up oil prices dramatically - almost five-fold in two years. Prices doubled in just one month at the end of 1973. Oil had been relatively cheap since the Second World War, and industrialised nations had become dependent on supplies from international markets. The price increase had serious short-term economic effects, and also raised questions about national and global longer-term dependence on finite fossil fuel reserves.
Even before this first oil crisis, oil producing nations had started to assert their collective power and Western governments were beginning to take the issue of import dependence seriously. However, the events of 1973/4 propelled major policy responses in the industrialised countries. In 1974, the US government launched Project Independence, a plan which aimed to make the US self-sufficient in energy by 1980 and the European Commission outlined new energy policy objectives, including reducing import dependence to 40 per cent of energy needs and constructing 200 gigawatts (GW) of nuclear capacity.
In retrospect many of the policy proposals made at this time were an overreaction, based on very high forecasts of future demand and over-optimistic assessments of the economic viability of new technologies. Project Independence was rather quickly shelved and the European energy objectives were not underpinned by adequate policy commitments. In Europe, the 40 per cent target was met, but only as a result of stagnant energy demand and the development of North Sea oil and gas reserves. US and European investment in nuclear power was stimulated, but less than 70GW of capacity was built. The urgency of the energy crisis dissipated fairly rapidly, and was only marginally rekindled when oil prices again rose sharply at the end of the 1970s. However some countries did take the opportunity to bring about major changes in their energy mixes - most notably France and Denmark.
France was able to sustain a nuclear programme that brought about a major transformation of the country's energy balance. This was achieved by a strong central state with a commitment to economic planning and direct state investment in infrastructure, partnered by a powerful state-owned electricity company with close links to the country's heavy electrical engineering industry. Denmark embarked on a rather different, but arguably no less radical restructuring of its energy economy in the mid-1970s with the installation of combined heat and power (CHP) and district heating networks in most urban areas and a major expansion of renewable energy. The Danish approach was based on a more consensual style of politics, working with local authorities and a more decentralised energy sector.
Much has changed, of course, since the 1970s, but fears over dependence on fossil fuels, whether for economic or environmental reasons, are once again high on national and international agendas. Some parallels to the way issues were framed in 1970s can be drawn in the contemporary debates about 'peak oil'.
Was this article helpful?
Your Alternative Fuel Solution for Saving Money, Reducing Oil Dependency, and Helping the Planet. Ethanol is an alternative to gasoline. The use of ethanol has been demonstrated to reduce greenhouse emissions slightly as compared to gasoline. Through this ebook, you are going to learn what you will need to know why choosing an alternative fuel may benefit you and your future.