Good morning, folks.

I had a bump of curiosity this morning, kind of goaded on by report from the Ark Institute.

Now, I know that the Institute has an agenda. We all do. But I found the following information on a government web site that scared the hell out of me.

In 1995, the TRANSPORTATION sector of our economy used 68% more oil than was produced in this country. 97% of the energy used in the transportation comes from oil.

Please go to the following URL for this and more information:

http://www.ott.doe.gov/facts/archives/fotw16.html

http://www.ott.doe.gov/facts/usage.html

So, if we lose any significant percentage of our imported oil, SOMEONE is going to be faced with some pretty horrific choices.

The considerations to be balanced include:

National Defense

Food Production and Distribution

Utilities

Manufacturing

Civilian Usage

I believe that the above, of necessity, will be the approximate order of priority. How else could it be? Think of WWII.

Buy bulk foods, folks. Even if it is animal grain like corn, wheat, soybeans, oats. It's going to be ugly if we do lose half or two thirds of our imported oil.

We will be in the 7 lean years starting next year.............

-- mushroom (mushroom_bs_too_long@yahoo.com), October 20, 1999

Answers

Sorry, just wanted to throw in one more nugget of info from the same site.

In 1994 (apparently the last date with accurate statistics, heavy trucks consumed 3.76 quads (don't know what that measurement means, sorry) of oil, compared to a TOTAL of only 3.008 quads used by BOTH residential and commercial buildings AND **UTILITIES**!!!

Folks, this is mind boggling.

-- mushroom (mushroom_bs_too_long@yahoo.com), October 20, 1999.

I think you've come up with the single most critical link in our whole integrated, intermingled mess. Was talking to the wife last night and made the comment that our current ways are likely more dependant upon oil than it is on computers.

There was a thread a few days ago that stated that the gas shortage in the early 70's was the result of like a 2% drop in availability.

-- BH (silentvoice@pobox.com), October 20, 1999.

There was no gas shortage in the 70's, it was a ploy by the oil companies to raise the price of gasoline. Inflation was rampant, and the tax on gasoline was needed buy the government, the same as taxes for cigarettes today. However, the next oil crunch will not be artificially manipulated, it will be for real. We have to consume oil to keep this world turning because everything we use in some way or fashion needs oil. Japan is worse off than us, and in a way, so would Iran and Saudi Arabia is we do not get the oil. I don't think the Arabs want to be sitting there with black gold and no income to feed their people. I believe there's enough oil coming from Alaska, Mexico, and reserves to keep things going here in the US so we don't have all of our chickens in one basket. Time will tell and it's not a pleasant thought.

-- got gas? (gotgas@gotgass.xcom), October 20, 1999.

***

got gas said:

"There was no gas shortage in the 70's, it was a ploy by the oil companies to raise the price of gasoline."

***

Have you got a reference for that?

I don't recall anyone else EVER making this claim.

As I recall from the time period, the Arabs oil states shut off a large part of the supply to us, period, net no discount, end of story.

***

-- no talking please (breadlines@soupkitchen.gov), October 20, 1999.

The claim that there was no shortage has been around for a few years and was based on the fact that the average American was uncertain about future oil supplies and topped his or her tank, rather than letting the little light come on. If Americans had kept their tires properly inflated and not changed their behavior, then the shortage would not have resulted in a quadrupling of gas prices.

This is like saying that there would be no bank run if everyone left their money in the bank.

I bought extra gas 6 months ago and now just rotate out my supply. I won't be contributing to higher prices, but that doesn't mean others won't when the crunch comes.

-- nothere nothere (notherethere@hotmail.com), October 20, 1999.

Folks, I'm not the forum police or a Sysop.

That said, I don't give a rat's ass whether there was a "real" gas/oil shortage in 1974 or if it was manufactured.

I've been running scared on this for a year now. I have not *quite* bought into the massive dieoff scenarios.

Until now.

I did some quick research this morning. Here are some local prices for basic grains. No, not in fancy buckets, just food in 50 pound sacks.

Corn: 50 lb. sacks $2.23

Wheat 50 lb. sacks $2.50

Soybean Meal: Per 100 pounds $10.25 (they will sack it up, may cost a bit more)

Oats 50 lb. sacks $3.91

Think here. For under $400, you could have 6,000 pounds of food. That's roughly 18,000 to 24,000 "people days" of food. That's a lot easier than worrying about neighbors "coming after" your preps....... Safer, too.

The government is going to HAVE to go to a state of emergency. Do you seriously see any other option?

You can be part of the solution in your area. Or not.

-- mushroom (mushroom_bs_too_long@yahoo.com), October 20, 1999.

Our favorite agricultural economist, kenny decker, has the following "lesson" for us on the subject of oil, transportation, and food: "Jeanne,

Call me when you understand market economics. The domino analogy is badly flawed. Capitalism is redundant. The market re-allocates resources based on supply and demand. A shortage of oil does not mean you or I will starve... it simply means we will pay more. Perhaps you'll have to buy less of another good... c'est la vie."

Jeanne, Oh, great. Another homesteader ready to lecture at the LSE. Do you have any idea how much oil we squander? Do you think if there were a shortage the SUV drivers would take precedence over farmers? Do you think the strategic oil reserves would be used for Sunday drivers? Do you realize how a substantial price increase would move domestic wells (currently unprofitable) back into production? Do you think anyone is practicing conservation given the unusually low energy prices?

Here's a clue, Jeanne... in the event of an oil "crisis," the price of goods (including food) will increase. There is nothing magical about farming. The farm is a business producing food for the marketplace.

Like any business, when the price of production rises, a price increase is passed to consumers. Unless people decide to stop eating, they will pay increased costs. In some items, there may be shortages, but right now we have wheat rotting in the fields due to low prices.

People are not going to eat more during an oil crisis... they are just going to pay more. We have far more productive capacity in American farming than we need. We have simply kept marginal farms in production through ag subsidies.

Your writing suggests a shallowness of thinking about agriculture and economics. I'll be eating cake next year, Jeanne, and you are welcome to a piece if you stop by. " In other words, kenny is saying that we won't have a food problem....we may have a teeeny money problem though(not enough money in our pocket to pay for the food we need). High prices will cure the food shortage problem!!!! Isn't that just the most clear cut example of an elitist view of the world....let them eat cake!!! My little world won't be affected by the miseries of the underclass!! I'm a little more worried than kenny about oil, transportation, and food. We are in for some rough times in my opinion - for at least the next couple of years.

-- jeanne (jeanne@hurry.now), October 20, 1999.

Mr. Decker, although a pleasant person to exchange emails with, does not get "out of the box" too well.

Plus I have found him using quotes (as in ideas and discussions, not revealing identities or entire exchanges) on this forum from private emails between us without giving me the credit. [BG] Oh, well, plagarism is a compliment, isn't it?

I do so hope he is absolutely correct.

My BEST CASE scenario for the next couple of years is to see the US economy in about the same shape as that of Russia's right now. With a jury rigged "command structure" struggling to get things "back to normal".

"Never have so few wished so hard to be completely wrong"

-- mushroom (mushroom_bs_too_long@yahoo.com), October 20, 1999.

The long lines at gas stations in 1974, in addition to a small reduction in imports, were due to people trying to keep their tanks topped off at all times. Very few of the vehicles in those long lines were anywhere near empty, according to interviews with the drivers conducted while they waited (and idled their engines!).

In Texas, there weren't any lines. And given the geographical bias of the major media, if the lines had been in Texas and not New York, the whole issue would have received much less publicity. In 1974, Texas was regarded by the media as "one of those big square states out there where nobody ever goes."

-- Flint (flintc@mindspring.com), October 20, 1999.

Some interesting sites came up when I put "Arab AND oil AND embargo NEAR 1974" into Alta Vista. There were about 230 hits, too many to mention, definitely worth investigating. The following cold link might work for the first page:

http://www.altavista.com/cgi-bin/query?pg=aq&bd=cpqcon&kl=XX&r=arab+oi l+embargo+1974&q=arab+AND+oil+AND+embargo+NEAR+1974&d0=&d1=&search.x=2 1&search.y=6

-- Old Git (anon@spamproblems.com), October 20, 1999.

Flint said. "In Texas, there weren't any lines."

As a life long Texan, I assure you that is not true.

-- Will Huett (willhuett@usa.net), October 20, 1999.

I remember a few things from that gas "shortage". There were even and odd days. The last digit of your tag would indicate which days you could get gas. I have the feeling I haven't seen the last of that in my lifetime, but once was DEFINITELY enough for me. I used to live on the out-skirts of Baltimore and I guarantee you there WERE lines and most folks I saw did NOT have their engines running. In fact, I remember a lot of folks including myself who'd turn off the engine at particularly long traffic lights. Didn't do it all the time of course.

I went out to the driveway to see how our household would make out if the even odd routine was put into effect. We have 2 evens and one odd.

Remember seeing the old Bugs Bunny cartoons where he'd say..."Is this trip really necessary?" Remember that saying...grin.

Almost forgot my most memorable moment from that period. Some friends and I had planned months ahead for a 7 day ski vacation in Vermont. We had already paid our money up front. We got to Hartford, Conn. and realized we would not make it to our destination unless we got more gas. We pulled into a gas station and the guy held his hands in the air and said, "We're ALL out." We pulled out onto the road and stopped at the traffic light at the corner of the station. Any guesses what happened next? A local yocal pulls up at the very same pump and the VERY same man came out and pumped the gas for them. Burns me up just thinking about it. Remember this too...you may be seeing something like this up close and personal if there's another gas "shortage".

beej

-- beej (beej@ppbbs.com), October 20, 1999.

Paging RC and Dog Gone!!!! Have either one of you had any more news from your sources in the Mideast???? Good or bad...please pass it on! (hope you check into this thread!!)

-- jeanne (jeanne@hurry.now), October 20, 1999.

Seems to me, I remember reading articles that stated different parts of the country experienced their gas lines at different times. Gas shipments were routed to certain areas so as to try to manage or manipulate the "crisis".

Someone here surely has more info this bit of Americana.

sdb

-- S. David Bays (SDBAYS@prodigy.net), October 20, 1999.

From the Middle East Times:

http://www.metimes.com/issue98-42/opin/the_arab_embargo.htm The Arab embargo - from oil crisis to OPEC crisis Richard Mably LONDON

A quarter of a century after the Arab oil embargo, the West's lingering nightmare that the petrol pumps might again run dry has scarcely felt so remote.

Awash with oil, the once-mighty OPEC cartel now suffers the lowest real crude prices since it tipped the world's leading industrial powers into crisis in 1973. Saudi Arabia's King Faisal sanctioned the embargo on 17 October that year to punish the West for its support of Israel in the Arab-Israeli war that started 11 days earlier.

Oil prices quadrupled, scarring the economies of the West for years with recession, inflation and unemployment. The Organization of Petroleum Exporting Countries (OPEC) ushered in the era of shared baths, power cuts and little stickers urging consumers to "save it."

Twenty five years later, in the worst oil glut for a decade, it is OPEC that is feeling the backlash of the first oil shock. This year's severe glut is only the latest in a series caused by persistent oil market overcapacity, partly a consequence of the 1973 embargo. Sheikh Zaki Yamani, the mastermind behind Saudi oil policy at the time, admits mistakes were made.

"I think we were intoxicated in the seventies and some major consumers helped us dig our grave," the former Saudi oil minister told a recent conference in London. Vowing not to be caught out again, the West invested in its own oil. The major companies, sent packing by the nationalizations which swept OPEC producers, invested heavily in regions like the North Sea. New technologies were invented to slash the cost of finding crude. Power generators in nations without oil turned nuclear and then increasingly to cleaner fuels like natural gas. Consumers also became more efficient. High taxes in most parts of the industrialized world, with the exception of the US, have replaced high prices as the incentive for efficiency gains. In Europe, tax now counts for more than 80 percent of the price of gasoline. European motorists pay $185 a barrel at the pump for gasoline which fetches $17 a barrel at the refinery gate. Oil demand growth this decade has been quelled to little more than two percent a year, from seven percent annually in the 20 years before the 1973 embargo. Stagnating demand and this year's low prices have already started to reshape the structure of the oil industry.

Shell chairman Mark Moody Stuart has predicted that oil prices, having averaged $18 a barrel over the past 10 years, could stay depressed at $12-$16 in the medium term.

"Financial instability has already taken a toll on the oil industry in terms of lower demand growth," warned Franco Bernabe, chief executive of Italian energy giant ENI.

The giant merger of British Petroleum and Amoco Corp is expected to spark further consolidation among companies keen to cut costs.

"Lower cost is the driving force for big oil," said analyst Fadel Gheit at Fahnestock and Co.

"It is a mature industry with slow or no growth. There is no question that we are at a turning point and oil companies can only merge." Meanwhile, the big Gulf oil states are starting to welcome back the multinationals they shunned two decades ago. OPEC ministers, by the time of the second oil shock in 1979 in the aftermath of the Iranian revolution, were able to force prices to $41 a barrel.

Now the free market writes the rulebook and oil is back around $14. Flickering futures screens and financial derivatives dictate market direction.

"The interplay of commercial, political and economic forces has fundamentally altered," said Robert Priddle, executive director of the International Energy Agency, set up by the industrialized powers to safeguard energy security in the wake of the 1973 embargo.

"Market forces have overwhelmed the institutions which were created to manage them." Past oil shocks were caused as much by the fundamentals of supply and demand as by the fear factor of politics. Surplus supply capacity was negligible in the months before the 1973 embargo after years of soaring demand. After this year's three million barrels a day of supply cuts, designed to bolster prices, spare capacity stands at more than five million barrels on the 75 million barrel a day market. Nevertheless, few are prepared to rule out a future oil shock. Prices soared briefly above $40 in 1990 when dealers thought Iraq's invasion of Kuwait might turn into missile strikes on Saudi oil facilities. And the volatile Middle East remains home to 65 percent of the world's one trillion barrels of known oil reserves.

OPEC's 40 percent share of global production, down from two-thirds in the 70s, will rise again, once low prices start to squeeze out high-cost production.

"A new era of Middle East dominance in oil supply will come when North Sea production has peaked and before non-conventional oils are widely used," predicted the IEA's Priddle. Geologists say that despite new sources such as the Caspian Sea and offshore West Africa, oil companies are losing the race to replace depleting reserves.

British academic Colin Campbell, in a study of what is left in the world's petroleum reservoirs, concludes that oil is nearing the point of terminal decline.

"We can be in no doubt," says Campbell, "that 'Hydrocarbon Man' is approaching a turning point as conventional oil production reaches its peak within a matter of a few years."

-- Old Git (anon@spamproblems.com), October 20, 1999.

In California, it went by odd and even license plates. This was of course before the personalized plates became popular. Odd numbers one day, even numbers the next. People would leave their cars at the gas station so they would be the first in line to get gas, some even spent the night in their cars so they could get their gas and go to work. It was illegal for you to top off your tank too (signs were posted on pumps), and if you were caught, you could be fined. It was a nightmare, cars were lined up for blocks to get gas. At first, people were pissed and fist fights broke out, but soon settled down and people just figured this is the way it was. At the time of the so called "oil crunch," I lived in the Bay Area. The media was right on top of it all. Some went out to the refineries in Richmond, Martinez and Benicia and took infrared pictures of all the storage tanks there. As reported, they were all full and that's why the media was saying the oil companies were lying about the energy crunch. Tankers were in and out of the SF Bay as usual, shipments were usual. Gas prices skyrocketed overnight, people paid the price and it's gone no where but up since then.

-- bardou (bardou@baloney.com), October 20, 1999.

Congressional Research Service Report for Congress

World Oil Production After Year 2000: Business As Usual or Crises?

Joseph P. Riva, Jr. Specialist in Earth Sciences Science Policy Research Division

August 18, 1995

35-925 SPR

SUMMARY

During the Arab oil embargo of early 1970s, the United States gross national product declined and unemployment doubled. Some 20 years later, in response to a threat to Middle East oil supplies, the Gulf War was fought. Oil fuels world commerce and accounts for 40 percent of total primary energy demand. Oil availability in the future will be a major factor in the world's economic condition. There have been projections by the International Energy Agency (IEA) and the Energy Information Administration (EIA) that world oil production will have to be increased by about one-third in the next 15 years to meet rapidly rising demand. This would require a major expansion of oil production capacity in the Persian Gulf OPEC countries that is far above their present plans. While the Gulf OPEC countries may have sufficient oil reserves to support such an additional production increase, an expansion of such magnitude would require capital that they may not have and the assistance of foreign financial and oil interests that they may not want.

Outside of the United States, where proved reserves are defined primarily on petroleum engineering criteria, there are many vested interests that define oil reserves to meet political or economic objectives. Discounting the reserves that may be exaggerated and utilizing only that portion of the resources that may be produced in actual practice could reduce the ultimately recoverable oil remaining in the world to a level where the midpoint of world oil depletion would occur at the turn of the century, followed by a production decline of nearly three percent per year. Such a resource driven world oil shortfall is a worst case scenario, not being amenable to the usual political, economic, or military solutions.

Deficient productive capacity has not yet caused an oil crisis, but that does not mean it never will. Significant increases in world oil demand will have to be met primarily from Persian Gulf supplies. This is a region with a history of wars, illegal occupations, soups, revolutions, sabotage, terrorism, and oil embargoes. To these possibilities may be added growing Islamist movements with various antipathies to the West. If oil production were constrained, oil prices could rise abruptly along with adverse world economic repercussions. If the IEA and EIA are correct on the demand side, deficient world oil productive capacity could cause an oil crisis within 15 years and political disruptions in Saudi Arabia could cause one sooner. However, if the increases in world oil demand were more moderate, and there is long-term relative peace in the Middle East, with increasing foreign participation in upstream oil activities, a business as usual world oil demand and supply situation would be a likely scenario for much of the next century.

CONTENTS

INTRODUCTION Business As Usual -- World Supply -- World Demand Middle East Oil -- History -- Petroleum Geology -- Reserves -- Production Potential -- Potential Problems Potential Crises

CONCLUSIONS

For remainder, see:

http://www.cnie.org/nle/eng-3.html

-- Old Git (anon@spamproblems.com), October 20, 1999.

Old Git, thanks.

If we should hit the wrong end of the odds and lose, say, 25% of our domestic refining capacity and maybe 30% of our imported oil/oil products, does anyone see any solution that DOES NOT involve federal level rationing and allocation, probably under an emergency decree?

Please, I'm not looking for conspiracies, for Clinton trying to make himself emperor, or the UN using all of our gas to drive their white buses around (hey, I did see a white Hummer twice last week. It had "restraint devices" cleverly disguised as child safety seats...)

Seriously, how do we keep ourselves fed, transported to and from work, manufacture our products, if we lose, say, 20% of the oil we currently use?

-- mushroom (mushroom_bs_too_long@yahoo.com), October 21, 1999.

Old Git--

Help me out here. While reading the last post I thought I remembered a little more about that ol' gas crunch. Wasn't that the point in time where the speed limits were dropped? I remember hearing around that time that once you go over 50 mph the gas consumption in the car goes way up. Don't know if that was true or no. AND...weren't some lights turned off. I mean what was it? the streetlights every so many blocks? What other things do the 40 and 50 somethings remember?

-- beej (beej@ppbbs.com), October 22, 1999.

1) Speed limits dropped in the mid 1980's not the 70's.

2) If street lights were "adjusted" it was in cities I'm not familiar with.

Chuck

-- Chuck, a night driver (rienzoo@en.com), October 22, 1999.