[Here is another sample chapter from Part One of Twilight's Last Gleaming. It is preceded by 3. The Spread of Islam Elsewhere in the World and followed by 5. Mexico Grows in Prominence. I left the previous installment up for more than a month because I thought it very relevent to the Wall Street bailout and its implications. The chapter I have just posted below I think will be of interest due to the current proposed bailout of the American auto industry. Copyright 2008 by Charles Hoffman.]
4--AMERICAN DEPENDENCE ON MIDDLE EASTERN OIL AND ITS REPERCUSSIONS
The early decades of the 21st Century saw an increasing number of Muslim Americans elected or appointed to government positions on the Federal, state, and local levels. Many served with distinction. Even so, the growing power of Islam throughout the Eastern Hemisphere was viewed with mounting alarm in America, both by average citizens and officialdom. Unfortunately, the United States had failed to break its dependence on Middle Eastern oil, a holdover from the previous century.
By 1970, the American consumer had long since come to take the gasoline that fueled his car for granted as a cheap, readily available commodity. During the middle period of the 20th Century, from roughly 1945 to 1973, the average American enjoyed a prosperity not seen before or since. With cheap fuel in abundance, the automobile became, not just a means of transportation, but a key accessory to an affluent lifestyle. It was common for motorists to enjoy the convenience of “drive-in” restaurants, banks, and theaters. An efficient system of interstate highways made it possible for Americans to easily travel throughout their vast country in their personal vehicles.
This carefree era came to an abrupt halt in the 1970s, when the price of crude petroleum increased tenfold seemingly overnight. It was a momentous change that came about because of the volatile political climate of the Middle East.
Oil-rich Middle Eastern nations such as Iran and Saudi Arabia were members of the Organization of Petroleum Exporting Countries (OPEC). OPEC was founded in 1960 as a business organization aimed at regulating oil production and commerce, and included non-Arab nations elsewhere in the world, most notably Venezuela. In the 1970s, OPEC went from being a mere business enterprise to wielding real political clout. It was then that the Arab members founded an overlapping agency, the Organization of Arab Petroleum Exporting Countries.
Victories by the Jewish state of Israel in the Six Day War of 1967 and the Yom Kippur War of 1973 left Arab countries in the region seething with resentment. Their wrath was directed at nations who had furnished Israel with aid and support, primarily the United States of America. In retaliation OAPEC launched the Oil Embargo of 1973. Petroleum production was curtailed and sales to the West were halted for five months.
The Arab Oil Embargo sent shockwaves through American society. Americans had become accustomed to services designed to maximize their convenience. Now they were forced to pull their cars into block-long lines as they awaited entry into service stations to refuel their vehicles. They were stunned, perplexed, and utterly bewildered. They were told by political leaders that they must “conserve” for the first time since the Second World War. During the post-war era, many Americans had relocated to sprawling suburbs located some distance from the workplace. Now the gasoline necessary for lengthy daily commutes proved to be a considerably more burdensome expense. This “energy crisis” also placed limits on electricity produced by fossil fuels and created shortages of heating oil needed for many homes during the bitter cold Northeastern winters. In the years immediately following, the nation’s economy suffered in no small measure, reaching its lowest point since the Great Depression. Runaway inflation ravaged budgets and savings. Unemployment was widespread. Though not as widely reported, underemployment was also a major social problem. Recent college graduates entering a shrinking job market found that their expensive degrees were worthless. As the “Roaring Twenties” had been followed by the Depression in the `30s, so the “Swinging Sixties” were followed in the `70s by the “Recession,” as it was euphemistically called.
America was still licking its wounds from the `73 Embargo when the Shah of Iran was toppled in the Islamic Revolution of 1979. Once again the flow of Mid East oil to America was choked off. Once again, hapless motorists were forced to form long lines at gas stations. The economy plummeted further. Americans who had come of age during the booming 1950s and `60s were overwhelmed with despair. President Jimmy Carter, whom the electorate had looked to as a beacon of hope, was finally moved to admit that the nation was in the grip of a spiritual malaise.
One sensible adaptation to steeper gasoline prices was the introduction of more fuel-efficient vehicles. The American automobile industry was sluggish when it came to making this conversion. Consequently, the Japanese auto industry made remarkable inroads into the American marketplace during the 1970s and `80s. The Japanese manufacturers offered vehicles that boasted superior gas mileage. Many Japanese models also garnered a reputation for better overall quality. American manufacturers arrogantly chose to ignore market trends, yet wondered why affordable, fuel-efficient, well-built “foreign cars” were finding such favor with American consumers. Instead of improving their products, they promoted the slogan, “Buy American.” The implication was that purchasing foreign goods hurt the American economy. No mention was made of the fact that Japanese auto companies opened manufacturing plants in economically depressed areas of the United States such as Ohio and Tennessee, even as the manufacture of certain American models was outsourced to Mexico. This petulance culminated in a brief period of “Japan-bashing” in the early 1990s. The American business community promoted the notion that unfair Japanese competition was responsible for American economic woes. A popular quotation asserted that “the Japanese regard business as war.” Apparently the assumption was that business in America was conducted in the manner of a gentlemanly sport. In any event, such propaganda did little to curtail the popularity of Japanese automobiles. As one anonymous consumer quoted in Business World put it, “It’s a sad day for America when these car companies have to resort to a bogus appeal to patriotism to sell their over-priced, inferior junk.”
Smaller, more fuel-efficient cars were eventually offered by all manufacturers. However, the United States remained in thrall to Mid-East oil producers. The main reasons were twofold. On one hand, sizable petroleum reserves in Alaska and off the coast remained untapped due to ecological concerns. On the other, alternative energy sources never got off the ground due to the shortsightedness of business leaders in the private sector.
Offshore oil drilling met with frequent opposition due to the possibilities of harm to marine life, damage to the oceanic ecosystem, and the despoiling of coastal areas. Ecology activists likewise opposed the encroachment of oil-drilling into hitherto pristine areas of the Alaskan wilderness. The largest oilfield in North America lie beneath the north slope of Alaska. A portion of this region had been tapped by American oil companies. However much of this same enormous oil bed lie under the Arctic National Wildlife Refuge (ANWR). The ANWR had been set aside to remain an unspoiled habitat for threatened species of indigenous fauna such as caribou and polar bears. Advocates of oil drilling in the ANWR asserted that less than 8 percent of the Reserve would be affected by the drilling and that the petroleum thus produced would greatly alleviate US dependence on imported oil. Opponents countered by insisting that the ANWR would suffer irrevocable widespread damage from the development that would take place and the amount of oil yielded would, at best, provide marginal relief for the country’s energy demands. A bitterly controversial issue, the question of whether to drill or not to drill in the ANWR was passed on from administration to administration.
Some quarters called for a sensible compromise that would have made allowances for a certain amount of oil drilling, carefully implemented, as a stopgap measure to buy time while the energy and automotive industries redoubled their research and development efforts aimed at engineering alternative energy technologies. Skeptics were quick to insist that tapping the ANWR for oil would furnish business leaders with a convenient excuse not to undertake such a costly and demanding effort.
In support of their argument, these skeptics cited the sluggishness of the American automotive industry when it came to marketing smaller, more fuel efficient cars in the first place, as well as their gradual return to the marketing of large, even massive, vehicles once the energy crisis of the 1970s had abated. The 1980s and `90s saw a resurgence of relative prosperity to the American economy, at least in some segments. The long gas lines of the ‘70s receded into a distant faded memory. American auto companies favored the production of larger, costlier vehicles over fuel-efficient economy cars because the former were more profitable for the manufacturer. By the late `90s one out of every five vehicles sold in America was a light pickup truck or a sport utility vehicle. Both were bulky motor vehicles that consumed great quantities of fuel in the manner of the “gas guzzlers” of an earlier era. Sport utility vehicles (commonly abbreviated as SUVs) tended to be oversized and ostentatious, and were especially popular among the more affluent American motorists.
Such consumers received a shock in the summer of 2006 when the price of gasoline shot up to well over $3.00 per gallon. This development was greeted with alarm. Decades earlier, the manipulation of oil prices by OPEC was seen primarily as a matter of business, the political origins of the 1973 embargo notwithstanding. That is, it was perceived as natural that a region technologically backward but rich in raw materials would wish to exploit its key asset to best advantage. Americans may not have liked the way OPEC controlled Middle Eastern petroleum, but they thought they understood it. But following the series of terrorist incidents that culminated in the September 11, 2001, attacks on New York and the Pentagon, this outlook had changed. Americans now viewed the most oil-rich region on the planet as being dominated by Islamic fundamentalists, fanatics bristling with hostility towards America and the West. This left US citizens with a disagreeable feeling of vulnerability. There were increasing demands that the United States “free itself” from “foreign oil.”
In the fall of 2006, gasoline prices dropped back down to what most Americans had come to regard as acceptable levels. Then in 2008, prices soared to over $4.00 per gallon. Business double talk about mysterious market forces went over the heads of average American consumers but helped to placate them nonetheless. The pattern of rising and falling gasoline prices was repeated many times during the following years and decades. The mentors who guided petroleum production in the Middle Eastern states were shrewd enough to keep America off balance. Fuel prices were raised when a need was perceived to exert pressure on the Western nations, then lowered when it was deemed prudent to lull the West back into complacency. In this manner, the oil-producing nations of the Middle East were able to string the West along well into the 21st Century.