History is good stuff, sometimes fun. I keep a few reference volumes on the subject by my desk. One very handy reference is “The Timetables of History”, a very large volume available at a surprising reasonable price from any bookseller. Let’s me recall the past in some detail. Let’s try a little of that here.

1962. John F. Kennedy sent U.S. military personnel as advisors into South Viet Nam to lend a hand in resisting an insurgency.

1963. Kennedy assassinated, Lyndon Johnson becomes President.

1964. Lyndon Johnson, after inaccurately reporting to Congress an incident in the Tonkin Gulf, waged war on the insurgents in S. Viet Nam. It was Johnson’s policy to wage war on borrowed money instead of raising taxes to pay for it. Well over a half million troops were involved for a period of time. American dead totaled over 40,000. This country rebelled against a war president.

1968. Nixon elected. The war continued and grew. So did the deficit.

1972. Richard M. Nixon was successful in his campaign for a second presidency. Unfortunately, a burglary in the Watergate complex would have important political consequences. Meanwhile, the dollar continued its fall in value, wage and price controls were briefly in place to cool the inflation the nation was experiencing. Viet Name continued to be an overwhelming concern, political polarization was extreme.

1973. Wage and price controls suspended, though inflation was not nearly under control. Israel, Jordan, Syria and Egypt get into it in the Yom Kipper War. The Israeli were clear victors, the Arabic nations retaliated with an oil embargo against perceived friends of Israel, most pointedly the U.S. We should perhaps note that this was a Cold War event – the Soviets equipped the Arab nations for their war, well in advance and in absolutely no state of innocence over their intended use. The U.S., once the shooting began, instituted a massive airlift of arms to the Isreali.

Several oil producing nations created OPEC and quadrupled the price of petroleum.

Quoting directly from “The Timetables of History”, published by Simon & Schuster:

“1974. Worldwide inflation helps to cause dramatic increases in the cost of fuel, food, and materials; oil-producing nations boost prices, heightening inflation; economic growth slows to near zero in most industrialized nations; Dow Jones stock exchange index falls to 663.”

Gasoline lines were becoming commonplace in some U.S. cities – there were days you just couldn’t buy gas. Car pooling began to seem like a good idea. Nixon resigns the presidency because of Watergate; a good many of his cabinet and close associates are indicted – the President was an un-indicted co-conspirator. Gerald Ford becomes president. Ford pardons Nixon but that does little for the economic prospects of the country.

1975: The U.S. evacuates Saigon as the communists march in,, marking an ignominious end to our adventure in Viet Nam. The unemployment rate in the U.S. reaches 9.2%, highest since 1941. Oil prices rise by 10%. Jimmy Carter is elected president.

Again quoting directly from “The Timetable of History”:

1977:President Carter warns that the energy crisis in the U.S. could bring on a ‘national catastrophe’; Americans must respond with the ‘Moral Equivalent of War,’ making ‘profound’ changes in their oil consumption.

The 1977 energy legislation was passed by the Congress and signed by the President.

1979: OPEC doubles its prices.

1980: Ronald Reagan elected president.

At this point my reference fails me. I don’t have the exact date of the great big Reagan recession I’m calling it that because it happened during his watch – I no way suppose he was responsible for it. It was that near-decade of truly heavy inflation and unemployment that did it. The recession made unemployment worse, of course, but it did manage to knock inflation on the head.

1985: World oil markets experience radical change. Cheap oil is once again there for the asking. The American public walked away from the fuel-efficient automobiles mandated by the 1977 energy act, and fled into trucks modified into pleasure barges and now called Sports Utilities Vehicles – trucks were excused from fuel-efficiency standards or pollution control by Act of Congress.

It is 2006. Passing Wal-Mart, I noted that over half the vehicles in the parking lot were trucks. The President seems to think maybe we could cool it a little. The Vice President says the American Way of Life is “Not negotiable”. Congress has shown little interest, except to talk about spending some more non-existent money by sending checks to Americans for gas money. They just talked about it. They didn’t do anything. Just talked a little.

Meanwhile, say the geologists, we are running smack dab out of gas. Well, no, that’s not what they are saying at all. They are saying that demand is rapidly developing beyond our capacity to increase production, with many., many oil fields facing lower production rates because of depletion. Depleted oil fields see reduced production at a rate of about 5% per year. Imports of oil to China increased by 20% last year, by 1.2% in the U.S.

Note on “running out”. Each year we will use 5% of existing and available stocks. Available does not mean what’s down there. It means what you can afford to get out. Production prices rise, product prices rise, output falls. But given that 95% is always left, you will never reach zero. Oil geologists do not see any day, no matter how far into the future, when we have completely run out of petroleum. They just don’t see us getting anything like what we might like to have.

This entry was posted on Monday, July 10th, 2006 at 7:41 am and is filed under Energy Future, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.