The 1970s Energy Crisis and National Energy Policy Creation — Dylan Lee Lehrke


The energy crisis of the 1970s was rooted in America’s increasing dependence on foreign oil. OPEC’s 1973 decision to halt oil shipments to countries supporting Israel in the ongoing Yom Kippur War, including the United States, turned a difficult situation into a disaster. The embargo lasted five months, but its effects lingered for the remainder of the decade. A second oil crisis began in 1979, during the Iranian Revolution, which halted that country’s oil production. Most analysts, however, are reluctant to blame America’s energy ills of the 1970s entirely on exogenous forces. These problems might have been surmountable if Washington had not hobbled itself with poor organization and years of ineffective policy. Instead, the federal government’s attempt to manage the changing energy environment proved ruinous. This study confirms the conclusion of John Clark that “It is well-nigh impossible to find a scholarly analysis that answers… affirmatively” to the question “Did the United States respond effectively to the energy crises of 1973?”

In the early 1970s, the U.S. government was not organized in a manner that allowed the creation of a coherent and integrated energy plan. Of particular note, there were five separate fuel policies in lieu of one comprehensive strategy. Once the first oil shock hit, the system proved incapable of producing ad hoc responses to alleviate shortages. Strategy development was particularly difficult because responsibility for energy policy was distributed among eight cabinet departments, as well as numerous agencies, offices, and commissions. There was little coordination among this pantheon of government agencies or with state authorities. An integrated plan in such an environment proved impossible and reorganization difficult. There appears to have been some improvement in organization and policy creation by 1980, but many analysts believe the changes were partial fixes.

The U.S. government agencies and departments involved did not collaborate well to create an integrated strategy prior to the crisis nor was an ad hoc response possible once the oil shortage occurred. As the crisis approached, Nixon pressed for the establishment of a new energy department to integrate the U.S. energy policies, but negotiating such a large organizational change through Congress’s embedded and partisan power structure was cumbersome. Thus, the government structure that existed when Nixon assumed office was generally the one that would confront the crisis of 1973. At the onset of the embargo, additional organizations were created to supplement the existing institutions. This included the creation of the Federal Energy Administration (FEA), which was to be responsible for all energy policy operations and functions relating to petroleum programs. However, none of these efforts mitigated the crisis.

Nonintegrated policy, jurisdictional confusion, poor economic advising, lack of coordination between states and the federal government, bureaucratic indifference, and the sheer number of actors involved in energy policy gridlocked the system. As a result, the response to the energy shortfall was a series of mismatched and ill-advised policies that further exacerbated the crisis.

The absence of a coherent energy strategy through the 1970s and failure to craft an even marginally effective ad hoc response to the oil shocks worsened economic conditions and contributed to energy price inflation, strengthening OPEC’s power, and increasing America’s vulnerability to the vicissitudes of the energy market.

In the early 1970s, the U.S. government was not organized in a manner that facilitated the creation of a coherent and integrated energy plan. With five separate fuel policies and a division of responsibility among eight cabinet departments, numerous agencies, offices and commissions, an integrated policy was impossible. The system also complicated any ad hoc responses to alleviate shortages after the oil embargo began. Proposals for change, reorganization and response too often turned into power struggles. This case resonates today, as energy challenges, such as those of the 1970s, have become increasingly likely due to shrinking international oil reserves and increasing energy use. In addition, the responses of the Nixon, Ford and Carter administrations to the crisis involved the creation of new committees, agencies and departments, a commonly prescribed antidote to contemporary national security challenges.