Energy Crises: Perception and Reality

  • Alberto Clô


The modern history of the world energy industry, which dates from the second half of nineteenth century, encountered a definite “turning point” in the 1970s. Events of great relevance had certainly happened before this time — indeed the period between 1870 and 1900 featured great technological innovations linked to the discovery, processing and use of modern energy sources1 — but their combined outcome was always to further the harmonious growth of the energy system, which was to come to a temporary halt only with the Second World War. After this was over, the industry once again began to expand at an even higher rate.


Saudi Arabia Spot Market Spot Prex OPEC Country Arab Nation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Modern“ sources mean commercial sources, traded on the international or domestic markets. Biomasses are also excluded (especially wood) which still represented the majority of consumption in the first two decades of the 20th century.Google Scholar
  2. 2.
    On a world scale the structure of energy consumption changed between 1950 and 1972 as follows (in %):Google Scholar
  3. 3.
    For the three main consuming areas the proportion of oil imports took the following trend in the decade preceding the first crisis:Google Scholar
  4. 4.
    For a historical reconstruction of these events, including the many elements which helped to “forecast them”, see fast of all D. Yergin, The Prize, Simon and Schuster Inc., New York 1991, and the famous article printed a few months before the crisis by J.E. Akins, The Oil Crisis, This Time the Wolf is Here, in “Foreign Affairs”, vol. 51, April 1973, pp. 462–490 and by M. Adelman, Is the Oil Shortage Real? Oil Companies as OPEC Tax Collectors in “Foreign Policy”, Winter 1972, pp. 69–108.Google Scholar
  5. 5.
    A private cultural organisation set up in 1968 to call the attention of governments and the world public opinion to the complex and increasingly critical interactions between population dynamics, economic development, increase of pollution, availability and consumption of natural resources.Google Scholar
  6. 6.
    For a review of the global models drawn up in the Seventies, including in particular those of Forrester (1971) and Meadows (1972), see M. Fortis, Modelli globali e scenari di sviluppo mondiale, in “Energia”, 1981, no. 2 pp. 32–57.Google Scholar
  7. 7.
    In the United States in particular, it fell from 4 million barrels per day in 1965 to close to zero in 1970.Google Scholar
  8. 8.
    In particular a relative shortage of oil refining capacity in Europe and in Japan; a shortage of tanker capacity for transport, aggravated in 1970 by Syria’s blocking of the Trans-Arabian Pipeline for political reasons; a relative shortage of fuel oil for electricity generation in the United States (due to the growing environmentalist opposition to the use of coal and to its stricter quality standards); a concomitant crisis in the supplies of gas on the east coast of the United States; and also in the US, delays in starting up nuclear plants and the blocking of the exploitation of the oil fields in Alaska due to environmentalist opposition. This opposition was to cost the whole world a figure of between 1,500 and 2,000 billion dollars (of that time) and which, ironically, was to contribute to an increase of 13 times the world’s electronuclear power over the following twenty years.Google Scholar
  9. 9.
    On the basis of the complicated mechanism used, the governments would first manage and collocate just 10% of the crude oil they were entitled to (in theory equal to 25%) with a 30% expected growth in 1976–77, gradually increasing until it reached 100% of the equity crude only in 1992 (when it would represent 51% of the total).Google Scholar
  10. 10.
    On 2nd April 1971 the “Tripoli Agreement” was signed in Tripoli, and later the “East Mediterranean Agreement” which regulated the new contractual relations for the North African producer countries and for those who exported via the Mediterranean.Google Scholar
  11. 11.
    As a whole, these provisions led in 1971 to an increase of the tax paid costs (production costs plus fiscal charges) of 40–50 cents per barrel in the Persian Gulf. This increase was immediately transferred by the companies onto the market prices which recorded an increase of 30%-35% in the mean of 1971, while the posted prices rose by 27%-32%, greatly exceeding 2 dollars per barrel.Google Scholar
  12. 12.
    This upward spiral culminated in the record sum offered in December 1973 to the NIOC, who had auctioned 500,000 bbl/d for 6 months: the independent buyers even offered as much as 17.34 doll./ bbl for Iranian crude compared with the official selling price of 5.25. Fired with enthusiasm, the Shah actually stated that this was the true value of the oil market.Google Scholar
  13. 13.
    Variations in the crude oil output of the countries (selected intervals, 1972–73)Google Scholar
  14. 14.
    If this hypothesis of interpretation turns out to be true“, I wrote before the 1973 crisis broke out, ”the result will be that until the American domestic supply can guarantee the country an ample margin of autonomy, the prices of the international market may tend to be drawn upwards“ (Clô, 1973). This is what in fact happened.Google Scholar
  15. 15.
    The nationalisation law adopted by Mossadeq in 1951 was actually never abrogated. The Iranian Consortium however benefited from an exclusive advantage in the country.Google Scholar
  16. 16.
    In 1978 the share composition of the Iranian Consortium was as follows: BP: 40%; Royal Dutch-Shell: 14%; Gulf, Mobil, Exxon, Socal and Texaco: 7% each; CFP: 6%; other minors: 5%. Nationalisation in Nigeria took another 400 thousand bbl/d from BP, thus lowering its total supply from 3.5 mill. bbl/d before 1978 to just 0.7.Google Scholar
  17. 17.
    In Italy, for example, fears grew about a supply deficit calculated for the whole of 1980 as 20 million tons by some Ministries up to 30–35 by others (with a budgeted consumption of 100–102 mill. tons). All the worry disappeared as if by magic, however, when in a dramatic meeting of the Council of Ministers on 29th December 1979, increases in the already remunerative prices were agreed (Clô 1980b).Google Scholar

Copyright information

© Springer Science+Business Media New York 2000

Authors and Affiliations

  • Alberto Clô
    • 1
  1. 1.Bologna UniversityItaly

Personalised recommendations