Looking Back on the 1973 Oil Crisis, New Perspectives on Energy Innovation

October 2023 marked the fiftieth anniversary of the oil embargo imposed by the Arab members of the Organization of Petroleum Exporting Countries (OPEC) in the wake of 1973’s Arab-Israeli War. The temporary shortages inflated energy prices, jolted the global economy, and destabilized geo-political relationships around the world. The crisis also inspired new science and technology policies and several innovations, including alternative nuclear, solar, wind, and geothermal energy sources and more fuel-efficient automobiles. Today, we are witnessing a resurgence in creative policy solutions and new energy innovations to address the ongoing challenges of war, energy scarcity, inflation, and the environmental impacts of climate change.

A crowd of cars gathers to wait in line for gas at a gas station during gas rationing of 1973. — *Gas rationing in Portland, Oregon, December 1973. Photo by David Falconer, courtesy of the* *National Archives and Records Administration via* *Wikimedia Commons*.

In a recent online symposium, the Lemelson Center co-hosted New Perspectives on Energy Innovation, in which distinguished historians, journalists, and government policymakers discussed how the lessons learned from the 1970s energy crisis might be applied to address present-day climate and energy challenges and opportunities. The Lemelson Center co-presented the symposium with Arizona State University’s Consortium for Science, Policy, and Outcomes, and two departments at Johns Hopkins University, the Department of History of Science and Technology and the Department of the History of Medicine.

SESSION 1: (Mis)Remembering 1973: Crisis and Innovation

I served as the moderator for Session 1, the more historical of the two symposium sessions. In this session, we invited our speakers to consider how we have remembered—and perhaps misunderstood—the causes and reverberations of the 1970s energy crisis. How did the federal government, energy companies, and everyday citizens react? What kinds of energy policies and technological innovations emerged from the crisis, and which potential solutions proved to be unsustainable? What can we learn from a more nuanced understanding of 1973 and its aftermath?

Screenshot of webinar panelist introduction slide featuring four headshots and four names and titles. — *The Session 1 panelists, clockwise from top left: Meg Jacobs; Cyrus Mody; Eric S. Hintz; Richard F. Hirsh. Screen shot by Laura Havel,* *© Lemelson Center.*

Meg Jacobs (Princeton University) kicked things off with a recap of the key events of October 1973. When Egypt and Syria launched a surprise attack on Israel to start the Arab-Israeli War, the Nixon administration asked Congress for millions in military aid for Israel. Led by Saudi Arabia, the Arab members of OPEC retaliated by imposing an embargo on oil exports to the United States. The temporary shortages inflated energy prices and jolted the US economy. Consumers faced long lines at gasoline pumps and a growing sense of vulnerability. How, they asked incredulously, could a small group of nations with relatively little military power wield the so-called “oil weapon” to inflict so much economic damage on the United States? To address the lingering energy crisis, the Nixon, Ford, and Carter administrations tried a series of policies, from price controls to conservation measures. However, the US remained vulnerable to global geo-politics and experienced another energy crisis in 1979 amid the Iranian Revolution. Jacobs argued that after Watergate, the Vietnam War, and these energy crises, Americans lost confidence in the federal government’s ability to address the nation’s problems.

Cyrus Mody (Maastricht University) showed that oil industry executives had been concerned about limited supplies and price volatility since the 1940s; he then provided an inside look at the industry’s response after the 1973 energy crisis. First, Big Oil sought energy independence through “sustainable development” of new domestic oil fields in Alaska and offshore in the Gulf of Mexico. The industry also invested in R&D to diversify into alternative nuclear, wind, solar, and geothermal energy sources.

However, after a decade, the industry abandoned its alternative energy research, doubled down on fossil fuels, and engaged in climate denialism despite the warming planet. Mody’s conclusion was wistful: “it might have been different.” The oil companies had started down a path toward sustainable energy production during the 1970s but abandoned it.

Black and white photo of a wind turbine next to an oil derrick, circa 1977-1983. — A wind turbine alongside an oil derrick, circa 1977-1983. Spurred in part by new federal and state energy policies, the oil industry spent the decade after the 1973 energy crisis advancing alternative solar, wind, nuclear, and geothermal energy sources. *American Petroleum Institute Photograph and Film Collection, Archives Center, National Museum of American History (AC0711-0004951).*

Richard F. Hirsh (Virginia Tech) focused on the impact of government energy policies among electrical utilities in the decades after 1973. During the middle decades of the 20^th century, Hirsh observed, most people accepted the notion that electrical utilities were “natural monopolies.” There were few concerns as service expanded to rural areas and energy prices stayed low. However, by the 1970s the utilities entered an era of “technological stasis” when innovation stalled, and consumers suffered through blackouts. In the decades following the 1973 crisis, both federal and state legislators enacted new energy policies to deregulate the utilities. They believed that real competition and consumer choice in the energy marketplace would spur innovation to attract customers who might, for example, prefer to purchase electricity generated by wind versus coal. While these policies did spur alternative energy development, the electrical utilities struggled to meet demand under deregulation and states like California continued to suffer through blackouts and unreliable service. Hirsh concluded that the future of electrical production will be increasingly distributed versus centralized. This decentralized energy infrastructure will require a modernized electrical grid and advanced batteries to store and then move energy from sites of production to sites of consumption.

SESSION 2: Energy Innovations for 2023 and Beyond

Moderator Arthur Daemmrich (Arizona State University) convened our second session, which focused on the current and future outlook for energy innovations. The speakers considered several questions: How have the events of the past half-century informed the ongoing fears and guarded optimism of our present moment? What policies, new technologies, and consumer behaviors will be required to mitigate the climate crisis? What are the barriers to energy innovation? And how do we imagine the future of energy and society in the next fifty years?

Screen shot of session two panelists featuring all four panelists on camera. — *The Session 2 panelists, clockwise from top left: Clark Miller, Arthur Daemmrich, Robinson Meyer, and Kelly Cummins. Screen shot by Eric S. Hintz,* *© Lemelson Center.*

Journalist Robinson Meyer (Heatmap News) provided a brief overview of current and emerging trends in the sector. He described the “green vortex,” a virtuous cycle in which government industrial policy drives lower manufacturing costs for sustainable energy technologies, which drives down their costs, and leads to greater demand and adoption. In particular, Meyer discussed how recent federal legislation—the Infrastructure Investment and Jobs Act (2021), the Inflation Reduction Act (2022), and the CHIPS and Science Act (2022)—are collectively making historic investments in green technologies, onshoring domestic manufacturing, and spurring the development of a new “battery belt” in southern states like Georgia, South Carolina, and Tennessee. However, in referencing the 1980s anti-environment “counter-shock” described in the earlier talks by Jacobs and Mody, Meyer wondered if the climate provisions in the Inflation Reduction Act (IRA) might someday be repealed.

In a perfect follow-up to Meyer, Kelly Cummins (US Department of Energy) described the mission of the DoE’s Office of Clean Energy Demonstrations (OCED): to spend $25 billion from the IRA and other sources to “deliver clean energy technology demonstration projects at scale in partnership with the private sector to accelerate deployment, market adoption, and the equitable transition to a decarbonized energy system.” Cummins discussed some of the projects already underway, including the October 13, 2023 announcement of $7 billion in OCED funds to establish seven Regional Clean Hydrogen Hubs. These hubs will produce concentrated molecular hydrogen (H₂), which burns cleanly with no harmful carbon dioxide emissions. She also spoke about OCED investments in various decarbonization projects, and explained how carbon capture technology “vacuums up” the exhaust from burned fossil fuels, compresses the industrial pollution, and stores it underground so it cannot exacerbate atmospheric warming. Cummins noted that beyond new technologies, implementing a clean energy transition required social and organizational solutions including faster permitting, effective project management, and a trained labor force ready to build out these massive clean energy projects.

*Brian Webster (left) and Mario Richard install solar panels on a home in Englewood, Colorado, 2012. Courtesy of the National Renewable Energy Laboratory.*

Clark Miller (Arizona State University) expanded on Cummins’s notion that the clean energy transition represented a series of socio-technical challenges and decision points. Miller provided a simple example which concerned how different communities might decide to administer the electrical energy produced by homes with solar panels. A community could opt to organize its homes in a centralized manner, with a statewide utility aggregating the energy produced and re-selling it back to homeowners. It could organize individual homes in a libertarian manner, with each individual home buying and selling its energy in a free-wheeling, atomistic marketplace. Finally, it could organize at the community level, through neighborhood-sized energy co-ops. One size does not fit all; Miller stressed that each approach has pros and cons, and every community will need to decide for itself how best to approach the clean energy transition.

Overall, our symposium speakers helped us achieve our Smithsonian mission to “increase and diffuse knowledge” about the important topics of energy innovation and climate change. Few topics are more relevant to the future of our planet. The symposium helped us understand that in 2023, we are still living with the legacies of events that happened fifty years ago. On a more hopeful note, the symposium also confirmed that through the equitable implementation of technological, policy, and societal innovations, we can mitigate the looming climate crisis and build a sustainable energy future.

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