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Publish Date: 9/4/2005

Is this another energy crisis?
Some call situation worse than in ’70s

LONGMONT — Robert Basta’s new Ford F-150 Lariat was shined up and sleek. And Wednesday afternoon, it was thirsty.

“I had almost half a tank in there, and it still took me $45 to fill it up,” said Basta, who bought the truck in April.

At about 5:30 p.m. Wednesday, business at the pumps at the Sav-O-Mat at Sixth Avenue and Main Street was buzzing. Fifteen cars were crammed into the small lot, with backups at every pump. The reason? Regular unleaded was going for $2.69 a gallon, a dime cheaper than at two stations just a block away.

A 2005 Ford truck demands a higher grade than just 85 octane, but that’s what Basta was filling up with. He had taken his truck to his mechanic to have the timing adjusted so he could drive on the cheaper blend.

Gouging or merely circumstances?

There have been times in the past when there were lines at the pump. A Daily Times-Call story dated Sept. 12, 2001, told of lines to get gas and large, sometimes angry crowds of drivers flocking to service stations to fill up before the price spiked.

But you may have to go back to the energy crisis of the 1970s to find the kind of anxiety people are feeling now about this country’s energy situation.

A word from that era popped up late last week: rationing. The oil companies are trying to ensure that markets across the country have fair access to gasoline, so they’ve begun limiting the amount of fuel local stations can get.

Several stations in town had run out of regular gas midweek, having used their daily allotment.

Whether things get as crazy as they did in the 1970s remains to be seen, but Basta, 69 and a Longmont native, remembers those days and doesn’t see any relief in sight for what’s happening now.

“(The oil companies) have got a lot of fuel, a lot of oil surplus that they’re not going to turn loose,” he said. “They’re going to take all they can from the people. I believe that, and so do a million other people.

“There’s no justice to this, none at all.”

Basta’s comments came before the news that President Bush had pledged to tap into the nation’s Strategic Petroleum Reserve, and the International Energy Agency said Friday that it would free up about 60 million barrels of oil for U.S. consumers.

One of the symbols of the 1970s energy crisis is long lines of cars waiting to fill up. Often, stations operated on a first-come, first-served basis. Basta said it never really got that bad here, but he remembers that the warnings sounded then went largely unheeded.

“Now it’s starting to hit the people, but they warned the people back in the ’70s that this was going to happen, but everybody always thought there would always be enough of everything,” he said. “That’s what I try to tell my kids, but they don’t listen.”

Ron Hocker was working at an oil refinery in Commerce City during the oil crisis of the 1970s. He said he understands the mechanics behind the gas situation of today, but 30 years ago it was all a scam, he said.

“There should have been no lines in the ’70s; we had plenty of gasoline,” said Hocker, filling up a diesel tank Wednesday at the Shell station at Colo. Highway 119 and Interstate 25, where diesel was $2.79 a gallon. “When I worked at the refinery there in the ’70s, every one of those tanks was full of gasoline. I think it was a contrived shortage.”

OPEC slaps United States

The early 1970s was an interesting time in America. The Vietnam War was winding down to an ignoble finish, Richard Nixon was fighting his own internal wars and inflation was starting to gain serious footing across the globe.

The Organization of Petroleum Exporting Countries, a cartel formed as a way for oil-producing countries to have more control over their own fate, had been quiet since its inception in 1960.

But two things happened that woke up the sleeping giant that OPEC had become. First, in an effort to stem inflation, Nixon put a freeze on prices, including oil, in March 1973.

In October of that year came the Arab-Israeli war, called the Yom Kippur, or October, War. The United States backed Israel and, though the war was over by November, the members of OPEC got royally upset.

So upset that on Oct. 17, OPEC slapped an oil embargo on the United States and jacked the price of oil up 70 percent to the United States’ Western allies. Prices went from $3 a barrel to $5.11 overnight; by January, it was up to $11.65.

On these shores, panic ensued. Stations were limited in what they could sell, prices were higher than anything Americans had seen before and stories of people stealing tanker trucks littered the evening news.

In 1974, Congress enacted a national maximum speed limit of 55 mph to save fuel, and Detroit was told that its new cars had to meet energy-efficiency standards.

At the height of the crisis, gas hit about $1.20 a gallon.

Katrina a knockout blow

Jack Edwards, an adjunct professor at the University of Colorado and a veteran of 37 years with Shell Oil, said he doesn’t see many parallels between what’s happening now and the 1970s. The current situation is worse, he said.

“We began to be a big importer back in the ’70s, and that hasn’t been arrested,” said Edwards, who was working in Houston during the early ’70s.

Asked about price gouging by the oil companies — then or now — Edwards was reserved in his judgment.

“I think that’s partially true, but it’s easy to blame the companies who are trying to make money off the oil,” he said. “Maybe there was some of that, but they weren’t shutting down production, either.”

Hurricane Katrina eliminated production and distribution of gasoline in the Gulf of Mexico, putting the squeeze on a country already contending with ever-increasing competition in the world oil market from China.

“The demand is there, but they’re paying the price because of the paucity of supply,” said Edwards. “That’s bound to be transferred to the consumer. Somebody’s going to have to pay.”

Edwards also noted that no new refineries have been built in the United States in decades, another reason for lack of supply. And on top of Katrina, he noted, the hurricanes that hit Florida last year “also affected the offshore platforms in the Gulf of Mexico, but I think it’s worse now than then because they were able to repair those fairly quickly. I don’t know if they’ll be able to do that this time.”

George Will, in his column in this week’s Newsweek, noted that, factoring in inflation, gas would have to cost about $3.12 a gallon to match the highs of the 1970s. Will’s column was written before Katrina, and gas is already well above $3.12 in some parts of the country.

Future is uncertain

What the future holds is unclear. Edwards said he’s worried about something we haven’t even heard much about yet: What if the steel pipelines underneath the Gulf have been damaged? What would it cost to repair them, and how much longer would it be before production and distribution in that part of the world could get back up to speed?

Already, at minimum, experts say we’re probably looking at months to repair the damage.

“(The price of gas) was high then because of the Middle East embargo,” Edwards said. “And we had to recover from that, and we did.

“This time, I think it’s likely to stay (high), particularly with the things that have just happened in the Gulf of Mexico. We’ve knocked off 1.5 million barrels a day of production, and it’s going to take us a long time to get that production back up.”

For people like Hocker, those words are discouraging.

“I depend on diesel fuel to make a living. I have to buy it,” said the former refinery worker, who is now in the pipeline business. “I just don’t know where it’s going to end.

“If it gets to $4 a gallon I still have to buy it because I have to make a living, but obviously that cost is going to be passed on to my customers and the consumer.”

Tony Kindelspire can be reached at 303-684-5291, or by e-mail at tkindelspire@times-call.com.


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