Forty Years Ago The 1973 Arab Oil Embargo Battered The Global Economy, But It Also Helped Expedite Better Fuel Economy

“There’s no better argument for reducing our dependence on foreign oil than news reports from the Persian Gulf.” - Sen. Richard Bryan (D-Nev.), sponsor of the Motor Vehicle Fuel Efficiency Act of 1991.

Forty years ago this weekend Americans got a sour taste of Middle East geopolitics when oil-producing Arab countries used crude as a weapon against the United States for its support of Israel during the Yom Kippur War, proclaiming an oil embargo in the winter of 1973-74.

Thanks to the embargo (which was extended to Western Europe and Japan) and production cuts by the Organization of the Petroleum Exporting Countries, the effects of the 148-day shock to the global financial system lasted for years. It’s hard to imagine something like this happening today, but picture the price of a barrel of crude, currently around $100, suddenly shooting up to $400 a barrel and staying there until the middle of next March and you get an idea of what happened that winter.

But another lasting effect of the embargo is that it helped raise awareness of fuel consumption. Even before the embargo Republican President Richard Nixon was making environmentalism a significant (and less insidious) part of his legacy, namely by founding the Environmental Protection Agency (EPA) in 1970.

Secretary of State Henry Kissinger became the first high-ranking U.S. official to bring up energy self-sufficiency, and just three weeks after the start of the embargo the Nixon administration launched Project Independence, an ambitious plan to make the U.S. self-sufficient by 1980 by promoting energy conservation and innovating alternative energy. The plan failed, of course, but it was the first real effort by the U.S. govenrment to tackle the country's addiction to foreign oil, and to oil in general.

While compact vehicles were already gaining market traction before the embargo, they really began to speed off after it — something that was long overdue. The big heavy cars with the big thirsty engines that were being produced in the post-war era took more fuel to operate than Ford’s Model T, which was getting between 13 and 21 miles per gallon, according to Ford’s historical data.

The average car on the road until the late 60s was lucky to get 10 miles to the gallon, and in the early 70s the average passenger car fuel economy was under 14 miles to the gallon, according to Pew Environmental Group. But by the late 70s the average passenger car mpg had risen quickly, thanks in large part to the rise of the subcompacts like the Datson 200SX (29 combined mpg), the Plymouth Arrow (31 combined mpg) and the Honda Civic (33 combined mpg). Suddenly consumers and the federal government cared about fuel economy.

A 1977 Department of Energy gas mileage guidebook offers some of the earliest efforts by the federal government to track fuel economy in the auto marketplace. Automakers were still indulging consumers by churning out some crassly inefficient mid-sized sedans. If you were in the market for a gas guzzler in 1977 you could buy the Dodge Monaco, a mid-sized sedan that gave up 9 miles per gallon in the city, or the Chrysler Cordoba, with it's "rich Corinthain leather" and its combined 15 mpg, considerably lower than the average contemporary full-sized pickup truck.

Eight years after Republican President Richard Nixon launched the Environmental Protection Agency (EPA) to tackle the huge problem of air pollution that was choking America’s urban centers, the U.S. government implemented Corporate Average Fuel Economy (CAFE) standards and tasked the EPA and with tracking fuel economy. While CAFE standards is a popular punching bag for critics that believe the government has no role in telling the private sector what to do, the National Academy of Sciences concluded in 2002 that without CAFE standards Americans would have been at the time consuming 14 percent more gasoline.

In 1978, the first year the U.S. Department of Transportation began tracking average fuel economy, the combined highway and city driving for a passenger car in the U.S. was a touch under 20 miles to the gallon. By 1991, the year the U.S. was pulling out of its first Gulf War, the average combined mpg for a passenger car had increased to more than 28 mpg. This was the same year Sen. Sen. Richard Bryan, D-Nev., was banging the gong over problems in the Middle East and sponsoring a bill to boost CAFE standards. The bill failed after an outcry from the auto industry, which claimed that the technology wasn’t around to meet that benchmark.

Today’s average passenger car has a combined mpg that is still four miles shy of 40 mpg after mroe than a decade of mass-produced hybrid technology, but the rise of fuel economy has been swift, historically speaking. In just 40 years since the oil embargo the average passenger car in the U.S. has gone from about 13 miles per gallon to 36, a 177 percent increased in distance. Compare that to the previous 40 years of a self-regulated industry paying virtually no attention to fuel economy and going backwards on fuel economy.

If anything good came out of the scarcity of oil in that winter of 1973-74, it’s that it helped put fire under efforts to make cars more efficient. At least we can thank the Arab states for that.