Europe facing the Russian version of the Arab oil embargo

You may remember the Arab oil embargo of 1973-74, and not favorably. The United States learned a lesson from the embargo and took steps to become energy independent. Now that Russia has decided to hit the European Union (EU) with a mini natural gas embargoalthough it does not use this terminology, the EU must quickly learn a similar lesson.

The developments that led to the Russian embargo on EU natural gas are quite similar to those that preceded the Arab oil embargo.

As the US State Department explains the story“During the 1973 Arab-Israeli War, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) imposed an embargo against the United States in retaliation for the American decision to resupply the Israeli army and gain influence in post-war peace negotiations.

Other nations that supported Israel were also included in the embargo, which banned oil exports to sanctioned nations.

The issue today is US and EU support for Ukraine (as opposed to Israel in 1973) after Russia’s brutal invasion. In response, Russia has temporarily natural gas flows stopped or reduced to EU countries.

Of course, one difference between now and 1973 is that the United States still wanted and needed crude oil from Arab countries, which were willing to forego some revenue from reduced oil sales. In contrast, the United States and the The EU voluntarily reduces its natural gas purchases from Russia, partly because Russia uses these revenues to pay for its war.

The Arab oil embargo led to long lines at gas stations, significantly higher prices for gasoline and other items, and a loss of leverage for the United States in international affairs.

President Nixon responded by announcing an effort to increase oil production in the United States, although the oil reserves available through the extraction technology then in use had dwindled. Fortunately, diplomatic efforts intensified, and in March 1974 the embargo ended.

Even so, Congress became concerned and passed legislation to create the Strategic Petroleum Reserve and CAFE standards (i.e. require cars and trucks to meet certain miles per gallon targets) and ban the export of crude oil. The goal was to achieve energy independence from the United States.

But then in 1978 Congress took a wrong turn and passed the National Energy Act, which increasingly focused on mandating or subsidizing various types of alternative energy sources. But while costs and subsidies increased over the next few decades, alternative energy sources did not increase, at least not by much.

The United States eventually achieve energy independenceor almost, but only in 2019 or 2020. And it was not due to the widespread expansion of renewable energies, because they are not yet very widespread.

Rather, it was the fracking revolution, combined with horizontal drilling, beginning in the mid-2000s that opened up vast new fossil fuel reserves in the United States. These advances have allowed us to produce enough natural gas and almost enough oil to meet our own needs and to become the world’s largest exporter of liquefied natural gas (LNG). And that meant we were no longer the energy hostage of other nations bent on punishing us for our foreign policy decisions.

The European Union has not learned this lesson. Although he was encouraged to embrace the hydraulic fracturing revolution, it never really was.

President Trump urged Germany to back down the Nord Stream 2 gas pipeline, which would have made Germany and the EU even more dependent on Russian natural gas. Germany rejected the recommendation, until the invasion of Ukraine.

While France has continued to embrace nuclear, which does not emit carbon, Germany has started to shut down its nuclear power plants after the Fukushima incident in Japan.

But most EU countries have turned to renewable energy (wind and solar power), boasting of their clean energy and bona fides that save the Eartheven as they quietly relied on Russia to supply them with the fossil fuels they needed.

Today, the EU is enduring Russia’s version of the Arab oil embargo, largely because it has dismissed multiple warnings over years that Russia could and would use Europe’s energy dependence against she.

The EU is trying to increase the production of fossil fuels, including restart and coal supply to closed power plants.

The EU could experience gas mains and millions of its citizens may have to endure part of the coming winter without heating. Already, Berlin turns off the lights at certain monuments and historic buildings to save energy. We do not yet know what challenges Europe will face.

But one thing seems clear: EU countries will finally learn the lesson of the Arab oil embargo.

Merrill Matthews is a Resident Scholar at the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews.