Remember the fall of October 1973?
That’s when the Arab segment of the Organization of Petroleum Exporting Countries (OPEC) had American motorists by their fuel filters.
They embargoed oil deliveries to the United States in response to American help for Israel during the Yom Kippur War.
It was during a period when national wage and price controls were put in place by Richard Nixon — yes, a Republican president.
What happened were severe gas shortages.
You could buy gasoline for 65 cents a gallon in most parts of Northern California providing you could find it.
Some stations limited gas sales to five gallons per customer. Others sold gas by appointment only. Regardless, gas lines routinely formed that backed up in some places for more than a mile at a time taking customers an hour to reach the pumps.
California finally went to a rationing system where vehicles with license plates ending in odd numbers could buy gas on odd numbered days and those with even numbered plates could buy on even numbered days.
It’s safe to say people thought most of the time about only one thing — buying gas.
The scene repeated itself in 1979 when the Iranian Revolution cut off oil exports from that country and reduced the world’s crude supplies by 4 percent.
That time around there was no price controls on oil. Gasoline in California started climbing from 80 cents a gallon to a $1 and beyond.
It had a huge psychological impact on people in terms of their perceptions of economic well-being. Californians that started driving during the early 1970s paid 50 cents a gallon. Those that started driving in California in the 1920s recalled gas prices as low as 20 cents a gallon. Gasoline at $1 a gallon was considered crippling. Many believed if $2 a gallon gas at the pump ever arrived it would collapse the economy. Crude oil prices soared from $3 to $12 per barrel.
In the late 1990s key government bureaucrats started predicting $5 a gallon gasoline by 2015. Politicians keen on pumping up other sources such as ethanol started pushing for policies that would inflate gas to $6 or $7 a gallon and to use tax subsidies for alternatives to fossil fuels for national economic and security reasons.
So now with 2015 just 44 days away, America is far from the cusp of $5 a gallon gasoline.
It is expected to slip below $3 a gallon everywhere in the United States.
It is already below $2.90 a gallon in some places in the Golden State despite the fact Californians have to use more expensive reformulated gasoline primarily made from oil from the North Slope and imports.
The world isn’t coming to an end. Chalk another one up to American private sector ingenuity not restricted by government policies.
Fracking has made the United States the key player in the world oil market reducing imports and shipping more oil out. As a result, demand for OPEC oil is falling forcing several countries to act unilaterally to lower prices in a bid to keep income flowing to cover debt load and their country’s standard of living. Oil, after topping $100 per barrel just three years ago has dropped below $75 a barrel.
Of course, the Wizard of Oz policies put in place in Sacramento to deal with greenhouse gases will interject a hidden tax of 15 cents per gallon starting Jan. 1 at California gasoline stations. That is because refineries in the state are being forced to “buy” greenhouse credits in order to continue operating. They are not increasing air pollution. Nothing changes on Jan. 1 except that state wants greenhouse levels returned to 1990 levels by 2020. Forget the fact greenhouse levels have dropped significantly and that the state’s pollution has gone from 29.7 million in 1990 to 38.3 million in 2013.
As greenhouse taxes on refineries are ramped up economists expect the hidden tax to jump from 15 cents to nearly 80 cents a gallon by 2020.
Architects of Assembly Bill 32 that brought us the greenhouse gas tax contend oil companies don’t have to pass the tax on. Sure they don’t. Unlike the government they have to pay their bills and make a profit.
Oil companies are expected to triple and possibly quadruple oil train movements from the North Dakota fracking fields in the coming years. That will help keep costs down somewhat per gallon.
It’s kind of ironic especially since the politicians in Sacramento have earmarked 20 percent of all greenhouse cap and trade tax revenues the state will be raking in to go to high speed rail.
So thanks to government meddling in the marketplace, two wildly unpopular trains will be coming to California — high speed rail and oil trains.
I guess that isn’t as bad as having to sit in line for hours at a time wondering whether there will be gas left when you pull up to the pump.
At least one thing hasn’t changed since 1973: Extensive government tinkering with the marketplace is guaranteed to ultimately create misery for consumers.