Oil Shock I and II – 1973 and 1979

1. Oil Shock I and II – 1973 and 1979 Made in Japan

3. Six Stages of the Energy Crisis • Between 1955 and 1971, demand in the U.S. was outstripping supply • 1972 rise in oil prices – OPEC • 1973-74 – Embargo and panic • 1975-78 -- President Ford – focus almost entirely on supply – no long term policy • 1979 – Iran and a Second Oil Crisis • 1980-84 – Regan Era – OPEC overproduction and new sources

6. Nye – pp.222-3: “The oil shock of 1973-74 was a symptom, not a cause. The shortages revealed the energy dependence and the vulnerability that the United States had been building up for decades. The high-energy middle-class standard of living was not a victim of the energy crisis; it was the source of the crisis. Compared with equally affluent Europeans, Americans used roughly twice as much energy per capita. Half the difference was directly attributable to their transportation systems, and much of the rest was due to their preference for widely spaced detached houses.

15. We will mine more, drill more, cut more timber."--Secretary of the Interior James Watt

17. World energy use Total ~400 Quadrillion Btu Coal Geothermal, wind, solar, etc. Gas Biomass RE (13.4%) Nuclear Hydro Oil (34.9%) World: ~84 million barrels/day; US: ~21 million barrels/day

18. U.S. Energy Consumption Energy Information Administration / Annual Energy Outlook 2006

19. U.S. Energy Production Energy Information Administration / Annual Energy Outlook 2006

20. Electricity Generation Energy Information Administration / Annual Energy Outlook 2006

21. Fertilizer Production Efficiency

22. Turning Petroleum into Food or Fuel Frank Moore – Black Pillow (1996)

23. Energy and Crop Yield

25. CerealShortfall

27. M. King HubbertOctober 5th, 1903 -- October 11th, 1989 "Our ignorance is not so vast as our failure to use what we know."M. King Hubbert

30. MITI – Ministry of International Trade and Industry – Behind the Success of the JapaneseAutomobile Industry • Organizational Structures • Policy Programs • Conscious Planning

31. W. Edwards Deming – 14 Points • Create and communicate to all employees a statement of the aims and purposes of the company. • Adapt to the new philosophy of the day; industries and economics are always changing. • Build quality into a product throughout production. • End the practice of awarding business on the basis of price tag alone; instead, try a long-term relationship based on established loyalty and trust. • Work to constantly improve quality and productivity. • Institute on-the-job training. • Teach and institute leadership to improve all job functions. • Drive out fear; create trust. • Strive to reduce intradepartmental conflicts. • Eliminate exhortations for the work force; instead, focus on the system and morale. • Eliminate work standard quotas for production. Substitute leadership methods for improvement. • Remove barriers that rob people of pride of workmanship • Educate with self-improvement programs. • Include everyone in the company to accomplish the transformation.

32. Complex Factors Contributing to the Japanese Success Story • Floating Yen to Dollar Values • Tariffs • Import Quotas

33. 1936 Toyota

34. 1957 Toyota Crown

36. 1969 Corona

37. Honda History

46. 1969 Datsun 240Z

48. 1968-1971 –The American Automobile Industry Began to Die • John Jerome, The Death of the Automobile: The Fatal Effect of he Golden Era, 1955-1970 (1972). • Helen Leavitt, Superhighway-Super-Hoax (1970). • Kenneth Schneider, Autokind vs. Mankind (1971). • Emma Rothchild, Paradise Lost (1973).

49. American Lemons of the 1970s • 1970-1976 Ford Pinto • 1971-1975 Chevrolet Vega • 1971-1977 Ford Torino • 1975-1980 AMC Pacer • 1977-1980 Dodge Aspen • 1978-83 GM 350 Cubic inch Diesels

50. Post Oil Shock II Nadir -- 1979 • The small-car share of the U.S. market doubled from 27% in 1978 to 54.2% in 1979, then rose to 61.5% by 1981. • The share of the U.S. market held by imports correspondingly increased from 17.7% in 1978 top 27.9% in 1982