What did we learn from gas rationing in the 1970's?

A benefit of being old, which I am, is I’ve lived through many events that have repeated. As a result, senior citizens like me have a longer perspective than younger people.  Consequently, sometimes seniors like me can more accurately  predict where current events are headed by remembering what happened with similar situations in the past.

A good example is today’s challenge with gas supplies and gas prices.   For several months, we’ve gone through reduced supplies of oil, from which gasoline is derived, and as a result gas prices have risen.  Compared to early this year, pump prices are up 36%, and compared to 2020 pump prices have risen over 50%.  Also, because gasoline is a key factor in delivering numerous products and services we use, the prices of many other items have also become significantly more expensive.

The war with Iran is the major reason behind gas price hikes.  The Middle East, where Iran is located, is the location for much of the world’s oil production.  Not only has Iran’s oil production been disrupted, but so too have oil supplies been disrupted from numerous other countries in the region.  And when the supply of any product declines, but uses of that product by consumers and businesses don’t change, prices of the product and its related products will increase.

Interestingly, we’ve been through this story before, and I was there.  In the 1970’s there were two phases of turmoil in the Middle East. The first in the early 1970s was prompted by conflict between Isreal and some Arab counties, and the second in the late 1970s occurred as a result of the Iranian Revolution. Both resulted in fighting and instability in the Middle East.  Consequently, oil supplies from the Middle East were disrupted.  Indeed, for a time the disruption included an oil embargo to selected countries, included the U.S.

Hence, oil supplies dropped and oil prices jumped. Gas prices surged 140% over the decade.  There were real concerns that gasoline supplies in the US would disappear.

Obviously, people and businesses in the 1970s that relied on gas for travel were concerned about higher prices, just as people are today.  But in the 1970s, there were some unique approaches to dealing with the situation.  The question is, what did we learn from them?

During the first gas crisis of the 1970s, spanning 1973-74, 33 states – including North Carolina – implemented an odd-even numbered gas buying system. Drivers with an odd -numbered license plate number were restricted to buying gas on odd-numbered days.  Similarly, drivers with an even-numbered license plate number were restricted to buying gas on even-numbered days. During the second oil crisis of 1979-1980, the system was revived for all states.   Incidentally, “0” is considered an even number.

The major goal of the odd-even system was to assure all drivers they would have access to gas. There were fears that some drivers would overbuy and cause supplies to run dry. It was hoped that with drivers knowing everyone couldn’t buy gas when they wanted, this would cause drivers not to overbuy.  Some states went a step further and put gallon limitations on the number of gallons purchased.  But even with these buying restrictions, some gas shortages still occurred.

Anyone who lived through this era as a driver has one big memory, that of “gas lines.”  While the odd-even buying system as well as the limitation on gallons bought in some states were designed to eliminate the worry among drivers that gas supplies could run out, it didn’t work.  Regardless of whether your day to buy gas was an odd-numbered day or an even-numbered day, drivers were still concerned gas supplies would disappear. Hence, on every day long gas lines at the gas pumps became common.  Drivers weren’t willing to miss the chance of buying gas before it could disappear.  I can remember waiting for hours to buy gasoline. This was also in the days prior to cell phones and laptops.  The loss in work productivity was enormous.

In today’s gas situation, there have been a few states that have considered limiting gas purchases.  But most discussions of helping drivers have focused on reducing or eliminating gas taxes. I’ve heard no talk of bring back the odd-even buying system or something similar.  It appears policy-makers are content to let the economic market work.  That is, with high gas prices, drivers are naturally motivated to limit how much they drive and to use the gas they buy for their most important driving trips. Also, research shows high gas prices have motivated more people to work-from-home, if they can.

Interestingly, with the current gas price issue we face today, there’s been no widespread talk of using the approaches of the 1970s. Have we learned the lessons from the 1970s of restricting gas purchases?   You decide.

 Walden is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.  His new book, “North Carolina in the Anxious Age” is available from The UNC Press.