1973 Sinai Egyptian War Effects on Energy Policies and Lessons for Today

The first oil crisis that the Western countries have experienced after the WWII exploded in the aftermath of the 1973 Sinai War (6th of October). The resulting oil embargo had a strong effect on the Western economies which had to reconsider their dependency on Middle Eastern oil, increase their own production and apply ways for a more effective use of energy. A similar situation may affect the western countries in the coming months and years as a response to the Russia-Ukraine conflict is having a similar impact on Western Europe oil and natural gas supplies.

Egypt and Syria began the 6th of October at the same time attacking Israel on October 6, 1973, the day of the Israeli Yom Kippur holiday. However, after a few weeks, Israel, with support of its Western allies, has managed to fight Syria back in the Golan Heights and Egypt into Sinai and pushed both the armies into their own territories beyond Israel’s borders (Britannica 2022). To increase pressure on the Western countries supporting Israel to make Israel withdraw from the Syrian and Egyptian land, the OPEC (controlled mainly by Arab countries) has decreased its production of oil and natural gas and strictly limited exports to the USA, Netherlands, South Africa and other Western countries. The effect on the Western economies was a shock that has caused shortages in availability of oil and made the price of oil increase at its peak in 1974 (Brittanica 2022). The price spike of oil has led many Western countries to restructure their energy policies.

From the end of WWII up until the Sinai War, the price of oil in the West was cheap and extremely steady. Businesses, households as well as governments have been used to cheap gasoline and other oil products which created no pressure on increasing energy efficiency. The increase of oil price in 1974 has forced Western countries to seek alternative methods and re-consider gas production and create policies leading to more energy efficiency – car companies have started producing more efficient engines under The Energy Policy and Conservation Act (1975) that has set standards for maximum gas consumption for car models produced in through years (Henderson 1985). The Act has also set highway speed limit to 55 mph on highways as well as various urban and state roads speed limits to limit the fuel consumption (Henderson 1985). As a result of high oil prices, customers in the USA were not interested in large vehicles consuming large gas per gallon ratio. The US car manufacturing companies were not able to shift production from large to smaller vehicles quickly enough which has opened doors for Japanese and European smaller car manufacturers to enter the US market (Rapidtransition 2019).

The oil crisis has also created an interest in alternative fuels and energy production. The war and its resulting energy crisis has led to research and development of wind, solar and geothermal energy technology which was introduced in 1970s.

NASA became the government-funded program of wind turbine innovation and manage to push the industry quickly forward. During the 1970s and 1980s, Denmark have been developing wind energy harnessing and became a worldwide leader in wind turbine manufacturing (Rapidtransition 2019). Similar development can be seen in solar energy with the Solar Energy Research, Development and Demonstration Act of 1974 (Chu and Tarazano 2020) that has led to implementation of solar technology in the US by companies and homes.

Today, the world is facing a similar situation to the oil embargo of 1970s with the Russia-Ukraine war heavily impacting global energy prices. The main impact of oil and gas price increase is felt in the European Union which has been heavily dependent on Russian oil and gas imports (33% of oil and up to 40% of natural gas before the war was flowing to EU from Russia). As the sanctions from both EU and Russia take effect, the resulting price increase have been forcing Western countries to re-consider their energy policies. Most of the renewable energy policies have been in place even before the war as a response of the world to climate change (RePowerEU 2022). For example, the European Green Deal policy proposal is an extremely motivated investment and aimed to making EU CO2 neutral in 2050. Green Deal was approved by EU Parliament in 2020, almost two years before the Russia-Ukraine war broke out that started extreme increase in energy prices. At the start of the war in early 2022 when it was clear that the energy dependence of EU on Russian oil and gas would cause problems, many European politicians were calling for a delay of Green Deal policy as the change towards a more sustainable energy would be more difficult. It was like the EU would have to move to the last resort of coal-powered plants and other fossil fuel facilities.

The 2022 energy crisis has also shifted the European method towards nuclear energy. For several years, there has been a strong debate whether to include nuclear energy as a clean source of power in the European energy mix. Germany, Austria, and other countries were against this due to fears of a similar nuclear disaster that has impacted Fukushima power plant in Japan in 2011, where countries heavily dependent on nuclear energy such as France and Czech Republic supported the addition of nuclear energy as one of the official clean energy sources (The Economist 2021). environmental cost. Fracking to harness oil and gas is known to pollute groundwater with chemicals used in dissolving the rock bed, earthquakes and even contamination of drinking water. (Lallanilla 2018). While all these risks can be minimised by technology, fracking cannot be considered a clean energy source as it aims to produce fossil fuels which damage the environment by worsening the already serious effects of climate change.

Energy efficiency is another important aspect to consider when considering Green Deal. On one hand, there is production of energy whether by import or by own clean production. On the other hand, there is a strong push towards energy efficiency of buildings, transport, logistics and food production. Green Deal offers a variety of support for European countries aimed at building renovation, insulation, pressure on car makers to produce more energy-efficient cars and, mostly, a ban on production of new fossil fuel cars by 2035. In order to make such transition possible, EU has given funds to developing electric and hydrogen infrastructure, electric recharging and hydrogen filling stations (Commission Europa 2022). Even though the rest of the world that has not been impacted by Russia-Ukraine war as significantly as Europe, the European attempt may have a way for development of new technology and infrastructure that could be implemented by other countries. In addition to that, countries such as Egypt and India are already heavily investing in own solar and hydropower infrastructure as well as China, Indonesia and many of other countries. UAE is building a massive floating solar power plant that will be able to not only produce 25% of the country’s electricity, but also desalinate seawater and produce and store hydrogen for fuelling the country (Scene Arabia 2020).

In conclusion, it can be said that the current energy crisis started by the war between Russia and Ukraine with its effects on global energy prices may have a similarly positive effect on increasing energy efficiency and an even stronger global push towards renewable energy production in the same way the 1970s energy crisis helped the revolution in energy efficiency in the aftermath of the Sinai war of 1973.

Sources:

Brittanica (2022) Arab oil embargo. Available at: https://www. britannica.com/event/Arab-oil-embargo [Accessed 30 December 2022]

Chu, E. and Tarazano, D. E. (2020) A Brief History of Solar Panels. Smithsonian Magazine. [Accessed 27 December 2022] Commission Europa (2022) A European Green Deal: Striving to be the first climate-neutral continent. https://commission. europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en [Accessed 27 December 2022]

Henderson, D. R. (1985) The Economics of Fuel Economy Standards. AEI JOURNAL ON GOVERNMENT AND SOCIETY. JanFeb 1985.

Lallanilla, M. (2018) Facts about Fracking. https://www.livescience.com/34464-what-is-fracking.html [Accessed 27 December 2022]

Rapidtransition (2019) From oil crisis to energy revolution – how nations once before planned to kick the oil habit. https://www. rapidtransition.org/stories/from-oil-crisis-to-energy-revolutio nhow-nations-once-before-planned-to-kick-the-oil-habit/ [Accessed 27 December 2022]

RePowerEU (2022) REPowerEU: Commission steps up green transition away from Russian gas by accelerating renewables permitting. https://ec.europa.eu/commission/presscorner/detail/ en/ip_22_6657 [Accessed 30 December 2022]

Scene Arabia (2020) THIS TINY ISLAND IS NOW HOME TO THE UAE’S FIRST FLOATING SOLAR POWER PLANT. Available at: https://scenearabia.com/Life/Abu-Dhabi-Nurai-ResortIsland-UAE-First-Floating-Solar-Power-Plant [Accessed 30 December 2022]

The USA has also passed a large Inflation Reduction Act under the US president Biden in 2022, as well as healthcare and debt reduction, aims to motivate businesses and homes to invest into renewable energy (Whitehouse 2022).

A question remains how the USA will approach its oil and gas resources. The high oil prices in the aftermath of 2008 financial crisis has launched a movement of investment into new technologies that were able to place USA to no. 1 world oil producer but have also gathered renewable energy investments (Bloomberg 2012). On one hand, this has allowed USA to become less dependent on oil imports but came at a huge envi-

The Economist (2021) Nuclear energy united Europe. Now it is dividing the club. https://www.economist.com/europe/2021/10/30/ nuclear-energy-united-europe-now-it-is-dividing-the-club [Accessed 27 December 2022]

The Economist (2022) Energy security gives climate-friendly nuclear-power plants a new appeal. https://www.economist.com/ briefing/2022/06/23/energy-security-gives-climate-friendly-nuclear-power-plants-a-new-appeal [Accessed 27 December 2022]