Wednesday, July 30, 2014

The weekly Daley: Remember the oil embargo?

From page A4 | March 08, 2013 |

I remember having to buy gas only on odd or even numbered days back in the early-mid ’70s. The day was determined by the last number of your license plate — either odd or even. I don’t remember if we had designer plates then or how they were classified. I didn’t have one, still don’t.

Why was there no gas at the gas stations? Well, the explanations varied. The “Arab Oil Embargo” was caused, simply enough, by the oil-producing countries most of which happened to be Arab at the time. Oil from Nigeria and Venezuela, Iran, et. al. that were non-Arabic countries wasn’t any easier for the average motorist to find. The more we heard about the scarcity of oil, the higher the price and the more difficult it was to find — naturally. Was there a sudden, actual, physical shortage of oil in the ground everywhere in the world? Who knew? Was it being cynically withheld by greedy station owners, greedier distributors and even greedier oil companies? Were the OPEC nations just messing with us to see if they could get away with it? I never found out a satisfying reason for the oil embargo.

Smart heads talked about investors and futures traders jacking up the prices and then selling off shares they’d bought much cheaper and turning remarkably obscene profits. Sounded plausible, as did most of the other explanations. Who do you know that could actually understand and then explain in layman’s terms what was behind the oil “shortage?” Probably about as many as I know or knew at the time: None.

And then one day, we could go back to filling up any time we wanted to. The “Arab Oil Embargo” had ended. I don’t recall anything like fireworks being shot off or schools closing to celebrate the great day. It was just really good to be able to get gas when you needed it rather than in anticipation of it not being available — maybe ever.

“Somebody” had played us like the proverbial fiddle. Somebody, who I’m sure was really many, many somebodies in many, many places, using many, many marketing tricks and business devices to overwhelm our better senses, sucked the money out of our wallets and confirmed that we are only pawns in their game. And then they did it again and again. And each new time it created another crisis of credibility. Whom does one believe?

Market manipulators, Hurricane Katrina, Superstorm Sandy, the election of 2012, the Mayan End-of -the-World scare. They and a hundred other uncontrollable things have led to gas prices jumping 50-cents or more a gallon in the past couple of weeks.

Talking to my brother the conservative the other day reminded me of the Arab Oil Embargo. He described a nightmarish scene at a gun show in Redding, wherein not only could he not find a parking place within a reasonable walk from the convention center, he said he could hardly move through the crowds that took up every square inch of space once he did get inside.

Lots of different kinds of guns were simply not available, he said. And bullets. Practically no bullets. They’d been bought up at incredible rates in incredible volume. One vendor, he said, was digging into a box or barrel, pulling out five or six 30-06 rounds, putting them in sandwich bags and selling them for about $25. Normally they would go for around a dollar apiece, he said.

The reason for the shortage? Ah, well, there’s the question isn’t it? Extreme and excessive demand. New laws that will not only outlaw guns but other new laws that will (maybe already have) imposed severe limits on the manufacture of ammunition. Severely overburdened manufacturers who can’t keep up with the extreme and excessive demand brought on by the belief that bullets may soon be outlawed along with all the guns they would be used in. All of the above and more, much more.

Online and print reports quoting manufacturers tell us that there’s been no law curtailing or limiting the amount of ammunition they can produce. They say they are running three shifts a day and paying lots of overtime to try to keep up with the demand and mostly aren’t keeping up. They generally credit Internet-fed rumors of draconian governmental restrictions just around the corner that will outlaw some or all guns and ammunition.

While some retailers are gouging customers with sky-high prices, the reports I’ve seen suggest that most in the business are not seeing huge profits. They’re simply selling in two days what they would have sold in a year — and having empty shelves on the third day. Similar runs on guns and ammo happened in 2009 — when Barack Obama became president — and in 1994 when the “assault weapons ban” took effect. Same reasons, same unfounded and unwarranted fear.

A few years from now, maybe just a few months from now, I predict that people standing in long lines to pay outrageous prices for bullets today will look in their mirrors and shake their heads. And those of a certain age may utter something like, “I can’t believe I fell for the old Arab Oil Embargo again.”

Thanks to Don Rood at Mosquito Creek Outfitters in Placerville for his information and insight into this issue.

Chris Daley is a staff writer and columnist for the Mountain Democrat. His column appears each Friday. 





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