After hard lessons of 1973, Europeans now in better shape to face oil crisis Unlike U.S., Europe made deep changes in energy policies

September 16, 1990|By Diana Jean Schemo | Diana Jean Schemo,Paris Bureau of The Sun

PARIS -- Since 1973, when the first world oil crisis quadrupled unemployment in Western Europe and furthered the plunge into recession, European nations have significantly reduced their dependence on foreign oil, making them far less vulnerable now to sudden price increases than they were 17 years ago.

Unlike the United States, which emphasized personal an household conservation measures that were quickly forgotten when oil prices dropped, Western Europe made structural changes in its energy profile after the OPEC price increases of 1973 and 1978.

"We're much better prepared than we were in 1973 and 1974," said Peter Odell of Erasmus University in Rotterdam, Netherlands.

The most dramatic example of this was in France, which ha decided in the 1960s to favor an independent energy policy.

After 1973, that translated into a radical program to replace oil dependence with nuclear power to the greatest extent possible.

AAt the present time, none of France's electricity comes from oil; 75 percent of its supply is generated by nuclear power and the rest by hydropower.

West Germany and Great Britain continued developing their har coal industries as an alternative to oil and also began putting more emphasis on nuclear energy.

Belgium has also increased its nuclear energy capacity.

To be sure, European countries must import a far greater percentage of their oil than does the United States, where roughly half the demand is supplied domestically. But most European countries, with the exception of Spain and Italy, have reduced their overall dependence on oil.

The most common indicator of energy efficiency is the rati between the energy used and a country's gross national product.

In this, France, Germany and Japan outpace the United States: they use roughly half the energy to produce one dollar of GNP.

In addition to developing alternative sources of energy, Wester Europe also increased the number of countries from which it imported oil.

"The European Community took the view that it was importan for members to diversify away from OPEC imports," recalled Michael Morrison of the Caminus Energy Ltd., based in Cambridge, England.

The measures emphasized in the United States -- insulating houses, requiring greater fuel efficiency in new cars from Detroit and the 55 mph speed limit -- are the least effective in the long run, experts said.

Over the years, Americans have forgotten the lessons of lon lines to pay high gas prices and once again are shopping around for bigger cars. Fuel use, which had begun dropping after 1979, has been edging up steadily since prices dropped in 1986.

Robert G. Skinner, director of the Office of Long-Term Plannin and Cooperation of the International Energy Agency, said studies by the IEA show that people have a remarkable tendency to short-circuit energy-saving measures over time.

Make sure the windows are well-insulated, and people will turn the thermostat up a notch. Give them fancy new energy-efficient light bulbs, and the lights will burn bright when nobody is home.

The high taxes governments impose at the pump have kep most Europeans from lapsing into gas-guzzling bliss.

Gasoline is sold by the liter here, roughly equivalent to a quarter-gallon, for pretty much the same price Americans pay for a gallon.

In Italy, France and Denmark, three-quarters of the price on a lite of gas is tax. In Germany, two-thirds goes to the government.

That has always encouraged Europeans to be more energy-conscious," said Mr. Morrison.

The high taxes mean that increases in the price of oil here ma be cushioned by a possible reduction in the government tax rate, making it psychologically easier for the consumer.

In addition, the industrialized countries now have reserve oi stocks that, in the case of the 21 industrialized countries of the IEA, could keep the member countries running for almost 100 days.

If the reserves were used simply to fill in half of the 4 million-barrel-a-day shortfall that has come with the absence of Iraqi and Kuwaiti exports, they would last more than four years.

But that has not produced complacency here.

The sudden rise in oil prices -- with no one knowing how long th increase will last nor how high it will go -- will undoubtedly pose problems for Western Europe, though not as dramatic as those of 1973.

The current price increase is roughly the same as the base pric before the increases of 1978 began.

The danger arises in the speed with which the price shot up -- 66 percent in a month -- and the possibility that a war could put at least some Saudi Arabian oil fields out of use indefinitely.

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