During the winter of 1972-73 Americans had problems getting enough heating oil due to shortages. The result was that some factories and even schools temporarily closed down. Also, in the summer of 1973 some had difficulty getting enough gasoline for their automobiles. Europeans had similar problems. So even before the Arab cutoff of oil to the United States the fact of the matter was just as the Los Angeles Herald-Examiner reports: “The U.S., which currently has no spare oil production capacity, is becoming increasingly dependent on foreign oil.” And the New York Times adds:

“There is general agreement in industry and government that Western Hemisphere sources will be unable to expand their shipments to the United States significantly and that the bulk of the future increases in crude oil imports will have to come from the Eastern Hemisphere sources in the Middle East and Africa.”

Canada, a major supplier of oil to the United States, is also having its problems. So it may soon have to curtail its oil and gas exports. The Toronto Star relates:

“Canada faces a return to the era of the horse and buggy and the dirty coal furnace unless we protect our [oil] resources against rapid depletion by the energy-hungry United States, warns Toronto geophysicist J. Tuzo Wilson, one of the world’s most distinguished scientists.

“Demands on dwindling supplies of oil and natural gas could plunge North American civilization into a desperate crisis within 10 years, he says . . .

“‘The demands for gas and oil are so insatiable and rising so rapidly that it is clear that Arctic petroleum reserves offer no long-term solution to the problem of energy supplies,’ writes Wilson.”

That is why authorities state that, no matter what happens, the price of energy in all its forms, especially oil, is bound to go up in the future. The days of cheaper fuels, of low-priced gasoline for automobiles, are gone.

Because of the much higher costs, and growing needs for imports, the consuming nations have to pay out more and more money to buy the oil. This worsens the deficits in their balance of payments with other nations. In other words, they spend more than they are able to make. This increased spending of such vast sums is bound to heat up the already bad inflation in those nations. It pushes higher the prices and costs of many things, not just oil. This is because people who use oil products pay higher prices, and they will eventually demand higher wages to make up for it. Higher wage costs make manufacturers increase the price they charge for their products. So the higher and higher cost of oil fans the flames of what is already bad inflation.

The United States, the foundation of the Western world’s economy, has already been having grave problems with its balance of payments. For many years the country has been spending more money than it has made overseas, going farther and farther in debt to other nations. The payments it will have to make for rising oil imports will worsen the situation.

To illustrate: during 1973 it is estimated that the United States spent about $7 billion for oil imports. By 1975 economists expect this to rise to $15 billion. By 1980, says James Akins, American ambassador to Saudi Arabia, the cost of imported oil “would be more than 40 billion dollars a year in outflow.” Such staggering payments would be very difficult to make. Few experts think that the United States would be able to export enough products to pay for all of that. It becomes apparent, then, why the oil problem is called a crisis.

The situation is not much different for Canada, western Europe and Japan. All those nations will have growing difficulty paying for the staggering quantities of oil they will have to import in the years just ahead.

Yet, what if these nations are not able to pay for that oil, or for some reason supplies are curtailed? Then the industrial way of life of North America, western Europe and Japan, as we know it today, will be drastically changed.

Since the Soviet Union has large reserves of oil, it is not confronted with such shortages. It, together with Romania’s smaller oil fields, can supply the Communist nations of eastern Europe. So the Soviet Union and its friends are in a good position. So also the Arab and Moslem nations of the Middle East and North Africa, and their friends.

But that is not the case with North America, western Europe and Japan. They already have a problem getting enough oil, and that problem can only grow in the next few years. What it really means is that every person living in such countries will have his life affected one way or another. The cost of things, the entire way of life of those nations, will never be the same again.