We’ve survived oil shocks before – by changing our energy use. We must again

March 19, 2026 — 3:30pm

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We’ve been here before. In 1973, war erupted in the Middle East, the oil supply shrank suddenly and energy prices shot up, ending the “long summer” of post-World War II economic growth.

Back then, the economic shock prompted governments to reconsider not only the way we made energy and spent it but the very way we organised our lives and economies.

Richard Nixon’s administration introduced the first vehicle-efficiency standards, cars shrank, interstate highway speed limits were imposed. The US introduced daylight saving to reduce energy demand.

In Japan, prime minister Masayoshi Ohira even modelled a short-sleeved suit jacket salarymen could wear to toil on in offices with reduced air-conditioning.

It’s not clear that Ohira’s suits did much to cut oil demand, but the money pumped into research and development around the world certainly did. For example, Martin Green, a young Australian engineer, used some of it to develop solar cells efficient enough to drive a global revolution in renewable energy. Later global efforts to curb climate change would only accelerate the effort.

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By the time Vladimir Putin launched his invasion of Ukraine in 2022, prompting a second energy shock, the share of oil used in global energy production had fallen from 46 per cent in the 1970s to about 32 per cent, in large part due to the innovations spurred by the........

© The Sydney Morning Herald