Just four years ago, amid fears that the Iran-Iraq war would cause drastic cuts in the world's oil supply, Saudi Arabian Oil Minister Sheik Ahmed Zaki Yamani delivered his then-favorite lecture to a group of western reporters as he passed through the Gulf kingdom of Bahrain.
Reform your profligate ways and conserve energy, he told reporters who scampered down the up escalator to keep pace with his imperious sweep from the Gulf Hotel.
Some day soon, he continued, the nations of the Persian Gulf will tire of spending their finite oil resources so the industrialized West can overheat houses, tool around in gas-guzzling cars and advertise its prosperity in neon lights.
The Iran-Iraq war still goes on but, contrary to the fears of 1979, the world today is awash in oil.
And as the 13 members of the Organization of Petroleum Exporting Countries gather Monday in Geneva in what many consider a do-or-die effort to defend the oil cartel's prices against the downward spiral of the world market, Yamani may well wish he never had pushed the cause of energy conservation.
For many of today's OPEC problems arose because the industrialized world followed his advice only too well by adopting strong conservation measures and substituting other fuel for expensive OPEC oil.
It reduced its dependency on oil by 10 percentage points over the past decade, from 54 percent of energy consumption in 1974 to 44 percent today. World demand today is 10 million barrels of oil a day less than it was at its peak in 1979, Michael Sterner, former U.S. ambassador to the United Arab Emirates and a partner in The IRC Group, a Washington-based consulting firm, reported in the current issue of Foreign Affairs.
As an example of the turnaway from oil, in the decade from 1973 to last year, the gross national product of the western economies increased by 20 percent, after accounting for inflation, while oil demand dropped 11 percent, said Daniel Yergin, president of Cambridge Energy Research Associates and a long-time believer that higher oil prices would force the industrialized world to practice energy conservation.
In the United States, the Department of Energy has calculated that energy consumption for each dollar of GNP has dropped by an astounding 22 percent since 1973 -- from 59,200 British thermal units for each dollar of GNP to 46,000 BTUs.
Americans, once considered the most wasteful of all energy users, drive more efficient cars for fewer miles and keep their homes and offices cooler in the winter and warmer in the summer.
These moves have brought about profound changes in OPEC's members position. Once sitting on top of the roost, these countries now face twin dilemmas that could determine their future economic and political stability: They either have to cut production to maintain the present price structure or lower the cost of their oil to match decreased demand. The shock waves of their present dilemma could spread throughout the Arab world, where even non-oil-producing nations such as Jordan and Syria depend on the largesse of their OPEC neighbors.
But the super-rich states of the Persian Gulf -- especially Saudi Arabia, Kuwait and the United Arab Emirates -- have developed a dependency on oil money to maintain their development programs and a high per capita income that they hope will prevent any uprising against the established governments. With the rise of a militant populist form of Islam, the rulers of the Gulf states have been increasingly concerned that they could fall victim in an Iran-style revolution.
Iran and Iraq, moreover, need oil revenues to finance their four-year-old war.
Poorer OPEC nations such as Nigeria need oil exports to survive and pay back large debts to western lending institutions and multilateral organizations, as does Mexico, an oil supplier that does not belong to the cartel but follows its pricing patterns.
At home, the changes wrought by the OPEC oil shocks have had a major effect on the way Americans live and work.
The average home in the United States uses 20 percent less energy now than it did in 1973 -- thanks to a combination of weatherproofing encouraged by government tax incentives and a more careful use of heating and air conditioning. As part of its massive energy conservation program, the giant American Telephone and Telegraph Co. decreed that none of its offices could be heated above 65 degrees in the winter or cooled below 80 degrees in the summer.
These changes influenced the way Americans dress. Three-piece suits regained popularity among men, and the demand for sleeveless winter dresses diminished with the end of the super-heated offices of the early 1970s. Now cardigan sweaters are in vogue for men and women to ward off the 65-degree temperatures of home and office.
Conservation measures, a direct reaction to OPEC-led price hikes that carried the cost of a barrel of oil as high as $34.50 in 1981, brought about sweeping changes in the world's energy picture and reduced the oil cartel's ability to affect prices.
As a result of the price increases, moreover, OPEC nations now face direct competition from new suppliers such as Mexico, Great Britain and Norway, whose oil fields would not have been economically feasible in the pre-1974 days of a $3.39 barrel of oil. Two of these countries, Great Britain and Norway, precipitated the current OPEC crisis by lowering the price of their premium North Sea oil almost two weeks ago, forcing OPEC member Nigeria to follow suit.
Now Mexico and Britain are among the top five suppliers of oil to the United States, whereas their oil exports were negligible as recently as 1973. OPEC sales to the United States have dropped by about 1.2 million barrels a day since 1974, while shipments from non-OPEC countries increased by half a million barrels a day.
Just four years ago, the Iran-Iraq War raised fears of a cutoff of Persian Gulf oil -- a major source for the United States, Western Europe and Japan. Recent figures show that 20 percent of the western world's oil now comes through the Persian Gulf compared with 40 percent in 1979.
Sterner said a little-known U.S. government study shows that oil shipments from the Gulf could be cut in half without causing shortages or a establishing a basis for price increases.
"The decline in world demand has been considerably larger than the loss of oil exports from Iran and Iraq" resulting from their war, the U.S. Congress' Office of Technology Assessment noted in a September report.
The gasoline lines of 1979 dealt the U.S. auto industry a near-fatal blow and vastly increased the popularity of small foreign cars, especially the fuel-efficient Japanese models. But the lines also brought about a revolutionary drop in gas consumption, which takes up one of every nine barrels of oil produced in the world. Cars driven in this country used an average of 26 percent less gas in 1982 than they did in 1973, the peak era for gas guzzlers, as Americans drove less and racked up better gas mileage.
Industry also did its part. AT&T's energy conservation measures saved the equivalent of 50.1 million barrels of oil between 1973 and 1982.
The company found that the profit motive became a driving force behind conserving energy as it did well by doing good. It saved an estimated $2.67 billion for its stockholders through energy conservation in that period.
American chemical manufacturers are another example of how the soaring price of oil forced reforms. James B. Borden of E. I. duPont de Nemours & Co., chairman of the Chemical Manufacturers Association energy committee, said industrywide energy efficiency improved by about one-third.
The use of alternative fuels also increased. France became the leading user of nuclear power, which now takes care of 40 percent of its energy needs, while Americans returned to one of the country's most abundant fossile fuels, coal. Coal use increased by about 18 percent , while the use of oil dropped 14 percent. Imports of crude oil, which reached a peak in 1977, dropped last year to 1973 levels.
Other forces have increased pressures on OPEC to reduce its benchmark price, which now stands at $29 a barrel.
As it became clear that oil supplies did not drop as a result of the Iran-Iraq war and the decline in demand continued, oil companies began reducing their stockpiles. This further reduced demand for OPEC oil and added to the downward price spiral, leading to OPEC's first price cut, in 1983.
The resulting world oil glut "was instrumental in bringing prices down to $29 a barrel," said Joseph A. Stanislaw, director of international economics for Cambridge Energy Research Associates.
Oil companies find it too expensive to hold on to stockpiles. And now, with prices heading down, they prefer to hold out as long as possible before stocking up for winter. As a result, Department of Energy figures show current stockpiles far below normal, running about 40 million barrels under the low side of the average range of inventories.