A small ad in the paper here expresses the greatest change -- and threat -- to American life in the 1970's and beyond. "Are you involved in ARAB BUSINESS?" it reads. "Then you can't afford not to have our books on your office shelf." The titles listed are instructive: "Leading Merchant Families of Saudi Arabia" . . . "A Selected Directory of Business Contacts in the Arab World" . . . "Arab Markets, 1979-80" . . . "The Arab Trade Guide" . . . "A Practical Guide to Living and Travel in the Arab World."
Those words underscore what likely will be regarded as one of history's most significant revolutions. From the moment of the Arab oil embargo in mid-decade, the '70s saw a series of events that not only affected the lives of every American but literally each person in the world. The emergence of oil as an economic and political weapon has shattered American assumptions about the future and has had at least these effects:
It has ended forever the American age of cheap energy. It has affected perhaps permanently, the standard of living of the average American. It has touched off a world-wide inflationary spiral that seems out of control. It has resulted in the greatest transfer of wealth in modern times from one group of nations to another. And it appears to have ended Western control over world economic and political affairs.
While the decade now ends in somber circumstances for most Americans, for precisely the same reasons here in Houston the great boom of the '70s continues. Nationally, unemployment rises; in Houston it actually was dropping last month. Nationally, growth slows; in Houston, the city continues to gain some 5,000 to 6,000 new people every month. Nationally, bankruptcies and business failures are increasing; in Houston, they're declining. Nationally, car sales have plummeted; in Houston, they're keeping pace with last year's. Nationally, foreign-trade balances remain worrisome; in Houston, the port experiences huge traffic jams due to large shipments to the Middle East. p
A paradox of ironic proportions hangs over this self-professed "oil capital of the world." As the nation's energy picture becomes bleaker, Houston's becomes brighter. That, in a city and state where the most ardent expressions of patriotism abound.
"As a result of all the activity down here, why, the rest of the country can be having a depression, but, hell, you don't know it down here," says Hugh Liedtke, chairman of the board of Pennzoil. "I used to live in Pittsburgh and, God, we went through some of those recessions up there. People up in the alleys, you know. Burning stuff in the barrel. You came down here to Houston -- hell, they didn't know it was happening."
Houston was destined to be a boom town anyway. Throughout the '70s, dramatic shifts of population occurred. The move of Americans westward continued at an accelerating pace, spurring a demographic shift with major national political and economic ramifications. While births continued to exceed deaths in every region of the country during the decade, some startling figures are being tabulated by the Census Bureau now.
Along the Eastern Seaboard, the crowded and long economically dominant Northeastern states saw an outpouring of people permanently leaving for other areas. The same was true of the large North Central states. Each of those regions lost nearly 700,000 people in only a three-year period from 1975 to 1978. The so-called sunbelt states were the beneficiaries; they have been growing, as Census Director Vincent P. Barabba says, "at a phenomenal rate." A million more people moved into the South those years, and another 400,000 into the West.
In many ways Houston, with access to the Gulf and international commerce and an already dynamic economy, became the capital of the sunbelt. It has been Growth Center U.S.A., with all that that term implies.
Freeways and supermarkets sprouted everywhere. Apartment complexes (20,000 new units every year) and skyscrapers rose up out of the prairies. (The greatest of all, the Texas Tower, now is under construction. pWhen finished, you'll be able to see it from 50 miles way. It's a monument to the belief, here at least, that stature must be large to be impressive.)
No zoning regulations made order out of this explosion of steel and concrete. No mass transit system, not even a good bus line, prepared for the day when gas lines would grip the area, sending motorists into a panic and the structures that had been built into sudden peril. When you come into Houston now from the massive new airport some 25 miles away (but still within the city limits), you can experience what probably are some of the world's greatest traffic jams. "It's not as much fun anymore," an old friend said at dinner the other night. "After a while you get tired of always finding yourself behind another dump truck or being stopped by another red construction flag. Just to go to the shopping center has become an ordeal."
But more than anything else, Houston's growth in the '70s was stimulated by one factor -- the energy crisis. Some 24 oil and energy companies located in Houston after the embargo of 1974, setting off an enormous boost in spending. So while the nation may be in decline, here in Houston the profit margins are soaring.
"Our forecasts are based on the assumption that we're not going to get the big boost in energy spending we had in 1974," a banker says, "but that could happen. If it does, it will drive the national numbers down. But it will push the Houston numbers up."
Another banker turns that proposition around. "Our worst-case scenario for Houston," he says, "is a best-case scenario for the United States."
Whichever way, what happens in Houston affects us all, just as it reflects changing world fortunes. And that means, of course, what happens in energy.
To be in the oil business today is somewhat akin to being public enemy No. 1. Probably no group of Americans is regarded with more suspicion and distrust.The idea of the oil baron, the manipulator of the cartel and trust carving up markets and bribing legislators with impunity, is deeply ingrained among Americans anyway -- and with good reason. The old robber barons of the oil business did plunder the people, and some of the modern-day representatives have continued to act like dinosaurs in their social and political philosophies. But the oil executives are also an easy subject for caricature and the forming of stereotypes.
"Let me point out two things to you," says Hugh Liedtke of Pennzoil. "In World War II they called on the oil industry to figure out how in the world to support this huge war machine we had operating all over the world. They got together, and without a hint of impropriety they suspended the application of the antitrust laws. They did the job. Then along comes the Korean War and they do the same thing. In other words, when you get in trouble, why, they call on the industry.
"My God, the industry has got just as many Ph.D's as they've got at Harvard and Yale and Princeton and so on. The guys want to help and they know the answers in a lot of complicated areas -- and they have been systematically excluded. It's still amateur night up in Washington as far as administering what's going on. They've got a bunch of people who know just as much about the oil industry as I know about goat raising. They are not knowledgeable. They are not trained either by education or experience. As long as you have this conflict I think it's very unfortunate, because it's a huge industry and it could help. But the whole thing has been to generate distrust and division and I think it's too bad."
As those words indicate, Liedtke's hardly reluctant to speak his mind. A bluff-sounding oil man he is, but the record indicates he was correct about the impending energy crisis long before the wise men of Washington belatedly caught up with the obvious facts.
"Anybody in the business could see this shortage coming in the late '60's," he says. "Then the question was what do you do about it? And the facts of life are that we've done remarkably little."
He likes to tell of the time when he called on an assistant secretary of the Interior Department early in the '70s during the Nixon administration's first term. Liedtke was warning about energy problems coming, and saying the government had to lead, it had to inform the public. The bureaucrat disagreed: The government couldn't take the lead until a political consensus was formed. "We got into an awful argument," Liedtke recalls.
That anecdote is based on more than a self-serving memory. At about the same time in the '70s, Liedtke was expressing himself forcefully in writing as a member of the President's National Commission on Materials Policy.
"If the administration opts for such short-term masking tactics as unlimited imports of crude oil and various refined products for example," he said then, "we will effectively put the price structure of our domestic energy policy in Arab hands. Key Arabs are well educated. They will play it smart, I think, and keep the price just low enough to prevent us from developing our own reserves. We simply cannot afford this economically or politically.
"I realize that the fact I have spent all of my mature life in oil, gas mining, and pipelining in the eyes of some may not qualify me as being knowledgeable or objective. However, I have spent the last five years formulating and urging the policies included herein.I am determined to do everything reasonably possible to prevent my children and everybody else's from having to spend their entire lives paying for what I genuinely and deeply feel may be decisions which may look great today but within a year or two prove to be disastrous for this nation."
Throughout the rest of the decade, the record shows that Liedtke continued to sound the warning, year after year. What's been happening in the Middle East and the OPEC nations, he said publicly a year ago, "is the stuff of war." Today, he feels that even more strongly. "Yeah, it's the stuff of war. I believe that. It could blow up at any minute out there. That's terribly frightening. You know, they sink one ship in the Straits of Hormuz and, God, you've really had it for months. You can disrupt the entire world's economy, including this nation, as strong as it may be."
Liedtke, in short, is someone worth listening to. His concerns for the future go beyond oil and gas shortages. He sees the United States becoming increasingly short on the basic materials on which our industrial complex depends.
"In the coming 10 years," he says, "what I foresee are the oil and gas shortages being only the tip of the iceberg -- well, that tip's pretty much out now, it's a whole continent maybe -- but what is not being realized is that this nation is short of virtually every natural resource on which its industry depends. I'm talking now of high-grade copper and high-grade iron ores, on and on and on. It's going to get worse and worse for all raw materials as time goes by. I do not think it realistic to suppose that this country is going to be self-sufficient in probably any area."
That leads directly into the shoals of foreign policy, of attempting to work out new relationships between the developing nations and the Western world.
"The damn trouble is, without technology those countries are going back to weeds, back to jungle. The World Bank can give them all the money they want, but unless they've got technology those countries are not going to get developed. Somehow we've got to find a way of developing some kind of compromise between our system of economics and perhaps theirs.
"I think the same thing is true with Mexico, no matter how bad our relations seem to be getting right now. They're getting their licks in now because we've treated them like a bunch of wetbacks. And now they're going to treat us like a bunch of gringos for a while. But some kind of imaginative policy which really recognizes the joint interests which the nations have has to be implemented. They've got raw materials; we certainly have manufacturing capacity. We've got markets; they need them. It's a natural thing. And it extends throughout South America. Why we haven't worked hard on some kind of Western Hemisphere common market I don't know, but to my mind it needs to be examined."
Neither he, nor anyone else talked to for these articles, believes Americans will voluntarily conserve enough to end the Middle East stranglehold. Until new foreign partnerships are formed, or the United States goes into a wartime-like crash program to develop other forms of energy -- coal, solar, what have you -- every American will continue being held hostage by OPEC.
In the meantime, OPEC will continue charging more and more for oil until some day the world won't be able to pay for it. Which is about where America finds itself this weekend on the eve of the '80s. That "stuff of war" (probably) poses a greater threat than at any point in the last generation.
No decade, of course, stands alone, even though we treat each that way. And each marks as much an ending as a beginning. Until the '70s, though, Americans never really faced the idea that somehow our society, too, had limits. All our history and experience taught otherwise. We were a nation that gloried in endless frontiers. When the geographic limits of the continent were reached, we moved out into space for further exploration. When the natural resources of the bountiful land began to be depleted, we invented substitute ones. If we were the world's most wasteful society -- our goods were built for disposal and obsolescence because we always could make bigger and better ones -- we knew that our technology would rescue us. Someone, somewhere, would always invent something.
But the '70s have forced painful awareness. Our growth may not be inevitable and ordained; it may, indeed, be harmful. We may even be destined to enter an age of permanent shortages, one that promises to transform American attitudes and living habits as nothing that has gone before. Still, with all the evidence of the past decade before us, Americans are approaching the future wanting to believe the shortages are artificial -- the product of a conspiracy. After all, warnings about an energy shortage and an impending energy crisis are nothing new. We've heard them, off and on, for much of our lives. And paid no attention to them.
In a boardroom here in Houston they were showing an old television documentary. It was narrated 25 years ago by Edward R. Murrow. The point hammered home in Murrow's crisp, serious style was that the next generation of Americans faced a crisis. "There never was a nation that consumed so much coal and steel and oil and copper and lumber and water and strange minerals and everything that comes out of the earth," he says, looking directly into the camera, "and at the same time, gave so little thought to where it comes from." Then, his message:
"You may get a jolt this evening to realize that although America is the land of plenty, the plenty is giving out."
For an hour, Murrow interviewed leading Americans of the time -- scientists, engineers, geologists, business executives -- and they all gave the same forecast: The nation was heading into a critical period. As one of them told Murrow:
"For 50 years we have had, and have used, more energy than any nation on earth. This is one of the factors that have made us what we are today. But the demands for our goods and services are climbing so rapidly that we will have to increase the output of our total energy 100 percent in the next 25 years. How? The answer could be in the practical application of atomic energy and solar energy. But it is too early to estimate the contributions from these sources. For quite a while, we will have to rely on so-called conventional sources."
Watching that black-and-white TV production was like looking through the other end of a telescope -- a time warp, preserved intact, presenting its most disturbing message not for the audience intended, but for Americans unborn.
Murrow was wrong in his major premise. The nation received no jolt. That shock came later, two decades later, in the '70s.
Even in booming Houston, the private soundings on a decade take on a somber, muted tone. Nowhere, it seems do you get the old unquestioning faith that tomorrow inevitably will be better than today, that the abundant life we've always believed ours will continue. That doesn't mean people are awash in pessimism, but it's hard to find anyone who doesn't approach the coming years with concern, if not apprehension. Liedtke is no different from others.
He was talking about the world his children and grandchildren will inherit. It will be different, undoubtedly, he says -- different values, different attitudes -- but not necessarily a world Americans should fear. He, like others, sees more, not less, government in our lives; less, not more, material benefits in the form of giving up the dreams of everyone owning a home or of attaining other once-common comforts; more limited space, more crowding. Yet he also sees some benefits; cleaner air and cleaner water among them. "But not as clean air and clean water as you might think," he adds, "because in my view some compromises are going to have to be made with popular environmentalism. When people get cold enough and the economic shoe pinches, why, man is going to opt for man and not the sex life of the caribou.
"You're going to have a smaller car, but the damned car will go about three times as far on the same amount of fuel as your old car did, so you won't have to pay as much for it. You'll get there just as soon. You'll be able to get to the country. You'll be able to get to the seas. So that's not all bad.
"My life is coming toward the end of its productive period, but as you travel around the world -- and I've been to just about every country at this point -- this country could be going into a holding pattern for the next 30 years and it would be a much better place to live than any other place I've ever seen. Any place. So I can't get all that pessimistic."
He spoke about the pressures to get advanced technical degrees and of the struggle to create new technocrats for this increasingly technological age we're entering. Then he said something surprising.
"This is just a personal feeling of mine, but I'm not sure that's the purpose of education in the first place. I've always felt that any time I can I would prefer to find some guy who's had a liberal arts education rather than the guy who's started out technically and gone through with it. To me, the liberal arts stuff doesn't teach you how to make a living. But it will teach you how to enjoy your life more completely no matter how you happen to end up financially. It also tends to make broader people. They have broader interests generally.
"We've been going the other way lately. If you have a liberal arts education today, who the hell wants you?"
If a big oil tycoon, sitting high in his corporate suite overlooking the smoke and haze of America's most dynamic economic area, says farewell to the '70s by preaching a return to the verities of the liberal arts and humanities, can the 80's be all that grim?