[WalterBright]

I lived through the gas shortages. I remember the day the gas lines ended. They never returned in the 45 years since, despite all sorts of wars and global crises and exploding oil refineries and Hooties shooting at tankers. All gone literally overnight with the stroke of Reagan's pen.

The gas shortages never existed before Nixon imposed price and allocation controls on gas, either.

(Except during WW2, where gas shortages were caused by gas rationing.)

[AnIrishDuck]

Well first, we have this:

> The Jimmy Carter administration began a phased deregulation of oil prices on April 5, 1979, when the average price of crude oil was US$15.85 per barrel ($100/m3).

So, the process wasn't really an instant wave of a wand, or stroke of a pen. We also have this:

> Starting with the Iranian revolution, the price of crude oil rose to $39.50 per barrel ($248/m3) over the next 12 months (its all-time highest real price until March 3, 2008).[11] Deregulating domestic oil price controls allowed U.S. oil output to rise sharply from the large Prudhoe Bay fields, while oil imports fell sharply.

We also have silliness like this:

> Due to memories of the oil shortage in 1973, motorists soon began panic buying, and long lines appeared at gas stations, as they had six years earlier.[13] The average vehicle of the time consumed between two and three liters (about 0.5–0.8 gallons) of gasoline an hour while idling, and it was estimated that Americans wasted up to 150,000 barrels (24,000 m3) of oil per day idling their engines in the lines at gas stations.

So we have counterfactuals: if there was no Iranian revolution, would the effects of Carter's gradual deregulation have been felt sooner? If there was no 1973 oil shortage, would the reduction in waste have made a difference? What effect did people simply believing that the crisis was over have?

I don't propose answers to these questions; they are, in my opinion, unknowable.

I suggest that economic narratives such as the one you propose do not capture the entire picture. You had downward pressure on prices due to deregulation and expanding supply, and upwards pressure due to geopolitics and waste.

These processes do not resolve instantly, they take time to play out. I suggest caution when attempting to derive cause and effect from single events in complex systems.

[AnIrishDuck]

I'll also note that all of this still mostly reinforces your main thesis.

One major issue with central planning is that it usually lacks the internal feedback mechanisms necessary to properly account for all of these factors.

Price signals usually work faster, and thus more efficiently! The USSR even had an economic reform where they introduced mechanisms that could be described as "shadow prices" within their own system [1]. It was the driving force behind one of the independent discoveries of linear programming.

I'd highly recommend "In Soviet Union, Optimization Problem Solves You" [2] and the novel (historical economic fiction, a nerd's nerd literary category if there ever was one) Red Plenty to learn more.

1. https://en.wikipedia.org/wiki/1965_Soviet_economic_reform 2. https://crookedtimber.org/2012/05/30/in-soviet-union-optimiz...

[WalterBright]

All true. Why didn't gas lines ever appear after 1980? We had crises like 9/11 and the pandemic - but no gas shortages.

Prices did go up and down, but gas was always available.

[opo]

The 79 oil crisis and rationing was caused by the disruption of oil from the Iran, but the US suffered much more from the disruption of the oil from Iran than other countries that also relied on this oil. It would be wrong to ignore the role the government played in making this oil disruption significantly worse.

From "The U.S. Petroleum Crisis of 1979", PHILIP K. VERLEGER, JR. Here are some examples of problems that were identified:

>...On February 28, 1979, DOE published the following notice in the Federal Register: "It is essential that refiners enter the spring driving season with adequate gasoline stocks to meet seasonal demand requirements. We recognize that gasoline stocks are currently at adequate levels for this time of year, which is usually a period of low demand. Recent industry data indicate that total stocks are now in excess of 265 million barrels, which is less than last year's record high levels during the same period but above the average levels of previous years. Our concern is that these stocks not be drawn down precipitously as soon as the impacts of the Iranian shortfall are felt by refiners. Refiners are urged to keep stocks high enough to meet expected demand during the 1979 summer driving season, even if it is necessary to restrict somewhat the amount of surplus gasoline that is made available to purchasers currently" The implementation of these instructions had the effect of restricting the volume of gasoline available to service stations to between 80 and 90 percent of 1978 levels. This reduction was greater than the reduction in total gasoline supplies.

>...In April 1979, DOE ordered the fifteen largest refiners to sell 7.8 million barrels of crude oil to smaller firms that were unable to obtain supplies on the world market at competitive prices. …These transfers probably reduced the volume of gasoline produced in the second quarter because the refineries that purchased the crude oil had only a limited capacity to produce gasoline, while the refineries that sold it could have produced more. ...In addition to reducing the supply of gasoline, the buy/sell program appears to have affected the geographic distribution of crude oil and gasoline. This is because the primary recipients of the crude oil were refineries in the Midwest and the gulf coast areas, while the sellers were companies that were marketing throughout the nation.

>...…In April, DOE turned its attention to the low stock of distillate fuel oil … Two impacts were observed on domestic markets. First, excessive stocks of heating oil were accumulated. Second, companies may have been influenced to increase gasoline stocks in anticipation of the mandator yield controls that DOE threatened to impose.

>...Price controls on gasoline may have also created an incentive to withhold gasoline from the market when the prices of crude oil were rising rapidly. …In summary, the refiners had the capacity and the knowledge to take advantage of this opportunity. Ironically, the instructions from DOE to the companies were to do precisely what was most profitable.

>...In addition to encouraging the buildup of stocks, DOE may have added to the shortages by creating an incentive to reduce the output of crude oil. Although it is difficult to estimate what domestic supplies of crude oil might have been in the absence of any restriction, a DOE announcement in November that control levels of the base period were to be reviewed may have constrained production in the first half of 1979.