40th Anniversary: The 1973 Oil Embargo and its Aftermath, Iowa City, Iowa, November 20, 2013

- [Christopher Squier] I want to acknowledge our university and community supporters, the University of Iowa's Honors Program, and the University of Iowa's International Programs both contribute time, talent and logistics to our organization. I also thank today's program sponsors, Dave, Diane and Mike Tiffany and Integrated DNA Technologies. Our work is made possible by the generous financial support of these sponsors. Our format today, as always, will be an introduction of the speaker, our speaker's remarks, and a question and answer period. You can write questions on the cards on your table, they'll be collected in at the conclusion of Tyler Priest's remarks. So I'm pleased to introduce my friend and colleague, Tyler Priest, professor of both history and geography at the University of Iowa. He has a Ph.D. from the University of Wisconsin at Madison. His expertise is in the history of oil and energy. He's the author of The Offshore Imperative: Shell Oil's Search for Petroleum in Post-War America and his new book is Deepwater Horizons: Managing Offshore Oil and Gas in the United States. In 2010, 2011 Ty served as Senior Policy Analyst for the National Commission that was studying the Deepwater Horizon oil spill and offshore drilling. So please welcome Tyler Priest. - [Tyler Priest] Thank you, Chris, it's a pleasure to be here. I thank everyone in the audience for resisting the lovely weather outside to come inside today. My, the emphasis of my work is on offshore oil, but today I want to talk about the 1973 Oil Crisis. Last month, October, marked the 40th anniversary of the Arab Oil Embargo of 1973 and what has come to be known as the first oil shock, the world's first oil shock. And some of you may have missed it, the anniversary passed with very little comment or commemoration. There were no stories, for example, in the Iowa Press Citizen or the Des Moines Register or even the New York Times. And nor did any of the modern representatives of the actors in the drama at the time have anything to say about it. OPEC, the Organization of Petroleum Exporting Countries, made no comment, although the Oil Shock of 73 was perhaps the defining moment of that organization. I guess it's understandable that they did not want to remind oil consuming nations of the pain that was inflicted in 1973. There was also nothing from the Richard M. Nixon Presidential Library, which in recent months has been preoccupied with the release, the latest release of the White House Watergate, or the White House tapes. And this eerily mirrored how the unfolding Watergate scandal in October, 1973 distracted the Nixon White House from the oil crisis of the same month. The sparse commentary that we did receive really didn't offer a very serious historical reflection, in many cases errors of fact. The, most stories emphasized how little has changed in 40 years and there were diverging opinions about whether we can frack our way to independence, or, or whether deliverance will come through some kind of radical transition to alternative energy or renewable energy. But the Oil Crisis of 73 which I consider to be a pivotal moment in modern world history deserves some reconsideration. So, what I'll try to do today is clear up some common historical misconceptions about the shock, summarize some of the key developments and then lay out what I think is the main legacy of the Oil Shock of 73. And it may come as a surprise to some of you at least, that there was no such thing as an OPEC oil embargo. OPEC, as an organization, never embargoed oil to the United States or any other nation. And let me just, I'll give you a brief chronology. On October sixth, 1973, the Jewish holiday of Yom Kippur, Egypt and Syria launched a surprise attack on Israel, to take back territory that was lost in the 1967 war. Nixon then authorized delivery of weapons to Israel, just a couple days before his Vice President, Spiro Agnew, resigned after a plea bargain on bribery charges and just a few days before Nixon released the first set of White House tapes. And so you can see there was some distraction in the White House at the time. In response to the delivery of weapons to Israel the Organization of Arab Oil Exporting Countries, which I see is an item on one of your trivia questions, responded by increasing posted oil prices by 70 percent and cutting production by five percent. And then on October 19th, Nixon asked Congress for 2.2 billion dollars in aid to Israel, which prompted the Arab countries of OPEC, or the Organization of Arab Petroleum Exporters, to impose an embargo on shipments of oil to the United States, which was later extended to the Netherlands, Portugal, South Africa and Rhodesia. Important non-Arab members of OPEC, Iran and Venezuela, did not take part in the embargo. And neither did Iraq, which was a major Arab oil producing nation. So it's important to understand that this was an Arab oil embargo, not an OPEC oil embargo, as the majority of news stories that I saw last month referred to it. Another common misconception embedded in American memory of this period is the association between the embargo and the gas lines. Now I can see this is a young crowd. But I bet that some of you maybe remember the gas lines of 73. But it was neither OPEC, nor OAPEC that caused the embargo, I'm sorry, that caused the gas lines, they were caused really by misguided policies of price controls and supply allocations that the Nixon administration had put in place between 1971 and 1973. And I can explain how this worked later, but in the interests of time I'll just try to move on, but it's important to realize that there were gas lines in the Spring of 73, six months before the embargo. And despite fears that the embargo would reduce American oil supply by three to four million barrels a day, it only turned out to reduce it by about 900,000 barrels a day. And the oil industry was willing and able to spread the production cuts associated with the embargo in a way that minimized the impact. The embar-- I'm not saying the embargo was not important, it was very significant, but more as a political issue than as an economic event, OK? It reinforced the importance of oil production in the Middle East and especially the Arab members of, the Arab countries of the Middle East to international politics. It, the use of the oil weapon as it was called demonstrated an unprecedented unity among the Arab nations of the region. And this unity would be difficult to maintain over time, but at this critical moment it also fused the issue of oil and Israel, which U.S. foreign policy makers had tried to keep separate since the begin, since the inception of the state of Israel and they continue to try to keep it separate. The disruption also put pressure on the Western Alliance, causing some U.S. allies such as Japan to rethink their policies toward Israel and the Arab world. And in the end, the use of the embargo, the use of the oil weapon failed. The stated purpose, which was to end the Israeli occupation, seized as a result of the 1967 war, did not happen. So the real economic impact of the Oil Crisis of 73 was related to, but distinct from the embargo and this had to do with the renegotiation of oil agreements beginning in 1971 between the major oil companies, Seven Sisters, have you heard of the term Seven Sisters, which consisted of Exxon, Mobil, Chevron, Gulf, Texaco, Royal Dutch Shell and BP, or British Petroleum at the time. Which, and this renegotiation of oil agreements increased the participation, or introduced the participation of host governments in the companies exploiting their oil. And this really began, really started in the aftermath of the 1967 war, picked up speed in 1971 after Nixon severed the link between gold and dollars, which devalued the dollar and the devaluation of the dollar reduced the income of the host governments. And so this accelerated the renegotiation of concessions between OPEC countries and the major oil companies. And in 1972, as they saw their oil revenues plunging and watched the more militant members of OPEC, Libya, Algeria and Iraq, assert greater control over their oil industries, the group of the largest OPEC countries, Iran, Saudi Arabia, Venezuela, obtained a 25 percent interest in those consortiums that were operated by the Seven Sisters in their countries. And unable to obtain assistance from a U.S. government that was distracted by Watergate, also distracted by the winding down of the Vietnam War, the majors accepted this participation by the host governments in their enterprises in those countries. And not only was the Nixon administration distracted but some of the highest level officials alarmingly knew very little about oil. Henry Kissinger in particular who was the Secretary of State at this time once barked at one of his aides, when people tell me we're consuming six million barrels a day of oil, they might as well tell me that we're consuming 50,000 Coke bottles of oil a day, I don't know what that means. And so, in accepting participation the oil majors conceded for the first time to the host governments the sovereign right over their oil. And the more control that OPEC producers were able to assert over this oil, the more control they were able to assert over production and prices. And by 1974 all those nations began moving from participation to 100 percent nationalization, which is, as one scholar referred to it, the largest non-violent transfer of wealth in human history. And this is the real significance of the Oil Crisis of 73, the natural resource owners were now in the driver's seat. And they were exercising their sovereign power to revise the rules governing oil in their nation, OK? In none of the news stories that I saw last month was the word nationalization ever mentioned. Now, you know, I don't know why, it's, maybe it's a point of, for a point of discussion, but it left the impression that nationalization never happened, or that it happened long before the oil crisis, but it was not discussed at all, only the embargo was discussed. And you know, the embargo is kind of a symptom of this larger development. And ignoring the subject of nationalization obscures the fact that prior to 1973 it was the major oil companies who were in the driver's seat, who were the main actors. After 1945 they built this informal system based on intercompany cooperation and highly profitable interlocked concessions in the Middle East and other major oil producing nations. And their overseas operations really became islands of wealth extraction in a sea of immiseration, which generated growing resentment and opposition that eventually merged, in the late 1960s, with Pan-Arab nationalism. And so in constructing and maintaining this system they also, the Seven Sisters also were assisted by their parent governments; in the case of the United States the U.S. government provided favorable tax treatment and exemption from anti-trust investigations. Domestic regulation protected U.S. oil production from import competition from 1959 to 1973. And there were incentives provided to develop excess capacity that could be called on in case of international fuel shortages. This excess or surge capacity it was called, surge capacity was critical during the Suez Canal Crisis of 1956 and the Six Day War of 1967, and during these events additional U.S. oil was able to offset losses of oil from the Persian Gulf region. And so this surge, the domestic surge capacity also was kind of a bargaining chip that majors had, in their dealings with OPEC nations through the 1960s. But by 1973, U.S. surge capacity had evaporated. U.S. oil production peaked out at about 9.7 million barrels a day in 1970. And there was a Shell Oil geophysicist by the name of King Hubbert who kind of predicted this in 1956 and it turned him into a sort of oil prophet, but the leverage of the Seven Sisters and their host governments was now gone, they were now negotiating from weakness. And Cliff Garvin who was the Exxon CEO at this time recalled his predecessor, Howard Page, who had negotiated with the OPEC nations in the 1960s telling him, in my day when I was negotiating I at least had the appearance of having a gun. You fellows don't have anything. And so the post war petroleum order came to a sudden end that year in 1973 with reverberations that went way beyond the oil industry, and well into the future. The year 1973 was an epic turning point in the political economy of the late 20th century. Coming on top of the U.S. retreat from Vietnam and on top of the collapse of the Bretton Woods system U.S. oil, I mean U.S. world leadership was suddenly in crisis. And thus you have Nixon's overtures to China to try to triangulate between, with the Soviet Union and so forth. The oil price increases created a recession at the same time that it fueled inflation, and again many of you might remember the term stagflation of the time, thus abruptly ending 25 years of sustained economic growth after the end of World War Two. The long boom of post war capitalism gave way to the long stagnation that has since been punctuated by bubbles and bursts. Keynesianism was replaced by free market orthodoxy, the year 73 is a critical watershed in late 20th century history. The Crisis of 1973 also had unforeseen effects that bolstered U.S. economic power in the world. The recycling of petro dollars to the tune of 500 billion between 1973 and 1981 lubricated the global circulation of capital and guaranteed the continued preeminence of the dollar, of the U.S. dollar as the world's reserve currency. Oil states also spent lavishly their petro dollars on imports of weapons from the United States, helping to prop up the military industrial complex as the Vietnam War drew down. But the cost of this was the, was further destabilization of the Persian Gulf region. And one could even argue that the oil crisis marked the beginning of the end of the Soviet Union. Russia had become very dependent on earnings from oil exports in the 1970s and when the oil price collapsed in 1985, 1986 it knocked the legs out from under the Soviet economy. So these developments were not the result of some kind of master plan, the major oil companies and the consuming nations were really caught by surprise at the embargo and at the accelerated renegotiation of the oil agreements, but they immediately began developing a new structure to defend their interests in the wake of 73. And there are really four pillars as I see it, to this new oil system that came about in the 70s and still exists today. One is that there were policy reforms in the developed nations that moderated demand and built up strategic stockpiles, we have a strategic petroleum reserve of about 700 million barrels down in Louisiana, stored away in salt caverns in south Louisiana. There was the reconstruction of oil markets that eventually removed the control of oil pricing away from OPEC. There were new treaties and principles of international law that protected foreign investors from subsequent nationalizations. And there was technological innovation that developed new oil supply outside of OPEC nations. Now I don't have time to talk about all four of these pillars, I will spend, you know, briefly the rest of my remarks on the fourth, which was the technological innovation that produced new oil supply outside of OPEC. And this is one of the, perhaps the most significant legacy of the 73 Oil Shock in my view, the price incentive and the strategic imperative it provided for the enlargement and diversification of oil supplies. There were efforts by oil firms and consuming nations to promote this diversification well before the oil shock, after the 53, I'm, after the 56 Suez Canal Crisis and after the 67 War, but two of the boldest efforts to diversify were given a critical boost by the Oil Shock in 73. And this was the Trans-Alaska Pipeline and the development of oil in the central North Sea. These were both under way in 73, but neither of them may have happened or at least not happened when they did, without the incentive caused by the shock. The Trans-Alaska Pipeline and the 25 percent of U.S. domestic oil or about two million barrels a day that it was providing by 1980 may have been delayed or conceivably stopped. In the Summer of 73 the environmentalists had the upper hand and it looked like it was not going to happen. But in November, after the series of events that I described, Congress passed the Trans-Alaska Pipeline Authorization Act which removed many of those environmental and legal barriers. And the price increases over the course of the 70s made this 7.7 billion dollar project economical. And so there was an Exxon engineer who worked on the project who once later said, the only reason we have an oil pipeline today is because there was an Arab oil embargo. In 1969, 1970, Conico and BP had discovered giant oil fields in the central North Sea, the Ekofisk field by Conico in the Norwegian sector and the Forties field by BP in the UK sector. But these were major fields but they were in about three or 400 feet of water and the central North Sea is not a very easy place to work. And the costs were, the cost projections were incredibly high, too high to do with three dollar a barrel oil, which is what the price was in 1973, but when the price of oil went to 12 dollars a barrel there were no other, there was no further discussion of cost. And these fields were rapidly developed and were producing 3.5 million barrels a day by 1985. And so North Sea and north slope Alaskan oil, which were the two most costly industrial projects during the entire, in the world during the entire decade of the 1970s, helped restore supply flexibility, eased pressures on global oil prices and helped calm runaway inflation by the early 1980s. And in doing so and this is just an aside, they also helped underwrite the political fortunes of conservative heads of state Margaret Thatcher and Ronald Reagan. We could maybe argue the extent to which Alaskan oil helped the popularity of Ronald Reagan, but it's inarguable that it helped Margaret Thatcher. So incredibly important in restoring the flexibility of global supplies and these projects were made possible, ironically, by the Oil Crisis of 73. And 73 also stimulated oil activity in other offshore basins in the Western Hemisphere. Mexico, post 73, embarked on a very ambitious oil exploration and production program, 15 billion dollar exploration program. They had become increasingly dependent on imported oil which suddenly now was four times as expensive as it was in 1973. They made one of the world's largest oil discoveries in the second half of the 20th century in the Bay of Campeche, the Cantarell Oil Complex and by the end of 1980 it was producing 1.3 million barrels a day from zero several years earlier. On the, across the Gulf Coast to the north high oil prices propelled companies and technology into the risky and costly deep water, out to 1,000 feet. So it was really the Oil Crisis of 73 that moved companies into deep water, deep water is not something that just came about with BP and the Deepwater Horizon. What many people often don't realize also is that Brazil began exploring deep water prospects off its southeast coast as a result of the 73 Oil Shock. And so we, if you pay attention to oil news you may hear about the incredible finds that Brazil, the Brazilian state oil company Petrobras has made in the subsalt geology. But this whole project of Petrobras, you know, can be traced directly back to 1973. And Petrobras over time, although it's a state owned oil company, has been very technologically innovative and is one of the leaders in floating and subsea offshore production technology. And so the common theme linking all these developments described, that I've described, was the application or commercialization of expensive technologies to expand oil supply from environmentally challenging locations. And you can see it in other areas, especially drilling. From the 1930s to the 1970s there was practically no change in the way that companies drilled for oil, in terms of just drilling a hole. In the 1970s you saw an efflorescence of drilling innovations because it was affordable to experiment and develop these kinds of technologies, which included automation, directional and horizontal drilling, measurement while drilling where you could take measurements from the geological formations at the same time that you're drilling. The digitalization of the geophysical exploration for oil enabled companies to visualize and even map subsoil resources before they even ever drilled a well. And so to make, kind of to make a long story short, today's expanding supply of oil and gas from offshore and deep water provinces from the Gulf of Mexico to Brazil to West Africa, to the renewed interest in the oil potential of Arctic regions, to the dramatic shale plates that are emerging around the world, they can all trace their legacy back to the industry's technological response to the Oil Shock of 73. And so it's the industry's development of these non-OPEC oil sources, combined with the other pillars of the global oil system, created in the wake of the OPEC revolution, which has made our dependence on oil in security terms at least much less problematic than much of the commentary that I saw last month on the anniversary of the shock. The world is less vulnerable, although not invulnerable to supply disruptions than it was in 1973 and perhaps even more importantly it's less vulnerable to the concentrated control of oil, whether it was by an international oil cartel of the Seven Sisters prior to 73 or by a small group of oil exporting nations in OPEC immediately after 1973. And it was the sudden rebalancing of this control through the transformation and the ownership of oil in 1973, that created the crisis. And the global oil system today is not susceptible to that kind of rebalancing or transformation. Compared to 1973 it's much more integrated with a much wider array of producers and consumers as well as types of hydrocarbons. For now the question is less about disruptions in supply, or whether supply can keep up with demand, although that can always change, but the question to me seems like whether, the question to me is whether we have too much supply to keep from stressing the global climate? And that's a, that's a discussion, that's a whole another discussion altogether, so, thanks for listening, I'm happy to take questions. - [Christopher Squier] Can you speak about U.S. subsidies to oil companies like depletion allowances? When you factor in these subsidies and other things like military protection of shipping, what is the true cost of oil and gas? - [Tyler Priest] I've seen some calculations about that. Depletion allowance, the question was can you speak about U.S. subsidies to the oil companies like the depletion allowances? The depletion allowance was something that was passed by Congress in 1924, which allowed the industry to deduct a percentage of their income for depletion against their taxable income. It was in the vicinity of 27 per, I'm trying to, 27 percent and it was, the oil industry argued it's like depreciation, because their assets are depleting. That was, depletion was removed from, for integrated oil companies after the oil embargo, so it no longer exists for large oil producers. It exists still for small oil producers, for stripper wells which are basically wells that produce less than 15 barrels a day. And something like 20 percent of our oil product, domestic oil production comes from these small wells that have, that are generously subsidized. And so when people talk about subsidies for big oil, the depletion allowance is not a subsidy for big oil, it's a subsidy for small oil, it's a subsidy for small producers, marginal producers, non-economic producers. You know, in my view, I mean and it supports a lot of people, it supports a lot of land owners, it supports, you know, small oil producers. But, you know, if you're, if you wanted to, if you wanted to be completely efficient, economically rational about it, you would pull that away and import the cheaper oil. So, the other question related to this, military protection of shipping, and our sort of military infrastructure in the Persian Gulf, yes, that does, when you, the price of oil that you pay at the gas pump doesn't include, you know, the costs, you know, we pay to defend the Persian Gulf and the shipping lanes in the world. I don't know what the price would be, I've seen estimates of 12 dollars a barrel, I mean 12 dollars a gallon of gasoline, 15 dollars a gallon of gasoline, if that were, if those costs were internalized into the price of oil. Yeah, I hope that answers the question. - [Christopher Squier] Thanks. We have several questions on the Seven Sisters. Did the Seven Sisters sell their interest in the production of oil or was it just given? And if given it is remarkable that the U.S. made so much of Chile nationalizing copper and Cuba taking U.S. assets. - [Tyler Priest] They were comp, it was compensated. And it usually involved drawn out negotiations between the companies and the host governments, some more cordial than others. You know, the negotiations between, well in Venezuela it was Shell, Gulf and Exxon was, you know, they were fairly, pretty fairly compensated, the same with Saudi Arabia and Kuwait. In places like Libya and Iraq it was, you know, much less friendly. And an interesting story about the negotiations with Saudi Arabia, you know, the process of nationalization went from 25, we want 25 percent of your, of the business, of the ownership of the company, to 30, 40, 50. It's funny, when Saudi Arabia got to just over 50 when they got to just over majority ownership in Aramco, which was Exxon, Mobil, Texaco, and Exxon, Chevron, I'm sorry, the Chevron was the original, once they got to just over 50 percent, Zaki Amani, who was the Saudi Arabian Oil Minister said OK, let's slow down. Because they wanted Aramco to fund a lot of development projects, and if they kept the oil companies in there as a 49 percent owner, they would have to pony up the money. And so it got to a point where the oil companies wanted out, they wanted 100 percent nationalization and the Saudis were saying let's slow down, let's take this slowly. And it, I mean the last part of Aramco I don't think was, you know the full nationalization didn't happen until something like 1990 or 1991. You know, the greater part of it happened in the 70s but, yeah, so it was, the, it was nationalization with compensation, yeah. - [Christopher Squier] Well, another related one. These make good term papers actually. You speak of nationalization of oil production. What's your response to the suggestion that previously state, the state was one of colonization on the part of the Seven Sisters and their respective governments. Are we now in a third state of the political economy of oil? - [Tyler Priest] OK. The preceding state was one of colonization on the part of the Seven Sisters and their respective home governments. I could say that was, that's true to a certain extent, although, you know, the king of Saudi Arabia and the governments were partners really with these oil companies, very close partners actually, but this was to the exclusion of the majority of the people who lived in those countries, so it was kind of an invited colonization in some ways. Are we now in a third state, perhaps stage of the political economy of oil? Yes, I think we are, the first stage being, you know, the international oil cartel, the second stage maybe being OPEC, OPEC's control and we are in some kind of third stage where you have the state owned oil companies of OPEC who are no longer just oil producers. They are heavily invested in the economies of the West, financially through investments, but also they've moved pretty dramatically into areas of the oil business that no longer have to do with simply oil production but also with oil refining. The largest oil refinery in the United States, the Motiva refinery in Port Arthur, Texas, which has just been modernized to double its, its refining capacity, from about 330,000 barrels a day to 600,000 barrels a day, is half owned by Saudi Aramco. And the other owner is Royal Dutch Shell. So the largest refinery in the United States is not controlled by an American company. And, you know, the Saudis have a vested interest in continuing to ship oil. They're not going to starve that asset down in Port Arthur. And you also see state owned oil companies becoming more active outside of their own countries in oil exploration. Petrobras is now a significant oil producer in the deep water Gulf of Mexico. It's a much, as I think I said, a much more integrated world, both in production, in consumption, than it was in, I guess we would call, might call the the third state of the political economy of oil. And then of course you also have, speaking of the political economy of oil, the move away from conventional oil to unconventional, what we call unconventional whether it be deep water, heavy oil, tide oil, oil shale, you know new, oil from different kinds of geology than we had used predominantly in the past. And that raises a lot of questions, there's some, a lot of concerns, environmental concerns about hydraulic fracking which is how we obtain tide oil and oil shale and shale gas and so forth. So, yeah, I think we are certainly in a third state, yeah. - [Christopher Squier] Well, that's a good segue to these questions which bring us up to date. Is the Keystone Pipeline economically and environmentally worth pursuing, are the Seven Sisters involved in this? And maybe coupled with that, can you tell us more about the use of the Canadian oil sands, is this going to be oil for U.S. consumption or for export and in your opinion, is it a good thing? - [Tyler Priest] Keystone XL Pipeline and oil sands. Major oil companies are involved in the Canadian oil sands, Conico to Exxon to Shell they're, you know, they are all up there. The Keystone XL Pipeline is designed to bring those oil sands to the refineries on the Gulf Coast. It's heavy oil, it's more expensive to refine and one of the largest concentrations of refining capacity and the technology to convert that heavy oil to saleable oil products is on the Gulf Coast, that's why it's being brought to the Gulf Coast. So the oil will be processed and refined in the United States. Where the oil products will end up, it's a good chance it's in China. You know it's, you know oil's a fungible commodity, it's hard to tell if the molecules that come from Canada will go to China or if they'll be consumed, but the Gulf Coast of the United States is the largest concentration of oil refining in the world, from New Orleans to Lake Charles to Beaumont, Port Arthur to Houston to Corpus Christi, it's a mammoth refining center. And so it refines oil from the United States, it refines oil that we import from abroad, I mean I think something like 50, 40 or 50 percent of all the oil that we've refined comes into the Gulf Coast. And it will refine the oil that comes down from Canada. And we are becoming a larger exporter of the oil products that come out of refining, which is gasoline and fuel oil and so forth. Is it a good thing, the Keystone XL Pipeline? Well, I don't think the pipeline itself for me is the issue, I don't, I think it is the concerns about its environmental impact coming across, you know, the Midwest are overblown. But oil sands are a dirty business, they are, you know, they've destroyed a lot of the boreal forest in Canada. They emit a lot more CO2, they're much more concentrated with carbon. And so if your concern is with climate change and CO2, it's probably not as good an idea as some other oil. But let me tell you this, if we don't build the Keystone XL Pipeline and the oil from the oil sands does not come into the Gulf, it will come from Venezuela, which is just as bad as oil sands. The heavy oil in the Orinoco Basin is just the same, it's the same stuff almost. So, you know, you can kill the Keystone XL Pipeline but the heavy oil is going to come to those refineries from other places. - [Christopher Squier] OK, so our final question is about another recent source, can you anticipate the effect of the recent oil find in Australia? - [Tyler Priest] Most of the major discoveries in Australia recently have been natural gas off the northwest shelf. I'm not sure what the oil find is being referred to, is it a natural gas find or is it an oil find? - [Audience Member] An oil find. - [Tyler Priest] Is it? - [Audience Member] It's in south central Australia. - [Tyler Priest] South, on shore? - [Audience Member] It's in the middle of the country. - [Tyler Priest] The middle of the country, yeah, I'm, I don't know about that, I haven't followed that, yeah. - [Christopher Squier] OK, so the time has come to conclude this session. I'd like to thank Tyler Priest for his talk on the 40th anniversary of the Oil Embargo and its aftermath. I also want to thank our sponsors again, the University of Iowa International Programs, the University of Iowa Honors Program for their generous support and our financial sponsors, Dave, Diane and Mike Tiffany and Integrated DNA Technologies. So now, Tyler, as a token of our appreciation we have a very special gift for you. This is the famous Iowa City Foreign Relations Council mug and we thank you so much for joining us today. - [Tyler Priest] Thank you, yeah. I won't put my sample of oil sands in that mug, I assure you. - [Christopher Squier] OK, finally, if you wish to become an ICFRC member or support our programs with tax deductible contribution, you can visit us at the back of the hall call us at 391-335-0351 or mail donations directly to us at 1120 University Capitol Centre, Iowa City, Iowa 52242 and thank you all for joining us. - [Announcer] You're watching City Channel Four, on TV, online, on demand, on Facebook and now on the go, on your mobile device.