From the Editor: The Middle East war that changed Louisiana

The Hamas attack on Israel carries with it some distant echoes — echoes of a time, almost exactly 50 years ago, in almost exactly the same place, that changed south Louisiana for decades to come.
The time was Oct. 6, 1973. Syria sent troops into the Golan Heights and Egypt sent its tanks across the Sinai to attack Israel, starting the fourth Israeli-Arab war in 25 years.
Israel was taken by surprise and took it on the chin in the opening days of this war. Arab forces occupied land that Israel had won in the 1967 Six Day War.
Tensions rose even higher as the United States rushed military aid to Israel, and the Soviet Union supplied its clients in the Arab world.
The United States military was placed on an alert level one step short of war.
Israel regrouped and, by the time a United Nations resolution resulted in a cease fire three weeks into the fighting, Israel had retaken all the land lost in the first day of fighting.
But the Organization of Petroleum Exporting Countries, led by Saudi Arabia, retaliated against the West for its support of Israel. OPEC cut oil production and suspended shipments of oil.
Prices skyrocketed. A barrel of oil rose from $2 a barrel to $11 in 1973 dollars. In today’s money, that would be like a jump from $12 to $66, all in a matter of weeks. Americans lined up at filling stations to buy gasoline at the unheard of price of 50 cents a gallon.
The price rose even higher six years later, when supporters of Ayatollah Khomeini came to power in Iran, cutting oil shipments even more. The price of oil rose to $30 a barrel, the equivalent of $128 per barrel in 2023 dollars.
The sudden energy price spike caused ripples throughout the American economy and fueled double-digit inflation.
Louisiana people took those hits along with the rest of the country. But there was something else, too.
Suddenly, Louisiana was rolling in cash.
Under the administration of Gov. Edwin Edwards, who was still in his first term in 1973, the state government changed the way it taxed energy production. Instead of charging oil producers a flat severance tax of 25 cents per barrel, the state began levying the tax based on 12.5% of the oil’s value.
Suddenly, Louisiana’s streets were paved with gold, potholes and all.
By 1981, energy production had soared to 40% of Louisiana’s gross domestic product, according to a history article on the Atlanta Federal Reserve Bank’s website. Louisiana employment in four key energy sectors rose from fewer than 70,000 in 1970 to more than 120,000 in 1980.
A New York Times story from the early 1980s talked about the impact on Lafayette, more of an oil town then than it is now. The story regaled readers with tales of Gulfstream jet trips to Houston for lunch, and high school girls wearing designer jewelry to class.
Were the stories true? Either way, the tales captured the free-spending spirit of the time.
The riches didn’t last, of course. By the mid-1980s, the Saudis were pulling puppet strings again, this time engineering production increases that drastically lowered oil prices.
What was in it for the Saudis? An attempt to protect oil profits by derailing U.S. energy conservation? A bid to capture market share in the United States? A conspiracy with Ronald Reagan to reduce the value of the Soviet Union’s chief economic asset?
Pick your theory. Whatever the reason, energy employment plummeted along with state government revenue. Instead of gold-lined streets, we got budget-scrubbing, and bumper stickers that asked the last person leaving Louisiana to turn out the lights.
Louisiana, including and maybe especially St. Mary Parish, was on the oil price roller coaster that we’ve been riding, to greater or lesser degrees, ever since. St. Mary’s population, which grew from 35,000 to 64,000 between 1950 and 1980, fell by nearly 10% in the 1980s.
It’s worth remembering that news from faraway countries, which we tend to surf or scroll past, can have a huge impact at home.
Bill Decker is managing editor of the Morgan City Review