Linda Thomas-Greenfield told NPR's Michel Martin that Russia should be held to a higher standard as a permanent member of the Security Council, and vowed to hold the country accountable.

Transcript

SYLVIE DOUGLIS, BYLINE: NPR.

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PADDY HIRSCH, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Paddy Hirsch.

ADRIAN MA, HOST:

And I'm Adrian Ma. Lithuania announced over the weekend it will no longer buy natural gas from Russia. Up until now, it had been buying about a quarter of its gas from a company called Gazprom. But now it's the first European Union country to say it's quitting Russian gas.

HIRSCH: Now all eyes are on Germany, which is a long way from energy independence from Russia. Half of Germany's 40 million households use natural gas for heating, and 40% of that natural gas comes from Russia, which means that if the flow of natural gas from Russia stops as a result of the war in Ukraine, then Germany is in trouble.

MA: All of this has the German government thinking of a contingency plan, specifically rationing.

HIRSCH: Rationing - when a government or an organization allows people to have only a fixed amount of a commodity. On today's show, we look at how rationing happens, why it happens and what the unforeseen consequences can be.

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MA: Most people in the U.S., when they think of rationing, think of the Second World War, and that is when the supply of almost all commodities was restricted. But Americans have had to deal with rationing a few times since then.

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UNIDENTIFIED PERSON #1: This is unreal. Isn't this disgusting? Why doesn't anybody contact the president? Why is he letting this happen to us?

HIRSCH: That is the voice of a woman speaking to New York TV station WPIX in 1979. She was sitting in a long line of cars, waiting to fill up her vehicle. It was a scene that played out in cities all over the U.S. that summer as people flocked to gas stations, often lining up before dawn and queuing for hours to fill up their tanks.

MA: The cause of this run on gasoline - an oil shortage following the revolution in Iran earlier that year. The global oil supply didn't drop that much - only about 4%. But the markets reacted negatively. They hated it, and oil prices soared. And at one point, they more than doubled to nearly $40 a barrel.

HIRSCH: President Jimmy Carter's administration had expected this. Carter himself had been warning about the possibility of the American people making sacrifices almost as soon as he took office, when he drew up a list of proposals to deal with the energy crisis.

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JIMMY CARTER: Many of these proposals will be unpopular. Some will cause you to put up with inconveniences and to make sacrifices. The most important thing about these proposals is that the alternative may be a national catastrophe.

HIRSCH: By the spring of 1979, there was a move on Capitol Hill to impose rationing of gasoline on a national scale. Carter himself wanted to do it, but he couldn't get enough support amongst representatives or economists, for that matter.

MA: Yeah. Most economists loathe the idea of government-imposed rationing because it distorts the market. And, you know, what happens is that people can't get as much of the rationed good as they want, so they spend the money they would have spent on that good on other stuff - stuff that otherwise wouldn't have sold. And that is market distortion.

HIRSCH: Yeah. And economists also hate rationing because they believe it encourages hoarding. I mean, remember those empty shelves in the toilet paper section of the supermarket during COVID?

MA: I mean, who amongst us, Paddy, has not been desperately searching for toilet paper? But I mean, I kind of thought that the hoarding was already happening before stores started to, you know, ration what customers could buy.

HIRSCH: Yeah, absolutely. It was. I mean, the hoarding came first. And then because of the hoarding, they're like, oh, my gosh, we need to ration. So the rationing came later, and then everybody freaks out because of the rationing. So it's kind of like a chicken and the egg situation.

MA: Vicious cycle.

HIRSCH: Yes, indeed. Anyway, back to 1979, when the governors of several states decided to impose rationing of gasoline.

AWI FEDERGRUEN: Well, rationing is not easy to execute. It's easy to talk about, but it's not easy to execute. And it's certainly painful.

HIRSCH: This is Awi Federgruen. He's a management professor at the Columbia Business School. He spent a lot of time studying supply chains and logistics over the years. He said the way the government did rationing in the Second World War was to issue ration books, which told you how much of a certain good you could purchase in a given period.

MA: But a ration book system takes a huge amount of time and resources to implement. And so in 1979, when governors of the states decided they needed to ration gasoline, they decided on a different system. Awi Federgruen says they called it odd-even rationing.

FEDERGRUEN: Cars could only fill up their tanks on specific days, which were prescribed by the number of their license plate. Cars that have a license plate that have an even number could go on, let's say, Mondays and Wednesdays and Fridays. And those with an odd number could go on the remaining days.

HIRSCH: The idea was pretty good in principle. But Awi said all it did was make matters worse.

FEDERGRUEN: Many people reacted by constantly filling up their tanks and actually creating more congestion than it would normally have been and more demand for gasoline as there would normally have been.

HIRSCH: He calls it the boomerang effect. As soon as people hear about rationing, whether it be of eggs or toilet paper or gasoline, they freak out.

FEDERGRUEN: Gas lines get longer and longer. Shortages become bigger and bigger. People become more and more afraid and panicky, as a consequence of which they say, we've got to get it now, or we will not have it.

MA: Another unforeseen consequence of what was going on was the long lines actually made Americans consume more gas. Just get this - the average American car back then burned a huge amount of gasoline while it was just idling - something to, like, half to three-quarters of a gallon per hour. And so researchers estimated that Americans wasted as much as 150,000 barrels of oil every day just waiting in line with their engines running to fill up with even more gas.

HIRSCH: Now, the worst thing about the rationing in 1979 was that it wasn't administered - as in at all. The governors just issued mandates. And as we all know from our COVID experience, mandates are hard to enforce. They expected consumers to simply follow the rules. They also depended on the retailers policing those rules, and not all retailers were comfortable with that, like this gas station owner in Queens, N.Y., who was interviewed for the MacNeil/Lehrer Report.

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UNIDENTIFIED PERSON #2: You tell that goddamned governor he's got to police this goddamned gasoline situation. I will not take the blame for this thing. I will not take the crap and the harassment from these customers. Now, let him police it or stop selling gas.

MA: Oof (ph). That is one angry business owner.

HIRSCH: He was pretty hot, that guy.

MA: Yeah. And so fast-forward to today - the German government still has some ways to go before it actually has to impose rationing of natural gas. But if it does decide to do that, it has an advantage in that it controls the distribution networks that get gas to homes and businesses, right? So that way, people can't just go out and start hoarding natural gas like they would with toilet paper, right? You can't just buy it at the store and just pile it up in your garage.

HIRSCH: God, could you imagine?

MA: I mean, just get the fire department on speed dial.

HIRSCH: (Laughter) Anyways, if there is a natural gas shock in Germany, the government holds pretty much all the cards. And that means, Awi says, that it needs to be extra careful about the way that it handles the ration program. It needs to message the need for rationing carefully to get the German people on board, to get them ready and willing to live with less. And it needs to make sure that it does everything it can to make a rationing program as short-lived as possible.

FEDERGRUEN: Efforts should be made to - very rapid efforts should be made to get alternative supplies for gas rather than to ration. It's already coming, to a certain extent, from the United States, and there are other countries that might be suppliers. There is talk about Israel stepping in and Cyprus, which is not far from there.

MA: The German government appears to have a plan. It's already signaled that, if worst comes to worse, industry will be the first to get rationed, while households and medical facilities will be the last to be rationed. And that makes sense because the government can protect industry with loans and other kinds of support, like it did during the pandemic.

HIRSCH: And the timing is a bit as fortuitous as it could get for Germany, under the circumstances. If this was October and we were headed into the cold months, the situation would be looking a lot more dire. But Germany has a little time. The country's economy minister recently estimated that it'll take until 2024 to wean itself off Russian gas completely. But there's a lot Germans can do in the short term to get themselves close to that - switch to other suppliers, reduce consumption and build up reserves. Winter is still a ways off, but it's coming.

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MA: This episode was produced by Nicky Ouellet with help from Isaac Rodrigues. It was fact-checked by Corey Bridges. Our senior producer is Viet Le. Kate Concannon edits the show. And THE INDICATOR is a production of NPR. Transcript provided by NPR, Copyright NPR.

Tags: linda thomas-greenfield  U.N. Human Rights Council  Russia