Guzzling Oil

Last month, for the first time in a decade, the United States imported more crude oil and petroleum products than its domestic wells produced. Foreign sources supplied 45% of oil consumed in January--another ominous milestone on the country’s path to relying on overseas suppliers for the bulk of its oil supplies. The peak of dependency came 12 years ago this month, when 10 million barrels of imported oil--accounting for nearly 49% of petroleum consumption--entered the country. By 1992, oil experts forecast, imports will reach 50% of demand.

The January import figures, up 20.6% from a year earlier, no doubt reflect a seasonal surgedue to cold-weather demand. The fact remains that U.S. oil production continues inexorably to decline. Domestic output last month averaged only 7.9 million barrels a day, down 3.4% from a year earlier. Three things are happening: High-cost, low-yield oil wells are increasingly being shut down, since it no longer pays to keep them going; major fields, like Alaska’s North Slope, are slowly starting to play out, and investment in new oil exploration has plummeted.

Less exploration is taking place because the price of oil makes it unrewarding. The consensus among oil geologists is that all of the big oil fields in the United States have probably been found; the only areas where major finds might still be made are thought to in Alaska and on the outer continental shelf--sites where it is not only costly to look for oil but also environmentally risky to produce it. The drop in oil prices--they are now only about half what they were in the early 1980s--has also encouraged a rise in demand as the economic incentive to use energy more prudently and efficiently has largely disappeared. Twice in the last 15 years Americans have discovered how painful depending on foreign oil suppliers can be. The interruptions in supplies and the huge jumps in prices that occurred first as a result of the Arab oil boycott in 1973-74 and then, five years later, after the revolution in Iran brought on inflation and recession. As dependence on imports increases, the threat of future disruptions brought on by supply interruptions increases.

The U.S. government, meaning Congress and successive Presidents alike, has done virtually nothing in the last 10 years to address this problem. The country has no national energy policy, no serious program to develop alternative energy sources, precious few incentives left to encourage energy conservation. The Reagan Administration believed that all energy issues could happily be left to the marketplace. But the marketplace, while delivering the welcome bounty of cheap oil, also yielded the economic and political bane of soaring consumption.

The Bush Administration has to do better. It should start by recognizing the virtues of a hefty and long-overdue increase in the gasoline tax to discourage wasteful consumption while at the same time raising significant revenues. It should go on from there to try to find feasible ways to diminish this country’s rising dependence on oil imports, preferably through a comprehensive approach to conservation and developing cost-effective alternative energy sources. Further drift and inactivity will only see more billions leaving the country every year to buy foreign oil, more dangerous reliance on foreign suppliers, more susceptibility to international petroleum blackmail. The nation has been down that path before.It can’t afford to take it again.