We Oil Addicts Are at It Again
Sadly, the United States now depends more on imported oil than at any time since 1977, with a rising share of it coming from the volatile Middle East. Fully 46% of the oil Americans consumed last year came from abroad, second only to the 47.7% level reached shortly before the Iranian revolution. That percentage will certainly increase as U.S. oil production continues to fall. Since 1987 domestic oil output has fallen by 1 million barrels a day; last year alone saw a 500,000-barrel decline. At this rate we’ll be right back where we were: in a cycle of an ever more hopeless dependency on foreign sources for our energy needs.
For a change, if only temporarily, rising demand isn’t the problem. U.S. oil consumption last year was pretty flat, reports the American Petroleum Institute. The real supply problem is that domestic oil fields are running dry, while oil’s relatively low price of recent years has discouraged the search for new sources. Proved U.S. oil reserves--oil that can be profitably taken out of the ground using today’s technology--are now below 26 billion barrels. Contrast that with the 767 billion barrels held by the 13 members of OPEC.
Oil at today’s $22 a barrel or so is a bargain compared to the $35 and more of the early 1980s, but even bargains bought in excess can be an economic drain. Last year’s imported oil bill, the Commerce Department reports, came to about $49 billion, accounting for about 44% of the trade deficit. This year it could be higher. Unrest in Azerbaijan, for example, is already disrupting Soviet oil exports, affecting world supplies and threatening to push up prices.
Is there more domestic oil to be found? The most likely sources have long since been explored. What largely remains, or so say the oil industry and the Bush Administration, are fragile and expensive-to-develop areas off the coasts of California and Florida and Alaska’s far-north Arctic National Wildlife Refuge. For now, though, Congress has barred drilling in these areas because of profound environmental concerns. At best, the prospect of significant new domestic oil finds is a distant one. What then? The government’s Energy Information Administration projects that within 20 years imports will account for between 54% and 67% of U.S. consumption. To avoid costly over-reliance on foreign oil, demand simply must be restrained even more.
That means, as everyone has known since the Arab oil embargo of 1973, that oil has to be used more efficiently and more sparingly. For all the progress made in the last 15 years, the United States still trails Japan and Western Europe in fuel efficiency, meaning that it still uses more energy than other developed countries to produce each new unit of economic growth. There’s also room for improved conservation. For example, the technology exists to boost auto mileage; its use ought to be required. Each gallon of gasoline not burned eases air pollution, lessens the trade deficit and keeps money in drivers’ pockets.
There are a lot of ways to encourage greater energy efficiency and conservation, among them taxes and investment incentives. Why wait any longer to do so? The grim figures don’t lie: The United States is already in the danger zone of oil imports, posing economic and political perils that can’t be wished away.
