Many politicans feel we can reduce our dependence on foreign oil by increasing domestic production, and expanding offshore drilling. This won't help much. In the mid-1980's, the US used about fifteen million barrels of oil each day, and produced about ten -- importing about five million barrels daily. Today, we're using about nineteen million, producing less than nine, and importing ten or more.
To get back to importing what we did in the mid 1980's, we'd have to raise production five million barrels a day. Alaska's Prudhoe Bay oil field, the largest ever found in North America, produced about a million barrels a day at its peak. We're unlikely to find another oil field this large. To increase production enough, we'd have to find five of these fields -- not bloody likely! And it takes ten to fifteen years, after a field is discovered, before it reaches peak production. So we wouldn't get any quick relief. And ten or fifteen years from now, if our oil consumption continues to rise, we'd need another three or four Prudhoe Bays just to meet the increased oil consumption. Since oil fields are exhausted within about fifteen years, we'd soon need another eight or nine Prudhoe Bays to replace those . . .
So drilling offshore, or in Alaska, or in National Parks, is unlikely to help much.
Instead, let's do something that's already been tried -- and proven to work. US oil consumption in 1979 was about the same as today -- despite fewer people and a very weak economy. President Carter decontrolled oil prices, and the US economy started to conserve energy as prices rose. President Reagan continued this policy. By the mid 1980's, Mr. Reagan's massive tax cut brought the economy roaring back to life, with about a seven percent growth rate for the whole year of 1984 -- far better than we've seen since. DESPITE DRAMATIC ECONOMIC GROWTH, oil and energy consumption fell during the early 1980's. Because oil prices were high (thirty to forty dollars per barrel -- about fifty dollars In today's dollars), domestic production went up, but consumption went down. (Production went up because it became profitable to pump oil from small fields -- during the early 1980's the US had over six hundred thousand oil wells, pumping an average of only sixteen barrels a day.)
By 1986, OPEC had had enough. They started pumping more oil and prices plummeted. The US government could have intervened, but didn't -- it allowed oil prices to fall, and the US domestic oil industry was ruined (making OPEC very happy, I'm sure). Oil-producing states (Texas, Oklahoma, Louisiana -- and Colorado) saw real estate prices, construction, and retail sales crash. This helped cause the Saving and Loan losses, the taxpayers took a trillion-dollar hit, and the whole country slid into a recession. The US also entered a war to protect our oil supplies (this had been predicted in 1986).
In the early 1980's, high (but stable) oil prices improved oil and energy conservation and didn't hurt -- they actually helped -- the economy. Later in the decade, low prices made us more dependent on OPEC, susceptible to economic shocks (like in 1973, 1979, and now), and sent the country into a recession.
Americans paid more for gasoline, in real terms, in 1981 (over two dollars a gallon in today's dollars) than they're paying today. Once conservation took hold, prices fell. The economy wasn't hurt. Let's use a tax on imported oil to slowly raise domestic oil prices back to where they were in 1985. Yes, we'll pay more for gas -- but less than we're paying now. And we won't be slaves to OPEC, and we won't have to go to war in the Persian Gulf every few years.
Are we willing to tolerate a trillion-dollar S&L loss, wars over oil, and possibly damaging our National Parks, wilderness areas, and ocean areas -- all for low gas prices? I'm not. Ronald Reagan presided over a strong economy (even with high oil prices), and was re-elected, while George Bush presided over a weak economy (caused primarily by low oil prices), and lost.
Most of the information in this letter is at the following Dept of Energy website.
Environment Directory
Science and Technology Directory
Music Directory
Civil Liberties Directory
Software Directory
Space Directory