|
|
|
| Current Issue |
|
|
| Resources |
|
|
|
How Good Is U.S. Energy Security?
| Article
# : |
12506 |
|
|
Section : |
CURRENT ISSUES
|
| Issue
Date : |
7 / 1987 |
2,556 Words |
| Author
: |
S. Fred Singer
S. Fred Singer, Visiting Eminent Scholar at George Mason
University and former director of the U.S. Weather Satellite
Program, is a pioneer in unmanned space science. His early
work included study of primary cosmic radiation and the
discovery of the equatorial "elctrojet" current in the Earth's
ionosphere. He also proposed to NASA the manned mission to
Phobos and Deimos now referred to as the Ph-D Project. |
The Department of Energy study on energy security, released in March 1987, focused renewed attention on the danger of rising oil imports.
As a result of last year's oil price collapse, declines in domestic oil production coupled with increases in U.S. demand have boosted imports by one million barrels per day (mbd). The Department of Energy projects continued increases in oil imports: from 5.2 mbd, about one-third of U.S. consumption, in 1986, to 9 mbd, about one-half of projected U.S. consumption, in l995. Pressure is building for some kind of action.
What's wrong with importing oil? In part, the concern is that U.S. dependence on this strategic resource jeopardizes national security. But the underlying fear is that terrorism, sabotage, or the spread of the Iran-Iraq conflict in the Persian Gulf could lead to interruptions in oil supplies. This overlooks an important fact: Oil is a fungible commodity. Thus, any major reduction in supply would cause a leap in price to oil consumers everywhere. This would hold true in the United States even if imports were reduced to zero.
Importing oil does not present a special problem, provided the United States can protect itself from large and unpredictable price swings controlled by outside forces. To understand Washington's concern, however, and to devise appropriate policies, it helps to look at the events leading up to the current situation.
Lessons of the past decade
Three events, closely connected, dominated 1986:
·As the result of Saudi changes in oil production, the price of oil collapsed from nearly $30 a barrel to less than $10 a barrel, then rose to around $18 and stayed there.
·Sheikh Ahmed Zaki Yamani, Saudi Arabia's oil minister for 25 years and the man whose pronouncements had become the symbol of Arab oil power, was fired.
·Saudi Arabia's previously unquestioned supremacy within OPEC was challenged by Iran's radical Islamic government, which countered Riyadh's oil output and pricing decisions with political and military threats.
The reasons for these upheavals go back to 1979, when oil prices began to
...
Read Full Article
Look for this article in Ask.com
|
|
