U.S. Participation in the International Energy Agency

GAO discussed U.S. participation in the International Energy Agency (IEA), which is the principal multilateral energy forum for major oil consuming industrialized nations. IEA devised the Emergency Sharing System to reduce participating nations' vulnerability to oil supply interruptions. U.S. officials believe that IEA action could dampen the rise of oil prices in an emergency, that the U.S. gains collective security through participation, and that the United States could receive oil under the sharing system in an emergency. U.S. officials have held that the sharing system should be activated only during a sudden and severe oil crisis when members would readily accept obligations under the International Energy Program. When the sharing system was tested in 1983, it was shown that the United States relied on a sharp increase in oil prices to restrain demand, a fair sharing program was needed among domestic competitors, and that major U.S. companies needed to make a commitment to the program to ensure its acceptance. Following the test, the executive branch restudied U.S. international emergency preparedness and, although reassessment is still occurring, U.S. officials have advised IEA that the United States intends to draw down the Strategic Petroleum Reserve in large amounts early in a major supply interruption. GAO noted that U.S. oil company participation is contingent upon the antitrust defense for such activities.