U.S. Government Authority To Institute Oil Demand Restraints

B-206525: Published: Apr 6, 1982. Publicly Released: Jun 4, 1985.

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An inquiry was made as to whether the International Energy Program (IEP) requires the U.S. Government to have both the authority to institute mechanisms for domestic oil demand restraint and fair sharing of oil, as well as the actual means in place to implement such mechanisms on short notice. IEP requires the United States to have a program of oil demand restraint to be achieved within 21 days of a declaration of an international oil emergency. Although IEP obligates the President to comply with the requirements of the agreement, it does not legally bind Congress to act accordingly. Regardless of its legality, 21 days is too short a period of time in which to enact legislation, hire and train professional staff, and implement demand restraint measures for an oil-dependent economy the size of the United States. The instruments for petroleum restraint implementation would have to be in place in advance of the emergency if the required demand reduction is to be attained. IEP assigns the responsibility of sharing international oil supplies to each participating government by making sure that no oil company within the country is disproportionately penalized or benefited due to its actions taken to implement the sharing program. It is doubtful that the program would work without the cooperation of the world's largest oil companies located in the United States.

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