An Empty Pump Down the Road?

This article, which appeared in the GAO Journal, No. 2, Summer 1988, discusses the threat of another energy crisis due to: (1) the world demand for oil, which fell during the first half of the 1980s, but has risen during the past 2 years; (2) a marked slowdown in the growth of world oil production; and (3) a rise in U.S. oil imports. Although the U.S. Strategic Petroleum Reserve continues to grow under existing policy, dependency on foreign oil continues to rise and will probably reach 50 percent of the total oil requirements in the mid-1990s. The government needs to: (1) adopt policies to slow down the decline in domestic oil production; (2) provide tax incentives to stimulate the drilling of new wells for U.S. production; and (3) enhance the ability of U.S. companies to diversify their foreign supply sources.