99-Cent-Per-Gallon Illusions

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Every once in a while, Americans need to be reminded of their dependence on foreign oil. Such a reminder came last month when Saudi Arabia, Venezuela, and Mexico announced that they were curbing production in order to stop the fall in petroleum prices. Other producers are expected to follow suit. The brief return to 99-cent-per-gallon gasoline may be over.

Past events demonstrating dependence on oil imports - such as the oil embargo of 1973 - have created strong concerns, if not panic, followed by efforts to reduce that dependence. President Carter's energy-saving campaign, "the moral equivalent of war," resulted in reduced speed limits, more fuel-efficient automobiles, expedited research into alternative sources of energy, and strong measures to reduce energy consumption. Some in Washington even raised the highly unpopular idea of a major increase in the gasoline tax.

The latest reminder not only fails to create concern, it encounters broad complacency and even generates ridicule of Carter for his pessimistic predictions about the end of readily available and reasonably priced oil and gas. Today, energy conservation measures are more ignored than followed, less efficient cars are the rage, and speed limits have risen. Talk of a gas-tax hike is dead.

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Is this complacency justified? US dependence on foreign oil has not declined. In 1996, oil imports represented 53.1 percent of domestic demand; that figure compares with 43.2 percent in 1991. The imports for 1997 were expected to reach 55 percent.

At the same time, domestic production is decreasing. More oil is available. Estimates of the world's oil reserves are constantly revised upward. New technology has improved the means of finding new oil and of recovering the maximum of old reserves. New areas are opening up. A mild winter has temporarily reduced the demand for heating oil. The Asian economic decline means less demand for oil.

Even if supplies seem available today, factors other than the shortage of oil could change the picture. Oil and gas reserves are still found primarily in volatile areas. Approximately three-fourths of the known world reserves are located in the unpredictable Middle East where today the US has deployed substantial military forces in the Persian Gulf.

But, ironically, it is not the US that benefits most directly from access to the Gulf resources. An increasing percentage of the imports to the US come from the Western Hemisphere, not those Middle Eastern regions where Washington is spending billions to protect access to the resources. At a time of growing domestic resistance to long-term overseas commitments, for how long will the US public support expensive deployments that are, in part, at least, protecting oil resources for someone else?

Nor are new areas of the exploration and production free of problems. Central Asian oil must be exported through long, expensive pipelines; the very routing of these lines has become a tangled diplomatic issue involving the US, Iran, Russia, and Turkey. The political situation in these parts of the former Soviet Union is far from stable. And sudden political surprises in older regions of production in Africa and Latin America can affect access to resources.

Some countries such as Indonesia are approaching the point at which their own economic needs will absorb most domestic production, leaving little for export. And if the Asian economies should regain their dynamism, new demands for energy could be enormous.

One prediction is that, if the Chinese economy grows as expected, new energy requirements could equal today's total production by members of the Organization of Petroleum Exporting Countries.

As effects of global warming become more proven and apparent, pressures will grow for curbs on hydrocarbon energy and new impetus will be given to alternatives. Hydrocarbon energy, whatever the success of the new technology, isn't limitless.

But to most Americans, worry over the end of oil is, like the health of Social Security, something to be passed on to future generations.

* David D. Newsom, former undersecretary of state, is Cumming Memorial Professor of International Affairs at the University of Virginia.

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