US energy security and policy options for the 1990s

Abstract

This paper makes the case that the current complacency regarding the world oil market and the weakened position of OPEC in the aftermath of the Gulf War is premature as well as shortsighted. It proceeds to argue that in the foreseeable future, a core group of OPEC countries, all located in the Persian Gulf, that hold two-thirds of the world's proved reserves of oil, may regain control of the world oil market and thereby develop into a more dominant cartel than OPEC was in the 1970s. Given the pattern of production and consumption of energy in the 1980s and those projected for the 1990s, oil will remain the most critical energy source into the 21st century both for the USA and the world. Progress in terms of improved energy efficiency in the form of conservation, and fossil fuel substitution in the form of renewables, is not expected to increase the energy security of the USA by 2000 given present circumstances and the absence of a comprehensive national energy policy. On the contrary, US energy security will be lessened and the USA will be increasingly vulnerable to external energy shocks.