Low oil prices threaten long-term supply

Journal Article · · Forum Appl. Res. Publ. Pol.; (United States)

OSTI ID:6112773

Barton, J

As domestic oil production has gone down, imports have risen. If current trends continue, we will depend on imports for more than 50% of our needs within two years, Representative Barton notes. The threat of US energy security arises not just from the volume of imports, but also from the sources. Oil imports from and particularly from Saudi Arabia, have skyrocketed. Overall, OPEC exports to the United States rose by almost 10% in 1988 while non-OPEC sources, such as Great Britain and Canada, declined by approximately the same amount. US oil production is down because world oil prices collapsed in 1986. Prices peaked at $42 a barrel in 1982. They began a slow decline that year, which lasted until 1986, when they literally plunged through the floor. They bottomed out at $10 a barrel in the middle of 1987 and are in the $14 to $17 range today. Representative Barton says this plunge was part of a calculated strategy by OPEC to force a substantial reduction in marginal US domestic production capacity, primarily stripper wells. OPEC also wanted to accelerate the erosion of the US reserve base by making exploration financially unattractive, he observes. Increased reliance on OPEC would create political and strategic vulnerability, he concludes.

• OSTI ID: 6112773
• Journal Information: Forum Appl. Res. Publ. Pol.; (United States), Journal Name: Forum Appl. Res. Publ. Pol.; (United States) Vol. 3:4; ISSN FARPE
• Country of Publication: United States
• Language: English

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