The effects of higher oil prices, mandatory conservation actions, and the economic recession could reduce oil demand later this year and in 1980 to the point that the nation will need to import only about 8 million barrels of oil a day, according to internal administration estimates.
If those calculations are correct, the pledge given by President Carter last week at the Tokyo summit to limit oil imports to an average of 8.5 million barrels a day in 1979 and 1980 would have little if any on either oil imports or the economy.
And yesterday White House press secretary Jody Powell confirmed as much. "In terms of immediate impact, I don't think there's any adverse effects in the 1979 or 1980 period," he declared.
Asked if imports would be as high as 8.5 million barrels a day in the absence of the pledge, Powell said, "I don't think anyone knows that for sure."
Recently, imports of crude oil and refined products have been running about 8 million barrels a day, and in the week ended June 22 hit 8.44 million. Last year imports averaged 8.1 million barrels a day, and in the first quarter of 1979 were 8.5 million.
The announcement by Saudi Arabia yesterday that it will increase production above the 8.5-million-barrel mark that it had set should ease substantialy tight world crude markets.
In the short run, if more crude becomes available, U.S. imports undoubtedly would jump as oil companies sought to rebuild depleted inventories of both crude oil and refined products.
Such a jump would not violate the Tokyo pledge even if imports rose above 8.5 million barrels a day for a time, since the pledge is for an annual average.
Even though it normally takes a month to six weeks for tankers to reach the U.S. from the Persian Gulf, the effect of higher Saudi output would be felt immediately. Spot market prices, which are still above $30 a barrel, should drop sharply, and U.S. refiners could begin to refine more products out of current crude stocks knowing replenishment for their inventories was already in the way.
"Another 500,000 to 1 million barrels a day should be more than enough to clear the market," said one administration energy analyst, meaning supply and demand would be in balance. "It probably would already be clearing at these prices except for the concern that Iran will go dowm again. That uncertainty is pushing everyone to stockpile whatever oil he can."
Early this year, a number of oil industry groups were forcasting average oil demand at about 19.2 million barrels a day during 1979, with imports averaging about 9 million a day.
Between October of last year and May of this year, one group, the Independent Petroleum Association of America, trimmed its forcast of consumption from 19.4 million barrels a day to 18.9 million. IPAA similarly reduced its estimate of imports from 8.9 million barrels a day to 8.5 million.
The IPAA change reflected lower consumption in the first three months of the year than expected and the new lower forcast for economic growth.
One administration estimate suggest IPAA did not go enough in its revisions, and that consumption in the fourth quarter of this year will be no higher than it was the final three months of 1978.
According to this internal estimate none of the forcast really takes into account the reduced consumption due to emergency actions, such as mandatory thermostat settings in non -- residential buildings which Carter is expected to order as soon as the Department of Energy completes drafting of the necessary regulations.
The forecasts, including the one DOE still uses officially, also do not adequately count the effects of economic slowdown, the effects of higher prices due both to the phased decontrol of domestic oil prices ordered by President Carter and to the OPEC increases, or the fact that the U.S. steadily is using energy more efficiently at the rate of about 1.4 percent a year.
A recessior will mean that business will use less oil for every thing from making deliveries to heating buildings so that assembly line workers can put in late night overtime next winter. Higher prices will cause both business and consumers to conserve whatever they can.
The internal estimates say consumption this year most likely will run about 18.6 million barrels a day and rise by only about 0.2 million barrels a day in 1980.
At that level, imports would run only about 8 million barrels a day, assuming virtually no more oil is put into the strategic petroleum reserve.
Even if Carter's pledge to restrict imports should begin to bite unexpectedly, the availability of additional oil supplies would still put the world market back into better balance.