President Carterhs plans to reduce oil imports will mean neither smaller oil price increases nor more stable supplies in the future, a world petroleum market expert asserted yesterday.
"All that we can reasonably expect is that prices will rise further and supply will remain uncertain," declared M. A. Adelman, an economist at the Massachusetts Institute of Technology.
Whether the United States imports 8 1/2 million barrels of oil a day, which it did in 1977, or 4 1/2 million, which is President Carter's target for 1990, the "threat" from the Organization of Petroleum Exporting Countries will remain, Adelman continued.
"The less we buy, the less they will produce," he predicted.
Adelman, one of five economists who spoke at an energy seminar at the American Enterprise Institute went on to say that there is little the U.S. can do to change the situation because "there is no basis for agreement" between the industrial nations and the members of OPEC.
Even without production of 2.5 million barrels a day of synthetic fuels, heavy oils and the oil-equivalent from unconventional natural gas that Carter is counting on to cut imports in 1990, Adelman predicted that oil imports "will drift downward" in coming years.
The demand for OPEC oil in 1985 will be only about 30 million barrels a day, a reduction of more than 1 million from current levels, he said. Higher prices will continue to reduce demand while the OPEC members keep a tight rein on production to keep prices high, he predicted.
Adelman said that Saudi Arabiahs decision to reduce production in mid-January from 10.5 million barrels a day to about 8 million did far more to boost prices than the halt in Iranian exports.
The MIT economist, who is the author of "The World Petroleum Market," said the World will be faced with "a chronic contrived deficit" of oil as OPEC keeps raising its prices.
OPEC nations "have not reached the optimum monopoly price" - the price above which producers would lose so many sales that their revenue would begin to fall rather than rise - he continued. "Sheikh Yamani (the Saudi oil minister) has floated a $40 price. I don't know if he is serious."
Adelman said the cartel has established itself so effectively now that he no longer believes a plan to disrupt it that he proposed several years ago would work. He had suggested that the right to sell oil for import into the U.S. be auctioned in a sealed bidding process so that producers would be encouraged to try to sell more oil by undercutting one another's price.
The other four economists also were highly critical of President Carter's energy proposals.
One, Milton Russell of Resources for the Future, a Washington-based, nonprofit research group, said that a crash program to develop synthetic fuels has major drawbacks. "A crash program probably implies a higher long-run cost of energy than a more orderly program and, depending on exporter reactions, could lead to higher intermediate-term oil costs as well," Russell said.