The invasion of Kuwait graphically illustrates how dangerously dependent we have become on oil. Our military may be able to contain Saddam Hussein, but it cannot guarantee a dependable, cheap supply of oil. We cannot significantly increase our domestic production without sacrificing irreplaceable ecosystems in the Mississippi delta, the north slope of Alaska and our coastlines. Moreover, increasing domestic production can only be a stopgap measure. Once we deplete our remaining reserves we would be right back where we are now: dangerously dependent on an unreliable source of oil. In the long run our best defense is to reduce our demand.

The best way to reduce our demand is through the market mechanism: a dollar-a-gallon gasoline tax would give every American a strong incentive to conserve. We would demand less gasoline, thereby decreasing its price. It would cost more at the pump, but less would go to Saddam Hussein. If Saddam Hussein is successful, gasoline will soon cost a dollar more per gallon anyway. If we act quickly to reduce demand, we can keep that dollar here in our economy. A dollar-a-gallon gasoline tax would result in about $100 billion dollars revenue to offset the deficit. Because this money would stay in our economy, resulting in lower interest rates, it shouldn't lead to a recession. If Saddam Hussein is successful, we will send that $100 billion to OPEC, and a recession will be guaranteed. Though such a tax would clearly be painful, it would beat Saddam Hussein to the punch, take a huge bite out of the deficit and reduce acid rain, smog and the threat of global warming as well.

CARL R. HENN Rockville

Finally a voice of reason has been sounded on The Post's pages amid the overwhelming preponderance of cries for U.S. military intervention in the Middle East. The Evans and Novak op-ed column of Aug. 8, "Overkill on Saddam," represents one of the few attempts to explain what is happening in the Persian Gulf and to caution against U.S. military intervention there rather than adding to the anti-Saddam hysteria fueling this latest U.S. war drive.

What seems to be forgotten in U.S. media coverage of and commentary on the Iraqi invasion of Kuwait is that this is not U.S. oil we're protecting: it's Arab oil. We can no more justify sending troops to the Gulf to protect our "national interests" there than Saddam Hussein can. Things are not going the way we like in the Middle East, but that does not mean the United States has any business sending troops and armaments there.

George Bush says he is concerned about the safety of U.S. citizens in the Gulf. Well I and my Arab-American husband are without a doubt much more concerned about our relatives and all the other civilians in the Middle East who now stand a much greater chance of getting blown up in an Iraqi-U.S. conflict and any possible spill-overs (including a nuclear or chemical conflagration) than if Mr. Bush had kept the U.S. troops home.

If the Cold War is over, then it is time for the U.S. government to turn in its badge as self-appointed policeman of the world and take its place with the other nations of the world in embarking on international mediation efforts for conflict resolution, such as that now being attempted through the United Nations. It is high time the U.S. government refrain from further military adventurism abroad, which has earned the United States the hatred of Arab (and other) nationalists and which fuels the popularity of anti-U.S. leaders such as Saddam Hussein, brutal dictator though he is.

The United States cannot preach nonviolent conflict resolution when our government does not practice it. U.S. troops must be withdrawn from the Persian Gulf before more innocent lives are lost.

GAIL BOLING Washington

As the civilized world recoils in dismay from the savage way in which Iraqi forces, headed by President Saddam Hussein, have overwhelmed Kuwait, some will cluck their tongues and murmur that the United States has little moral ground on which to stand in this instance. After all, didn't U.S. forces all too recently suddenly descend upon Panama in similar fashion in blatant disregard of international law?

The comparison doesn't quite fit. U.S. forces moved into Panama to rescue that country from the toils of a dissolute dictator who was a key player in international drug traffic. And those same forces withdrew as rapidly as possible, after law and order had been restored.

Few expect Saddam Hussein to follow the example of President Bush. Not even Saddam Hussein's Arab allies believe his claim that Iraqi troops entered Kuwait at the request of revolutionaries who had staged a coup. And Saddam Hussein's thirst for power and prestige not only in his own backyard but also in the world will undoubtedly preclude any early withdrawal of Iraqi forces from Kuwait.

What can the nations of the world, led by the United States, do to frustrate Saddam Hussein's ruthless intention? The economic and political quarantine quickly imposed by President Bush and others is a sensible first step. Other strategies for containing Saddam Hussein's lawless power grab will depend upon events of the coming days and weeks.