Disruption of foreign oil supplies for more than a year could wreak havoc on the American economy, but the United States is capable of replacing nearly three-fourths of its oil imports within five years, congressional researchers say.
Using available technologies and some government incentives, the nation could prevent another doubling of oil prices, which happened twice in the 1970s, through conservation measures and switching to other fuels, the Office of Technology Assessment said last Wednesday in a study requested by Sen. Charles H. Percy (R-Ill.).
"We are no longer as economically vulnerable to an oil cutoff as we once were," Percy, chairman of the Senate Foreign Relations Committee, said in response to the 158-page report.
The study was based on an assumption that the noncommunist world's crude oil production of about 45 million barrels per day was cut by 20 percent for five years. That 9 million-barrel shortfall roughly equals a shutoff of all Persian Gulf oil exports. The study assumes that about 3 million barrels of the reduction, roughly two-thirds of daily U.S. imports, would fall on the United States.
With a 400 million-barrel Strategic Petroleum Reserve and another 300,000 barrels in private U.S. stockpiles, such a shutoff would not hurt the economy much in the first year, the study said.
After that, oil prices could climb from their current price of $30 a barrel to $50 to $70 a barrel, depending on how fast Americans switch to electricity, natural gas and synthetic fuels and take conservation measures, the researchers said.
The report's underlying conclusion is that the United States is capable of replacing 3.6 million of the 4.5 million barrels of oil it imports daily within five years, through conservation and substitution of other energy sources.