While we celebrate the prosperity that has accompanied economic growth, a serious threat to that prosperity is ignored. America's economic growth depends on the availability of significant quantities of imported oil at stable prices.
But precisely because of this dependence, the nation's economic and political well-being is at risk. If ever there was a time for an honest reassessment of US energy policy, it's now.
What is needed is a substantial increase in federal investment to promote energy efficiency, a fundamental transition in power generation from fossil fuels to renewable energy, and a new generation of advanced nuclear-power plants. One of the recurring enigmas of recent history is how the United States can remain so dependent on imported oil. The Commerce Department reports that rising oil imports pushed the trade deficit to $168.6 billion last year, the highest in history. The surge in the trade gap, which exceeded the 1997 level by more than 50 percent, raises concerns that the US may be sleepwalking into a new energy crisis. The magnitude of the problem is easily stated. Oil accounts for 40 percent of US energy use. Falling oil prices have cut domestic oil production by 2.8 million barrels per day since the Arab embargo in 1973, while stimulating greater use. In the same period, dependence on foreign oil doubled - from 4.2 million barrels a day to 8 million. The huge rise in oil imports is itself greater than the total oil consumption of any other country except Japan. At this pace, within a few years, oil imports will supply 60 percent of US daily needs. Pundits who believe we should stop fretting about rising oil imports ignore the fact that while OPEC accounts for only 40 percent of world production, it possesses 75 percent of known reserves. The growing dependence on imported oil in general and the Persian Gulf in particular has several potentially serious implications for the US economy and national security. To the extent that OPEC's recapture of the dominant share of the global oil market will make price increases more likely, the US economy is at risk. Since 1973, sharp increases in the price of oil have always been followed by economic recessions in the US. What is the appropriate national response to the emerging energy- security threat? Unfortunately, some solutions in the past have become problems themselves. Coal, for example, is a major contributor to air pollution and global warming. Natural gas, though cleaner than coal, also loads the atmosphere with greenhouse emissions. …