Soviet Energy Supplies
THE Soviet economic system excels in the production of energy supplies. Energy includes commodities that Soviet central planning can control with relative ease. They are produced in bulk, are relatively homogeneous, and are easy to count. Furthermore, they are key inputs into the entire industrial process and are easy to sell on world markets in exchange for manufactured goods, which the system finds it more difficult to produce. Finally, the boundaries of the USSR encompass a significant portion of the world's known energy reserves. Those huge reserves, in combination with an economic system predisposed toward centrally controlled rapid growth, have propelled the USSR into its current position as one of the world's most significant producers of energy.
In 1980 the USSR produced almost 28 million barrels per day of oil equivalent (mbdoe) of energy, that being surpassed only by U.S. production of 31 mbdoe. Soviet oil production that year of slightly over 12 million barrels per day (mbd) easily exceeded the production of all other countries, including Saudi Arabia. Because the USSR consumes 85 percent of the energy it produces--75 percent of its oil production--its prominence as a producer does not carry over to export markets. Nevertheless, the USSR is the only industrialized country that has sustained net exports of energy (primarily oil) over much of the postwar period.
In mid- 1977, in the aftermath of several now-famous reports by the U.S. Central Intelligence Agency (CIA), widespread doubts began to develop concerning the ability of the USSR to increase further its energy output, primarily its oil. Those reports predicted that oil output would peak in around 1980 and then fall precipitously. The CIA contended that