(6) The price increases imposed upon the world by OPEC oil-producing nations in 1979 and 1980
contributed to conservation and the largest op ever experienced in American petroleum consumption. Many of
the efficiency improvements are structural in nature--new cars, home appliances, and factories that are far more
energy efficient than the ones they are replacing.
i. Another step taken to reduce this country's dependence on foreign energy was the deregulation of the
United States petroleum industry.
(1) Deregulation allowed the petroleum companies more flexibility in research and development,
exploration, and drilling.
(2) It started when President Carter took a crucial positive step by gradually removing government
price and allocation controls from crude oil (controls which had begun in August 1971).
(3) President Reagan completed the decontrol process in January 1981. The effects of oil price
decontrol, particularly at a time when OPEC was once again raising world prices, were starting. After many years
of frustration in developing domestic progress, drilling for oil reached record levels and domestic oil production
increased.
j. Despite recent progress, imported oil still represents nearly one-third of total U.S. oil supply. The
long term U.S. energy outlook remains unsettled despite considerable domestic energy progress and the adequacy
of current world supplies. Oil continues to account for about one-half the energy Americans use. DOD
projections show the United States can continue to produce crude oil at a rate of about 8 million BBL per day
until 2000. Thereafter, oil supplies will be harder to find and more costly to produce.
QM5200
21-8
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