Energy Policy: Options for the 1990s

October 12, 1990

Report Outline
Special Focus


For the third time in 17 years, a crisis in the Middle East has spurred Americans to consider the need for a national energy policy. The rapid rise in gasoline prices that followed Iraq's occupation of Kuwait has again demonstrated the dangers of U.S. dependence on imported oil. But environmentalists, Congress and the White House all have different ideas about reducing the need for oil imports. As a result, few changes in energy policy may occur.

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Iraq's occupation of Kuwait, and the subsequent deployment of American forces to the Persian Gulf, have once again forced Americans to consider their seemingly insatiable appetite for energy—and oil in particular. Nearly 45 percent of the oil consumed in the United States is imported, up from 37 percent in 1973, and more than a quarter of these imports (26.3 percent) comes from the Persian Gulf. That amount has more than tripled in the last five years; in 1985, just over 7 percent of U.S. oil imports came from the gulf. Oil imports from the region are now at their highest level since the mid-1970s.

The gulf crisis caused a major disruption in world oil supplies. Iraq and Kuwait had been supplying 4.3 million barrels of oil a day, or 9 percent of the world's total. This supply was cut off when the United Nations voted to impose a worldwide ban on trade with Iraq and occupied Kuwait. To help meet the shortfall, Saudi Arabia, the United Arab Emirates, Venezuela and other oil-producing nations have stepped up production in recent weeks. The Department of Energy now predicts that the shortfall in world oil supplies will drop to a million barrels a day by next month.

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