Energy Crisis
The Coming Energy Crisis?
• • All warning signs that existed prior to the energy crises of 1973 and 1979 exist today. Various energy security measures indicate that the potential for an energy shortage is high.
As submitted to Oil & Gas Journal for publication February 3, 2003
James L. Williams, President, WTRG Economics E-mail: wtrg@wtrg.com Phone: (479) 293-4081 I. Introduction Various measures of US energy security indicate that the US might be heading for an energy crisis. Many of the warning signs that existed before the energy crises of 1973 and 1979 exist today and they indicate that the current situation could be even worse. US dependence on petroleum imports has grown steadily for over a decade and has been at record levels for several years. Petroleum inventories are low and the ability of Strategic Petroleum Reserves (SPR) and commercial petroleum stocks to cope with an interruption in imports matches the historic lows preceding the 1973 and 1979 energy crises. The potential for an energy crisis has never been higher. Oil prices have recently exceeded $30 per barrel and they may continue to increase. The disruption of Venezuelan oil supplies has increased the US dependence on Middle Eastern oil and made the US more susceptible to supply interruption. With the crisis in Venezuela, the capacity of OPEC to meet any additional supply interruption is limited and a war with Iraq would put OPEC at its limit. Any energy crisis in the near future will hinder President Bush’s efforts to stimulate the economy through tax cuts and other fiscal measures. An energy crisis could cause a recession, inflation, and higher unemployment. In this article we will discuss various measures of energy security, import
A. F. Alhajji, PhD. Ohio Northern University E-mail: a-alhajji@onu.edu Phone: (419) 772-2080 dependency and vulnerability to assess the current US energy situation. II. What Constitutes an Energy Crisis? Energy crisis is a situation in which the nation
• • All warning signs that existed prior to the energy crises of 1973 and 1979 exist today. Various energy security measures indicate that the potential for an energy shortage is high.
As submitted to Oil & Gas Journal for publication February 3, 2003
James L. Williams, President, WTRG Economics E-mail: wtrg@wtrg.com Phone: (479) 293-4081 I. Introduction Various measures of US energy security indicate that the US might be heading for an energy crisis. Many of the warning signs that existed before the energy crises of 1973 and 1979 exist today and they indicate that the current situation could be even worse. US dependence on petroleum imports has grown steadily for over a decade and has been at record levels for several years. Petroleum inventories are low and the ability of Strategic Petroleum Reserves (SPR) and commercial petroleum stocks to cope with an interruption in imports matches the historic lows preceding the 1973 and 1979 energy crises. The potential for an energy crisis has never been higher. Oil prices have recently exceeded $30 per barrel and they may continue to increase. The disruption of Venezuelan oil supplies has increased the US dependence on Middle Eastern oil and made the US more susceptible to supply interruption. With the crisis in Venezuela, the capacity of OPEC to meet any additional supply interruption is limited and a war with Iraq would put OPEC at its limit. Any energy crisis in the near future will hinder President Bush’s efforts to stimulate the economy through tax cuts and other fiscal measures. An energy crisis could cause a recession, inflation, and higher unemployment. In this article we will discuss various measures of energy security, import
A. F. Alhajji, PhD. Ohio Northern University E-mail: a-alhajji@onu.edu Phone: (419) 772-2080 dependency and vulnerability to assess the current US energy situation. II. What Constitutes an Energy Crisis? Energy crisis is a situation in which the nation