Date: 1981-06-25
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. a humorous political cartoon published recently in one of the national news magazines featured a long line of OPEC oil ministers anxiously waiting. gas pumps in hand. to fill the tank of a lone American driver. In graphic terms. this portrayed the mysterious turn of events which has brought falling oil prices. surplus oil supplies. and smug speculation by many that the energy crisis is all but over. Day after day. there are reported reductions in the price of crude oil charged by exporting nations. Oil analysts are talking of a totally new environmentsomething to take seriously in longterm business planning. The question is whether this new situation represents merely a short respite or a real reversal in the crisis which has gripped the industrialized West for almost a decade. Saudi Arabias decision following last months OPEC meeting in Geneva. to refuse to raise its crude oil prices or cut production. has guaranteed at least a temporary continuation of the oil glut. With the Saudis producing at a rate of 10.5 million barrels per day. it is estimated that world production exceeds current demand by 2 to 3 million barrels per day. Crude oil prices on the spot market have tumbled amidst reports that buyers are refusing to pay official OPEC rates. Mexico. which exports about 700.000 barrels of oil a day to the United States. has cut its prices by $4 a barrel. a move matched by the British for highquality North Sea crude. Intense pressure has been levied on the African members of OPECLibya. Nigeria. and Algeriato reduce contract prices. which have run $5 to $6 a barrel more than those prevailing in the world market. Plummeting world prices have meant a 3- to 5cent reduction in the price of gasoline at the pump. a welcome relief in the midst of the summer driving season. To a large extent. this realinethent of the world oil markets has come about as a result. of increased conservation by American consumers and businesses. Total oil imports have averaged only 5.6 million barrels per day over the past 4 weeks. 14.8 percent below the average for a comparable period 1 year ago. Total U.S. energy consumption has dropped approximately 9 percent from last years totals. High prices and uncertain supplies have spawned a burgeoning energy conservation industry. Conserving energy. which was never regarded as the primary method of culting the Nations appetite for imported oil. has now become a critical factor in our national energy picture. Accelerated capital investment in new energyefficient equipment and booming sales in conventional conservation productssuch as insulationhave helped to slow energy consumption far more than the most optimistic forecasts. So where do these facts leave us? Are we. in fact. on the edge of an era of energy abundance. or is this a temporary phenomenon that could change overnight? The wrenching experiences of the past decade. with two recessions and unprecedented inflation. should have forced us to recognize that serious oil supplyinterruptions are probable. if not inevitable. The shortterm price stability we are now experiencing does not reflect a corresponding political stability in the Persian Gulf region. Virtually all energy forecasts indicate that the level of U.S. oil production has begun an irreversible decline. Continued recourse to imported oil to cover our energy deficit will jeopardize our national security. constrain the independence of our foreign policy. and curb our economic growth. Those who would base our national energy policy on the false hope of lower oil prices and surplus energy supplies are illadvised or have failed to learn the lessons of recent history. The Reagan administration is expected to unveil Its national energy policy plan by July 15. The plan will. in the words of the Secretary of Energy: Reflect the reformulation of energy policy in the context of the Administrations overall economic recovery plan. During the past 4 years. Congress and the Carter administration established a balanced program to facilitate the transition from oil to alternate sources of energy. The increased use of coal. the creation of a commerciallyviable synthetic fuels industry. the development of new energy sources such as solar. geothermal and biomass. and the promotion of energy conservation. were the cornerstones of this comprehensive program. In the shift from one administration to another. it is critical that consistency characterize our Nations energy policy. Disavowal of these goals. in the name of fiscal restraint. would not serve the interests of our Nation or our allies. and would seriously jeopardize our national and economic security. It is easy to to misinterpret longterm trends on the basis of todays headlines. It is easy to be distracted by small swings in price or production that can create a glut or shortfall in world oil markets almost overnight The truth is that the United States and other major world oil consumers can expect more disruptions in oil supplies. sharply rising prices and declining domestic production. We can reduce the risks attendant to the events with reasoned and consistent policies founded on the experiences of the past. An energy strategy should improve the Nations longterm security and prepare for sudden crises. This is the standard by which the administrations energy plan will be measured.