Energy in Transition, 1985-2010 Final Report of the Committee on Nuclear and Alternative Energy Systems (1980) / Chapter Skim
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10 U.S. Energy Policy in the Global Economic Context
10 U.S. Energy Policy in the Global Economic Context
Pages 500-528
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From page 500... ...
This chapter deals with some international aspects of American energy policy, focusing particularly on the world supply and demand situation. The chapter opens with an overview of world energy developments before the 1973-74 oil price increase, an overview that brings out the growing dependence on oil and gas.
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From page 501... ...
The 22 percent growth rate of natural gas in Western Europe is especially remarkable; this was almost entirely at the expense of coal, the consumption of which actually declined. In Western Europe the share of petroleum in total energy consumption rose from 34 percent in 1960 to 61 percent in 1973, while that of natural gas increased from almost nothing to nearly 11 percent; coal dropped from 56 percent to 20 percent.
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From page 502... ...
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From page 504... ...
It is no accident that the energy deficits of the Western industrial countries were met entirely from increased oil imports and that trade in coal and natural gas remained relatively small. This reflects the low transportation cost of oil.
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From page 505... ...
None of the three noncommunist developed areas were self-sufficient in energy in 1960, and with production growing at a slower pace than consumption their energy deficits increased rapidly: about 12 percent/yr in the United States, 11 percent/yr in the "other developed" countries, and 10 percent/yr in Western Europe. Despite the somewhat lower growth rate, the European deficit remained the largest; 62 percent of European consumption had to be supplied from outside the area in 1973.
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From page 507... ...
Despite this price increase, oil consumption continued to grow, stimulated by the worldwide inflationary boom that started around 1972. The imbalance came to a head in the fall of 1973, when the fourth Arablsraeli war was accompanied by an embargo imposed by the Arab oil exporters against certain Western countnes, including the United States.
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From page 508... ...
Since in the short run energy consumption is not very sensitive to price changes, the consuming countries had little choice but to pay the higher pnce. Other energy commodities (coal, natural gas, and uranium)
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From page 509... ...
To relate these two main components of energy consumption to overall economic activity, it also gives GNP at constant prices, and for comparison purposes all figures are expressed as index numbers with base 1973. The main conclusion from Table 10-3 is that oil consumption has not continued the rapid growth evident from Table 10-1.
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From page 510... ...
Source: For oil consumption, Central intelligence Agency, international Energy Sratutu al Review, National Foreign Assessment Center (Washington, D.C.: Central intelligence Agenq (ER ISER 79-012)
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From page 511... ...
Until the advent of solar energy and other sustainable sources, the availability of energy minerals is therefore critical to world energy prospects. The number of energy minerals that are of practical importance is small oil, natural gas, coal, and uranium.
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From page 512... ...
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From page 513... ...
For oil shale and tar sands too, vast resources are known to exist, but much less is known about the cost of producing oil or gas from them; this question is discussed elsewhere in this chapter. Table 10-5 summarizes measured world recoverable energy reserves in 1974 as reported to the World Energy Conference 4 The total is in excess of 31,000 quadrillion Btu (quads)
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From page 514... ...
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From page 515... ...
Even greater uncertainty sunrounds "unconventional" gas, such as that in coal seams and geopressured bones. THE DEVELOPMENT OF WORLD OIL RESERVES The preponderance of oil in world energy consumption calls for a more detailed analysis.
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From page 516... ...
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From page 517... ...
The most recent expert consensus centers around 2 trillion barrels,7 about 3 times as much as proved reserves and the equivalent of 35 years' output at current rates. As pointed out earlier for natural gas, estimates of this type usually do not include production by unconventional methods.
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From page 518... ...
(The addition of another 10 million barbels of crude oil per day—the equivalent of two North Seas—would cut the demand Or OPEC oil to a point where allocation of cartel members' exports would become so difficult that the cartel might break down.) WORLD URANIUM RESOURCES Unless public resistance to the growth of nuclear power dictates otherwise, uranium may in due course challenge oil as the leading source of energy.
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From page 519... ...
Not only are many known uranium deposits spread over the Australian continent, suggesting that reserves are larger than the current estimates, but Australia's policy on uranium exports is also a matter of conjecture. The country has no urgent need for nuclear power, being well endowed with coal, hydroelectricity, and natural gas, so domestic demand is not an obstacle to exports.
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From page 520... ...
In lieu of a formal presentation of alternative global projections, we confine ourselves to a few general remarks on global energy perspectives.'t The developments described in Tables 10-1, 10-2, and 10-3 will serve as a background to these remarks. To begin with, we assume that the United States undertakes no new energy policy measures beyond those enacted by
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From page 521... ...
Even if energy conservation in the United States accomplishes a great deal domestically, it will be more than offset by demand growth in countries at the "takeoff' stage of development. By the year 2010, world energy consumption will probably be 3 - times as large as it is now.
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From page 522... ...
4. The Middle East and Africa will become large exporters of natural gas and uranium; U.S.
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From page 523... ...
7. Because of their predominance in oil, natural gas, and uranium, the Middle East and Africa will develop an even larger surplus in their energy trades, probably running into the hundreds of billions of 1972 dollars by the turn of the century.
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From page 524... ...
Conversely, a prohibition or retardation of offshore drilling would greatly strengthen the cartel's market power. Price controls on oil and gas, or other measures shielding domestic consumers from world energy pnces, would have effects opposite to that of accelerated conservation and domestic production; they would reinforce the pressure for a higher world oil price.
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From page 525... ...
To the extent that public distrust of nuclear power in the industrial countries slows its growth, the pressure on uranium supplies will decrease and the above-mentioned problems will be postponed, although the problems of the international oil market will intensify. A slowdown in the growth of U.S.
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From page 526... ...
It seems likely, therefore, that the developing countries as a whole will concentrate their investments in nuclear and hydroelectric power, at least by the end of this century, and that they will have to import increasing amounts of oil and uranium.* This prospect implies further strains in the international financial system, which is already being taxed by the aftermath of the 1973-1974 oil price increase.:3 The developing countries at that time generally had little leeway in their balances of payments for increased oil pnces; moreover, the recession in the developed countries induced by the oil price increase had a severe effect on their export earnings.
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From page 527... ...
The United Nations Statistical Yearbook contains am estimate of world GNP excluding services. If services were included, the growth rate would probably be a little higher, though still not very different from the growth rote of energy consumption.
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From page 528... ...
The cheaper U.S. dollar should in due course correct the current account deficit, especially if other industrial countries stimulate their economies from their present recession, thus further encouraging U.S exports.
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