Energy Security and the World Oil Market

GAO discussed the possible economic and other impacts of an oil supply disruption. GAO noted that: (1) a major oil supply disruption would severely impact the entire economy; (2) U.S. oil consumption and dependence on external oil sources have increased since 1985 after a significant decline and are now approaching 1976 levels; (3) world oil production outside of the Organization of Petroleum Exporting Countries is likely to remain stable or decline in the next decade; (4) U.S. daily production has decreased by about 1 million barrels since 1985; (5) the development of the Strategic Petroleum Reserve (SPR) has improved U.S. ability to respond to a supply disruption; (6) participation in international oil-sharing programs has also contributed to U.S. energy security; (7) various legislative authorities allow the President a broad variety of responses to a supply disruption, but Congress should expand current authorities to exempt oil industry executives from conflict-of-interest requirements during a supply disruption and allow the President greater authority to draw on SPR; and (8) U.S. policy options for improving energy security include developing alternative fuel technologies, continuing to stockpile petroleum, adopting standby measures to avoid excessive reliance on SPR, and maintaining a stable economic and regulatory atmosphere to encourage investment in petroleum and alternative energy programs.