Oil and Natural Gas From Alaska, Canada, and Mexico--Only Limited Help for U.S.

The United States is 75 percent dependent on oil and natural gas for energy, and import dependency will continue through the 1990's. Estimates of domestic production include projections for Alaska, but because time is needed to issue leases, explore and develop drilling sites, build the transportation systems, and bring production on line, the outlook for increased oil and gas supplies from Alaska is limited, at least through 1985.

Supplemental gas from Canada will not significantly help meet U.S. demand and may eventually be cut off because Canada is committed to energy self-reliance, and will make every effort to use or reserve its oil and gas for internal use. Canadian oil and gas will be subject to contracts of 6 years or less and be priced at or above world levels. Mexico will probably be one of the primary sources of oil before the year 2000. The Mexican government has indicated a reference for a conservative production policy based on the perceived ability of the Mexican economy to absorb oil and gas revenues without causing excessive inflation. Also, the contract between the government-owned petroleum monopoly and six U.S. gas companies requires the construction of new pipeline facilities if increased import quantity is negotiated. U.S. policymakers should give careful consideration to the domestic energy policies of Mexico and Canada. Concentrated effort should be made to increase domestic production, including the development of synthetic fuels, and unconventional oil and gas resources. The United States also has to conserve, and to utilize as efficiently as possible its domestic supplies to get through the 1980's and 1990's. The decline in domestic production cannot be offset by synfuels development during the 1980's and 1990's because of lead times and other constraints, but unconventional gas appears to offer more promise, because several technologies are already operational on a commercial basis.