NCPA - National Center for Policy Analysis

Why Hasn't America Weaned Itself From Foreign Oil?

March 21, 2003

For thirty years, American presidents have tried to establish America's energy independence. In 1973, when the U.S. was importing 40 percent of its oil, President Nixon pledged to end oil imports by 1980.

Thirty years later, the United States still imports 60 percent of its oil despite an increasingly energy-efficient economy. Why?

Experts say the United States remains hooked on oil imports for several reasons:

  • The Organization of Petroleum Exporting Countries (OPEC) -- especially Saudi Arabia and its neighbors -- is skillful in its management of oil prices so as to maintain America's dependence.
  • Their strategy is to keep prices higher than they would be if set in a free market, but low enough to keep alternative fuels and technologies uncompetitive.

The United States could have foiled this strategy by discouraging consumption through higher tariffs and taxes, but that would probably further dislocate the economy and certainly carries too high a political price.

President Ronald Reagan initiated one of the few policies which actually did help control imports when he lifted oil-price controls. That set off a boom in domestic drilling -- which arrested, through the mid-1980s, the downward spiral in U.S. oil output.

A current option to help control imports would be to permit drilling in the Arctic National Wildlife Refuge. While that may not make the United States totally independent from foreign oil, it would certainly go a long way toward improving matters, experts surmise.

Source: Bob Davis and Bhushan Bahree, "How OPEC keeps America Hooked on Imports of Oil," Wall Street Journal, March 18, 2003.

For text (WSJ subscription required),,SB104794174243147700-search,00.html


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