Statement by Assistant to the President for Communications David R. Gergen on the Energy Situation and Oil Supplies

March 22, 1982

This past weekend, the Ministers of OPEC met in special session to decide how to cope with changing conditions in international oil markets.

One of the most important places where rapid changes are occurring, of course, is right here in the United States. During most of the 1970's, oil production here in the United States was falling steadily while domestic energy prices were rising, and our reliance upon foreign energy sources was increasing at a dangerous clip.

During the early 1980's, there have been striking changes -- drilling for oil here in the United States has increased, prices for consumers have dropped somewhat, and the reliance upon OPEC has also diminished. Many point to the onset of recession as the primary cause of these changing conditions in the United States. Clearly, the deterioration of our domestic economy has played some role. It is clear, however, that deeper and more significant forces are at work in the energy field -- forces that should continue at work after the economy begins its recovery. Oil use has declined far faster in the last few months than the recent recession alone would have indicated.

In this special briefing today on changes in the U.S. oil picture, we hope to demonstrate three basic points:

First, that the forces of a free marketplace are now having a positive impact upon America's energy outlook. The substantial increases we are now seeing in the search for domestic oil and in the achievement of greater energy efficiency both illustrate the power of market incentives.

Second, it is clear that among the most immediate beneficiaries of these changes have been American consumers. Over the past 12 months, the price of gas at the pump has fallen by some 15 cents a gallon on average, and the price of home heating oil is also falling.

Third, it is clear that the changes taking place are also strengthening America's security posture. We now have enough oil in our strategic petroleum reserve to replace all direct Arab OPEC imports for 140 days. Moreover, our degree of dependence upon foreign oil is declining: In recent weeks, oil imports have accounted for less than 30 percent of our consumption -- the lowest level since 1971. At long last, we are weakening the OPEC hammerlock.

Now let me sound a cautionary note. Just because we have improved our situation does not mean we have solved it. The oil crisis of the past is obviously not over. As Secretary Jim Edwards has said, ``We have to realize that the difference between a glut -- a word we really shouldn't use -- and a shortage is a matter of only a few million barrels of oil a day. We're not as secure as some people think.'' He points out that we still rely upon the Middle East for 41 percent of our oil imports. Here at home, the cost of energy will probably continue to rise because the cost of finding it will rise. Whatever happens in the short-term on oil, we must also continue the transition to an era of fission, fusion, coal, and renewable resources.

In short, we still have a long journey ahead. But it is also clear that we're finally making progress and, of greater importance, that we have at last found the right road.

Note: Mr. Gergen made the statement to reporters assembled in the Briefing Room at the White House for a briefing by Danny J. Boggs, Associate Director of the Office of Policy Development and Executive Director of the Cabinet Council on Natural Resources, Henry Nau, Director for International Economic Affairs, National Security Council, and Hunter Chiles, Director of Policy, Department of Energy.