Brookings Papers on Economic Activity · 1974 · 13 citations · 0 references
Public AffairsEconomicsNatural Resource EconomicsEconomic PolicyEnergy EconomicsEnergy PolicyEnergy Commodity MarketsEnergy SecurityFossil Fuel PolicyOil EconomicsOil RegulationOil TaxationFossil Fuel Demand ManagementNatural GasOil DemandOil Price ShocksOil PricesOil Production EconomicsOil Supply ChainsWorld Economy
THE WORLD ECONOMY now depends almost entirely on fossil fuels for its energy. Even according to the most optimistic assumption of the Atomic Energy Commission, fossil fuels, especially oil and natural gas, will be dominant sources of energy until well into the twenty-first century. The supplies and demands for energy are, however, intricately connected in terms of both fuels and locations, so that marginal changes in one part of the system elicit responses in other parts, especially affecting the United States, which is both the largest producer and the largest consumer. The stress on the system in 1973 and 1974 became apparent when world oil prices were raised sharply, intensifying interest in reducing U.S. dependence on foreign supplies. Events since then bear plain witness to this phenom-