Analysis Of The Energy And Economic Effects Of The Iranian Oil Shortfall V. EMD-79-38

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EMD-79-38 1 (1979-03-05)

handle is hein.gao/gaobaaysl0001 and id is 1 raw text is:

REPORT BY THE

Comptroller General

OF THE UNiTED STATES

Analysis Of The Energy And Economic

Effects Of The Iranian Oil Shortfall

GAO analysis of readily available information indicates that:

--The net apparent shortfall to the United States is rather small,
about 3 percent of U.S. consumption. But the shortfall to the U.S.
consumer may be greater. No particular product or industry should
be disproportionately affected.

--The shortfall is not large enough to result in a general activation of
the International Energy Agency's allocation program and an indivi-
dual activation by member nations is also unlikely. However, further
major cutbacks by other countries could be disastrous.

--A potentially more serious consequence of the shortfall is higher oil
prices. Rising prices due to the tight oil market will increase infla-
tion and unemployment and decrease economic growth.

--The Department of Energy has a number of programs that possibly
could be used to overcome the shortfall and meet its commitment
to the lEA. Questions exist, however, as to how effective many of
DOE's programs would be.

--The Iranian situation underscores the fact that the United States is
not prepared to deal with supply disruptions. In the longer term
DOE needs to strengthen its conservation programs, encourage more
exploration and development in areas outside of OPEC, and move
more rapidly to a renewable energy resource base.

108750

0 03I934 EMD-79-38
MARCH 5, 1979