Costs of oil dependence: A 2000 update

Oil dependence remains a potentially serious economic and strategic problem for the United States. World oil prices leapt from $10 per barrel in Janua ry of 1999 to $30 per barrel in the summer of 2000, as a direct consequence of supply restraints by the OPEC cartel. Estimates of the total economic c osts to the United States of such oil market upheavals during the last 30 y ears are in the vicinity of $7 trillion, present value 1998 dollars, about as large as the sum total of payments on the national debt over the same pe riod. Transportation is at the center of the oil dependence issue. More tha n 25 years after the first world oil crisis in 1973-74. the U.S. transporta tion system comprises 67% of the U.S. petroleum demand (25% of world oil de mand) and relies on oil for more than 95% of its energy needs.