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Through taxes and other mandatory measures, the U.S. could switch from profligacy to a new conservation ethic. The remedies are well known. Much energy could be saved by increasing federal taxes on gasoline, clamping a steeply graduated tax on heavy, thirsty cars, pumping many more millions into mass transit, and granting tax credits for purchases of building insulation. In addition, the U.S. could and should expand its domestic supplies of energy by increasing the capacity of the Alaska pipeline, opening the Navy's petroleum reserves in California and Alaska, encouraging offshore drilling, liberalizing controls on the strip-mining of coal (but adding guarantees that the lands would be reclaimed) and allowing natural gas prices to double or more.
The Perils of Military Intervention
Beyond conserving energy and recycling OPEC's money, the oil importers have no feasible weapons against the cartel. A trade war against OPEC would fail. If the U.S., for example, embargoed its shipments of food or machines to the oil producers, the Soviet Union and other countries would be eager and able to fill the gap.
Military intervention could be extremely risky. There is always the danger that the Soviets would step in on the side of the Arabs—or extract a high political price from the West fojr staying out. Pipelines might be vulnerable to sabotage, though captured oilfields could be fairly easily protected. In any event, U.S. authorities condemn the wave of fantasizing about oil wars as "highly irresponsible." Military intervention, says a Washington policymaker, would be considered "only as absolutely a last resort to prevent the collapse of the industrialized world and not just to get the oil price down."
The U.S. would be forced to use its "military option," however, in the case of any clear and immediate danger that Saudi oil would fall into hostile hands. There is concern in Washington that in several years an extremist force might try to grab control (see box page 24). Faisal still has no shortage of enemies and covetous neighbors. At some future date, he —or his successor—may be motivated to relax prices in return for U.S. support to preserve the Saudi regime against a radical threat. He has no reason to do so now, although time and again last year Yamani proclaimed that Saudi Arabia was struggling to reduce prices to help the West but was blocked by Iran and other hawks within OPEC. Yamani lost much of his credibility among U.S. and European leaders when Saudi Arabia in August canceled an oil auction that might have brought lower prices and in November led the latest price rise. Says a U.S. official who has dealt with the Saudis: "Faisal does not want to bring down prices now and throw away his bargaining power for a settlement with Israel."
A settlement with Israel would not itself lead to a price reduction. The non-Arab nations—Iran, Venezuela, Nigeria, Indonesia—though not part of the conflict, still want to maintain or increase prices. Yet marked progress toward peace on terms acceptable to the Arabs is absolutely essential before prices can soften; the Arabs will