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A major factor that will help keep the U.S. from being at OPEC's mercy, at least during the next few years, is that America's energy-conservatio n record is not likely to be reversed. Thanks to federal fuel-economy standards and competition from efficient Japanese imports, new U.S.-made autos now average about 26 m.p.g., nearly double the mileage of cars in 1973. New refrigerators are about 72% more efficient than they were in 1972. While a few Americans may decide to indulge in such frivolities as heating their outdoor swimming pools during the winter or driving their Cadillacs at 80 m.p.h.--though the law still mandates a 55-m.p.h. limit--most conservation measures are already built in. In recent weeks, dozens of economists across the land have been soothing energy alarmists by intoning the same line: "No one is going to rip the insulation out of the walls." Says Energy Secretary Herrington: "The country is never going back to 1973. We have had a major changeover."
Another backstop against an OPEC-induced shortage is the strategic petroleum reserve started in 1975 by President Ford. By the end of May, the U.S. will have filled a series of hollow salt domes in Louisiana with about 500 million bbl., enough to meet U.S. oil-import needs for 100 days. The Reagan Administration has proposed stopping short of the final goal, 120 days' worth, as a way of cutting the federal deficit. But at these oil prices, the Administration is now thinking of continuing to stock up before the discount binge ends.
What else can America do to prevent another oil shock? The question has taken on renewed urgency in Washington. Among other proposals, the Administration wants to streamline the process for licensing nuclear-power utilities and plans to seek more money to support research into clean-burning coal plants. But the most talked-about concept in Congress is a tax on imported oil, which would pay the twin dividends of reducing the budget deficit and helping to prop up domestic suppliers by increasing the price. Says Heller: "The gains we make from the drop in oil prices ought to give us a kitty for helping the losers." As retail energy prices drop lower, the imposition of a small tax could be increasingly painless for consumers.
President Reagan, however, remains adamantly opposed to any increased tax. Some economists believe that the levy could harm the international competitive position of U.S. companies. Says Michael Tusiani, a New York City energy consultant: "An oil-import fee would make the cost of energy more expensive for U.S. manufacturers." The problem in passing a new tax into law would be persuading the whole country to accept an additional burden that in the short run appears to help only the J.R. Ewing types. "Most Americans seem to have little sympathy or understanding for the plight of the U.S. oil industry," says Sam Nakagama, a Manhattan economic consultant. Thurow concurs: "If you impose a tax on New England to subsidize Texas, there would be a big fuss."