both oil and gas, which translates into increased oil imports, at least in the short term. In the longer term the development of other domestic energy forms (at first mainly electrical generation by coal and nuclear power, later synthetic liquids and gases derived from coal and oil shale, and finally solar and other long-term energy sources) will also contribute increasingly to the moderation of oil imports.
In general it is to be expected that the demand for fluid fuels in the rest of the world will increase faster in percentage terms than in the United States, especially if the developing countries are to realize their aspirations for rapid economic development. Given the probability that world oil production will peak in the 1990s and decline gradually thereafter, it is thus extremely unlikely that the United States will be able to offset its declining domestic production of fluid fuels by increasing its share of world imports. Instead, political and economic pressures on the United States to decrease its share of imports will steadily mount.
The availability of minerals is stated in terms of “resources” and “reserves.” Resources include all deposits known or believed to exist in such forms that economic extraction is currently or potentially feasible. Reserves are that part of the identified resources that can be economically extracted with current technology and at prevailing prices.
The price dependence of reserve estimates is important. As returns to producers rise, reserves in previously discovered fields increase, because more of the minerals underground become economically recoverable. An improvement in recovery technology may similarly add to reserves by making more of the resource available at the prevailing price. Policy changes can also affect reserves; a change in environmental regulations, for example, may make more or less of the basic resource economically recoverable.
Table 3–1 lists the estimates of the Supply and Delivery Panel’s Oil and Gas Subpanel of U.S. and world oil and gas resources and reserves. It can be seen that the United States, which consumes more than a fourth of the world’s oil production and about half the world’s production of natural gas, has only about a twentieth and a tenth, respectively, of the world’s proved oil and gas reserves. It should be noted, however, that the reserve figures in Table 3–1 do not reflect oil and gas in existing fields that have become economically recoverable as a result of the large price increases starting in 1973. The figures are therefore understated. Calculations to