ECONOMIC

will help shield us from disruptions in supply. The OPEC pricing decisionsof December were a forceful reminder of the Nation's growing needfor protection against foreign moves that affect the price and can alter theavailability of imported oil. Strategic storage will provide a first line ofdefense against the threat of disrupted supplies. This vital program mustbe implemented, and we must also take positive steps to lessen our economicdependence upon foreign oil.Measures that will make us less dependent on foreign energy supplieshave been proposed by this Administration; but unfortunately many ofthe most important proposals have not yet been accepted by the Congress.Some of the measures involve present costs which will yield much greaterfuture benefits. Others, which would lead to more efficient use of ourenergy resources, would benefit the Nation immediately as well as in thefuture.It is critically important—for energy security, environmental quality,and long-term economic productivity—that prices of domestic petroleumand natural gas be allowed to match more closely the full cost of thesefuels. In the immediate future oil prices should be allowed to rise as theywere intended to do under the Energy Policy and Conservation Act.Steps should also be taken which would help close the gap more rapidlybetween domestic and world market prices for petroleum, allow a freemarketprice for North Slope Alaskan oil, and deregulate the wellheadprice of new natural gas.Although a number of inconsistencies remain, the relation betweenthe Nation's goals for energy and for the environment has become clearerand the effects of existing policies more fully known. The time is ripefor reexamining environmental policy and determining whether the endswe all seek can be achieved at a lower cost to the economy and to thesecurity of our energy supplies.Taken together, all of the actions recommended here would help theeconomy to adjust to the new energy situation and do much to ensuremore reliable supplies of energy for the future. They would also signalto the world that this Nation is serious about developing secure suppliesof energy. Most important, these efforts would encourage conservationand give industry the confidence that will spur the production of bothconventional fuels and substitutes.REGULATORY REFORMAs economic problems have arisen and been dealt with by new policyinitiatives, the Government's role in the economy has grown ever larger.