The forces of supply and demand in a free-market economy will result in increased supplies and lower consumer prices for energy resources in the United States. A review of post-World War II trends in oil and gas resources shows the relationships between market price and the supply of oil and gas, and verifies the importance of profits in the economic cycle of energy development.

One of the main points considered in this analysis is the effect of government regulation on the oil and gas markets. Government price ceilings on both oil and gas have encouraged excessive consumption of scarce oil and gas resources while at the same time discouraging producers from searching for new supplies. This excess demand, coupled with the lid on prices, has resulted in shortages in several periods and a general misallocation of resources in the energy sector.

The abundance of domestic reserves of oil and gas remaining to be discovered in the United States is ample to carry our nation into the next century without excessive dependence on unstable foreign sources of supply. Free-market forces and successful "team effort" exploration will not only allow the efficient development of those reserves, but will also bring forth supplies of substitutes for oil and gas, such as coal, nuclear, thermal, wind, and synthetic fuels, as prices and costs warrant.

End_of_Article - Last_Page 1436------------