Daniel Yergin

Paradoxical but true: An industry in which U.S. companies and technology lead the world is in deep trouble here at home. The industry is oil and gas, especially the exploration and production parts of it. Even as major U.S. drilling and exploration companies help find new deposits around the world--contributing about $13 billion in export earnings to the U.S. trade account--the number of drill rigs working in the United States is at its lowest point since 1942.

Despite plentiful supplies of oil in world markets, some energy experts fear the United States and other industrial nations may relive the shortages of the 1970s as early as the 1990s. That bleak view emerged in interviews with energy specialists, who were asked to assess where America stands now that energy programs once touted as "the moral equivalent of war" by former President Jimmy Carter are fading into oblivion in the free-market era of President Reagan.

Without widespread notice, a change has occurred in the world oil business that will have long-term implications for U.S. job-seekers and investors, companies and universities. The outlook has shifted to growth. The International Energy Agency, an organization of petroleum-consuming countries set up in the 1970s, recently forecast strong increases in energy demand from now until 2010, with oil usage growing 4% a year in Asia and less rapidly elsewhere. But prices will barely increase.

The world greeted the death of industrialist and philanthropist Armand Hammer in as richly varied a way as it reacted to his life: with awe and praise for his endeavors on the international stage, tempered by diplomatic silence, criticism and even relief from some of his many antagonists. Hammer, 92, the chairman of Occidental Petroleum Corp., died Monday night at his home in the Holmby Hills neighborhood of Los Angeles after a brief illness.

Jog your memory a little. It has only been a decade or so since public figures were exhorting us all to help the nation's campaign for energy self-sufficiency. Little cars were replacing big cars and experts were drawing charts showing a huge shortfall in energy supplies by the turn of the century if everybody didn't do their part. All that is filed away now as part of yesterday's problem. The crisis came and went, then came and went again.

A newsroom colleague used to offer up a clear-cut, two-word solution whenever natural gas prices would soar: "Bomb Canada." But, alas, things aren't so simple -- especially not these days. Long regarded as an energy source that was basically inexpensive, natural gas has entered a new age, a period comparable to the era of price rises that hit the oil industry starting in the 1970s.

Exxon Corp., together with the Japanese government and several major Japanese companies, appears to be on the verge of winning approval from Soviet authorities to explore for oil and gas on Sakhalin Island off the Siberian coast, an area off-limits to foreign oil explorers for the past 70 years but considered one of the most promising untapped oil fields in the world.

U.S. missile strikes in Iraq and the postponement of a United Nations agreement letting the rogue nation sell oil on world markets caused crude oil and gasoline prices to jump on commodity markets Tuesday. Nervous investors also bid up oil stocks. But analysts were divided on how the events would affect gasoline prices at the pump, with some saying the loss of Iraqi oil in itself is not significant enough to make a difference.

American motorists, fuming over high gasoline prices, can take some comfort from not living in Italy or Sweden or France. European gasoline prices, which were already over $3 a gallon in many countries due to high government taxes, have skyrocketed in the wake of the Iraqi invasion of Kuwait to as high as $4.92 a gallon in Italy, $4.85 in Sweden and $4.37 in France. To put that into perspective, a 15-gallon fill-up in Rome could cost as much as $74.

Six major oil companies that own and operate the Prudhoe Bay oil field in Alaska said Tuesday that they will spend $1.1 billion to boost oil production and arrest a decline in output from the massive field that provides about 18% of the nation's total production. Los Angeles-based Atlantic Richfield Co. and BP America Inc.