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. This paper examines this thesis in light of post-World War II trends in oil and gas resources. A review of these trends 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 and incentive prices have encouraged both excess consumption and inefficient production of oil and gas resources. As the nation’s oil and gas markets come out from under the labyrinth of government controls, one of the keys to success for those in the oil and gas business will be the ability to use innovative marketing techniques in nonregulated markets.

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.

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