a217  1059  01 Jun 80
AM-Gas Cut, Bjt,650
Harvard Study Backs 25 Percent Cut in Gasoline Use
For release at 6:30 p.m. EDT. This story moved in advance on the
business wire.
By WILLIAM GLASGALL
AP Business Writer
    NEW YORK (AP) - The United States is ''woefully unprepared'' for new
interruptions in oil imports and should cut gasoline consumption by
20 to 25 percent to ensure its future international security, a
Harvard University report said Sunday.
    The report by Danel Yergin, director of the international energy
seminar at Harvard's Center for International Affairs in Cambridge,
Mass., said the suggested reduction in gasoline use ''would have the
same effect as adding . . . a new Kuwait - or a new Iran - to the
world oil market.''
    The United States imports one-half its oil supply. Gasoline accounts
for one-third of the oil consumed in the United States, and ''one out
of every nine barrels of oil used in the world every day is burned as
gasoline on American highways,'' the report said.
    Thus, a sharp cut in U.S. gasoline use could ''change the balance in
the world oil market, help to cap prices and be a major step toward
bringing inflation under control,'' it said.
    A cut also ''would increase our margin of safety when the next
'accident' interrupts part of the flow of oil'' and ''would provide
more flexibility for U.S. foreign policy, both in 'normal' times and
in a crisis,'' said the report.
    ''There are good reasons to think that the problems gasoline
shortages created in the 1970s were but previews of the coming
attractions of the 1980s - not in every year, but at various times,''
Yergin said.
    ''The constraints on oil, which many Americans experienced as gas
lines, are likely to become more pronounced in this decade,'' he said,
adding: ''in the 1980s, those constraints may give rise to sharp
security crises as well as to deteriorating economic conditions.''
    The report, entitled, ''The Dependence Dilemma: Gasoline Consumption
and America's Security,'' was based on a symposium held at Harvard
last March.
    U.S. gasoline use has fallen about 8 percent in the past year as a
series of world oil price increases following the revolution in Iran
pushed the cost of a gallon of gasoline up by about 40 percent.
    According to American Petroleum Institute statistics, the drop in
consumption left U.S. gasoline use at 6.5 million 42-gallon barrels a
day in April, down from 7.1 million barrels a day in April 1979 and
7.4 million barrels a day in all of 1978.
    But the Harvard report suggested U.S. gasoline use could be as low
as 5 million to 5.5 million barrels a day if auto fuel mileage and
driving habits continue to improve, and if new taxes are levied to
encourage conservation.
    The 20 to 25 percent reduction in gasoline use from recent levels
would be similar to energy savings already accomplished in other
sectors of the economy, ''with relatively minor efforts and relatively
small penalties,'' the report said.
    But the report cautions that ''no one can say with any confidence
how easy or how difficult'' it will be to reach its recommended
gasoline consumption goals.
    The report said many of the Harvard symposium's participants backed
an auto gasoline mileage goal of up to 40 miles per gallon after
1985, a sharp increase from the 27.5 mpg average mandated by federal
law for that year.
    ''At the same time, it was recognized that the real barrier for
Detroit is the enormous amount of capital required to meet those
(post-1985) standards,'' the report said.
    The report also suggested imposing new gasoline taxes, comparing the
average 14 cents a gallon in taxes paid by U.S. motorists with the
1.83-a-gallon levy in Italy and the $1.62-a-gallon tax in France.
    Revenues raised by a new gasoline tax - as high as $2 a gallon in
one participant's proposal - would be returned to consumers and
businesses either in direct rebates or in reductions of other taxes,
the report said.
    President Carter has proposed an oil import fee that would add 10
cents a gallon to gasoline prices, but many members of Congress oppose
it.
    
ap-ny-06-01 1359EST
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