The U.S. oil and gas industry has been dramatically weakened by the recent oil price collapse. Domestic drilling activity reached a new post-World War II low during the summer of 1986. Given a weak, unstable oil price outlook, U.S. capability will continue to deteriorate. In the last year U.S. imports of foreign oil have risen significantly, and if market forces alone dominate, U.S. dependence is expected to rise from 32% in 1983 to the 50 to 70% level in the not-too-distant future. The 1973 oil embargo and the subsequent attempts to improve U.S. energy security vividly demonstrated the huge costs and long periods of time required to change our energy system. These facts, coupled with the nation's generally short-term orientation, suggest a strong likelihood of a new U.S. energy crisis in the early to middle 1990s.