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US Govenrnment Afraid of Oil Price Peak and Decline

The U.S. government neds a strategy to minimize potentially dire economic consequences after worldwide oil production peaks and begins to decline

The U.S. government needs a strategy to minimize potentially dire economic consequences after worldwide oil production peaks and begins to decline, the investigative arm of Congress said Thursday.

Though experts disagree about when daily oil output will reach its maximum level -- or whether they have done so already -- the Government Accountability Office said in a report that most studies have found oil production will reach a peak sometime between now and 2040.

The report warns that, as the world's largest oil consumer, the U.S. is vulnerable to significant economic troubles, brought about by rising prices, if a peak arrives and no technology exists to replace petroleum-based transportation fuels.

"The consequences of a peak and permanent decline in oil production could be even more prolonged and severe than those of past oil supply shocks," the GAO report said.