Why do some countries use energy more efficiently than others? How is it possible that when the United States was less dependent on imported energy in 1973 it was affected significantly by a world energy crisis, and that it is more dependent on energy imports today with no apparent signs of an impending energy crisis? Answers to these quesions depend on the underlying price and income elasticities of supply and demand, as well on the role of technology. While today's energy environment may seem relatively calm, the potential for a new energy crisis will depend on what kinds of policies are adopted by the United States and the major energy consuming countries in the world.

The first point of comparison is the relationship between energy intensity and per capita income. Energy intensity measures the standardized energy consumption from all forms of energy needed to produce a dollar's worth of output, using a standard measure of output such as GDP, GNP, or National Income.

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