ABSTRACT

There is today almost universal agreement that we are facing a potential energy crisis, both imminently in the U.S. and, possibly after the turn of the century, worldwide. All studies of energy supply and demand indicate such tremendous growth in demand that conventional sources will be hard pressed to supply it.

The short range annual growth rate in domestic and free-world demand for petroleum is estimated at 5% and 7.5% respectively, resulting in 19 million and 57 million bbl/day total demand in 1975. By 1980 U.S. demand will be nearly 25 million barrels and free foreign nearly 90 million barrels per day.

The areas which will supply this demand, especially that of the United States, are quite uncertain because of the bewildering variety of political, legal and environmental factors -- as contrasted with purely economic ones -- which will be of critical influence. Therefore, it is difficult to forecast definitely the areas and the amounts and costs of exploration and development, as well as prices and earnings.

One thing is certain, however -- that there will be a growing shortage of domestic crude and an increasing dependence on foreign supplies. Both the cost and dependability of the latter are questionable in view of political considerations and the policies and actions of OPEC.

Any interruption of our foreign energy supplies would have a dramatic effect on our economy and security and would show the dangerous results of the lack of a coherent and positive energy policy.

There are very few discovered but undeveloped oil reserves in the United States except on the North Slope, and those probably cannot be made available before 1976. Though the recent NPC-AAPG study indicates almost 200 billion barrels of undiscovered but expectable recoverable U.S. reserves, any large increase in exploratory effort to find them cannot have any great effect on our crude deficit before 1978 because of the necessary lead times. It is obvious, however, that certain steps which are outlined can and should be taken immediately to encourage or to cause such an increase so that the period of danger to our economy and security will be as brief as possible.