Energy in Transition, 1985-2010 Final Report of the Committee on Nuclear and Alternative Energy Systems (1980) / Chapter Skim
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3 Oil and Gas Supply
3 Oil and Gas Supply
Pages 128-145
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From page 128... ...
This rapidly accelerated the growth of oil imports, threatening the nation's economic and political security and also placing stresses on world oil markets that had political, financial, and economic implications in all the countries of the world. As we shall show further in this chapter, the likelihood of reversing the slow decline in domestic oil and natural gas production is quite small, and the prospect of compensating for this decline by continued growth of oil imports is equally small, at least beyond a few years in the future.
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From page 129... ...
Given the probability that world oil production will peak in the 1990s and decline gradually thereafter, it is thus extremely unlikely that the United States will be able to offset its declining domestic production of fluid fuels by increasing its share of world imports. Instead, political and economic pressures on the United States to decrease its share of imports will steadily mount.
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From page 130... ...
Location Crude Oil' Natural Gas Total Resources United Statesb 667 716 1,383 Other market economies 6 412 3.975 10,387 Centrally planned economies 2,760 2,881 5.641 Total world 9.839 7.572 17,411 Resertes United Statest 201 221 422 Other market economies 3,122 1.225 4,347 Centrally planned economies 619 841 1.460 Total world 3,942 2,287 6,229 'Includes natural gas liquids. bSource: U.S.
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From page 131... ...
The Supply and Delivery Panel, concluding that oil and gas producibility depend more on institutional variables than on price, did not attempt to derive pnce-versussupply curves for oil and gas, but instead focused on financial, institutional, environmental, and regulatory constraints on production.3 it described three scenarios, based on three postulated sets of assumptions about the climate for development. These scenarios reflect the judgments of a body of experts on the potential of oil and gas production under various conditions.
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From page 132... ...
Moderately Enhanced Conditions Scenario This scenario projects oil and gas production under a set of assumed government incentives. The assumptions are the following.
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From page 133... ...
TABLE 3 2 Estimated Production of Domestic Oil and Natural Gas Under the Conditions Assumed in the Supply Scenarios (quads) Year Present Moderately National Conditions Enhanced Conditions Commitment Oil 1975 20 20 20 1985 18 21 21 1990 16 20 21 2000 12 18 20 2010 6 16 18 Gas 1975 19 7 19.7 19.
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From page 134... ...
Beyond 1985, the deficit between domestic oil production and consumption will depend heavily on government policy with respect to supply, demand, and price. For example, by 2010 the need for oil imports would be very small if liquid fuel demand were held to 20 30 quads by the higher energy prices and the conservation policies assumed in the low-growth demand scenarios (chapters 2 and 11)
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From page 135... ...
Supply and Delivery Panel estimates of future world production suggest that even this middle case would entail a U.S. demand for a larger percentage share of the world oil supply than at present; this would intensify the already great pressures on consuming countries less able than the United States to pay the resulting higher prices.
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From page 136... ...
Thus, the margin of excess capacity, under even the most optimistic assumptions about future world oil demand, will be thin indeed—and perhaps nonexistent.' Could the World Oil Situation Improve? The preceding discussion has emphasized the unfavorable side of the world oil outlook.
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From page 137... ...
The least to be learned from this experience is that we do not know enough about the future to direct policies at the most visible threat only. (In the unlikely event of a decline in the world oil price, the question of protection would no doubt come up again; the more highcost energy sources are developed in the meantime, the more insistent would the calls for protection be.)
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From page 138... ...
In addition to these financial strains, a tight supply situation would increase the threat and the potential effectiveness of politically motivated supply interruptions. While oil imports will be important to this country for some time to come, national energy policy must take account of these international stresses.
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From page 139... ...
According to the Supply and Delivery Paneli° it is quite modest—a maximum of 3 quads annually by 2010 even under nationalcommitment conditions. COAL-DERIVED SYNTHETIC LIQUID FUELS Coal can be converted into liquid and gaseous fuels comparable to those in common use today.
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From page 140... ...
For a more complete treatment of the technology and risks of coal conversion, see chapters 4 and 9. PROJECTIONS OF TOTAL DOMESTIC LIQUID FUEL PRODUCTION Table 3-3 summarizes the Supply and Delivery Panel's estimates of domestic production of all liquid fuels, both natural and synthetic, under the conditions of the three supply scenarios.
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From page 141... ...
Table 3-4 lists projections of the availability of domestic and imported natural gas and of synthetics from coal, under the varying assumptions of the Supply and Delivery Panel's three supply scenarios. In the business-asusual scenario, supply would be curtailed in the intermediate term, largely because of the time it would take to build up a synthetic gas industry..
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From page 142... ...
.' 0.2 2.5 5.2 5.2 Synthetic gas Irom cmdb 0 0.5 3 5 4.8 TOlAU 19.9 19.1 23.7 24.0 National commitment Domestic natural gas 19.7 18.5 17.0 16.0 Imported natural gas' 0.2 2.7 7.4 7.4 Synthetic gas from coult 0 0.7 4 5 7.9 TOTAL 19.9 21.9 28.9 31.3 'Includes gas from Canada plus liquehed petroleum gas and liquched natural gas from other nations. t Does not include low Btu synthetic gas.
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From page 143... ...
The technology is unfamiliar and untried on the requisite scale, and the rate at which these problems can be understood and controlled will largely determine the rate of development of a coal conversion industry. THE OUTLOOK FOR OIL AND GAS IN THE INTERMEDIATE TERM The analyses underlying this chapter suggest on balance that domestic supplies of liquid and gaseous fuels will decline further while demand continues to increase.
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From page 144... ...
However, even those members of CONAES who are convinced that the oil and natural gas era is coming to an end feel that improved domestic production is essential to permit a transition to sustainable long-term energy sources. For reasons of national security, minimizing dependence on imported oil should be accorded prominence in national energy policy comparable with other foreign policy goals related to energy, such as avoiding the proliferation of nuclear weapons.
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From page 145... ...
10. Supply and Delivery Panel, op.
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