The Future of American Oil and Natural Gas

Abstract

The transfer of undiscovered petroleum and natural gas from the resource base to inclusion in immediately available proved reserves is dependent upon a complex fabric of incentives, effort, technology and just plain luck. Unfortunately, the link between the effort which may be made in response to incentives and the results to be obtained are so tenuous that a firm answer as to future domestic supplies of oil and gas cannot be given. In the near term, United States consumption of energy should continue to be closely related to the growth in the gross national product (GNP). Environmental controls, while both discouraging and requiring the use of energy, may prove to require a net increase in energy use. On the other hand, conservation measures responding to price increases and shortages may only partially reduce the energy growth rate. For the re mainder of this decade, natural gas will decline in relative importance; an increase in nuclear power will about match this decline; and coal and water power will remain essen tially unchanged. The total contribution of oil will remain almost constant, but the share attributed to imports will increase rapidly. Beyond 1985, policy changes and competi tive forces should cause the entire pattern to begin to shift to a new configuration.