NEW STUDY IS PESSIMISTIC ON NATION S OIL POTENTIAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00806R000200950003-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: June 30, 2010
• Sequence Number: 3
• Publication Date: April 12, 1981
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/06/30: CIA-RDP90-00806R000200950003-2
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NEW YORK TIMES
12 APRIL 1981
New- Study Is Pessinisiic
atifln's't)UI'otent~al
By DOUGLAS MARTIN _
A two-year study for the Federal Gov l compandes spend on drilling::
ernmeat has concluded that the prospects
of finding"more oiihnd gas in the United
States are severely limited. Future- dis-
coveries - will , be considerably smaller
than- most- analysts have predicted,. the
study says,: and output will. fall: faster
thanexpected::::. ; . .
These conclusions by the Rand Corpo-
ration; a_ research- group based in Santa
Monica;- Calif., . contrast sharply-with as-
sertions by Ronald Reagan in- the,Prest-
deatial campaign and with previous Gov-
ernment and industry studies.:_;
For example, the report says that as of
the eand, of 1979;121 billion barrels of oil
bad been discovered in the United States,,
and it said there-was a 50 percent prob-
ability that 20 billion more barrels would
be produced as a 'result of new discov
On the subject of natural gas potential,
eries. In contrast, six other-reports cited.
the nand study estimates there is. a 50
by the?:lRand researchers contain esti-
percent chance of finding 170 trillion
mates on new ' oil discoveries ranging
570
cubic feet of natural gas beyond discovethered.
from 55 billion to 161 billion barrels. trillion "cubic fee
t-- already
Estimates on new discoveries in the 'six
Expansion ofEabting Reservoirs
otiler?studies cited.in the report range
In addition, most analyses have re i
from 287 trillion to 1,178 trillion: cubic.
ferred optrmistically to drawing more oil feet;:
c-
from existing reservoirs. But the Rand
study theorizes that there is a 50 percent
.probability that existing reserves can be
expanded by 36 billion barrels of oil.
In his debate-with President Carter last
Oct: 29, Mr. Reagan said, "There is more
bit rsw in ihewells:that have been drilled
than has bast taken out in- the 120 years
thatt>teyl eebegtdrilled.?' ,
Altbonglr not explicitly addressing as.
=serdonssuchas that, the Rand study says
.it "is likely that more than half of the con-
-ventional petroleum reserves that will ul-
timately ? be- produced have .,been produced" ~... .. t ; ,
"The historical data do not suggest a
promising future for United States petro-
leum exploration," said. the 700-page re-
port, whichwas released today. -
The report,,; prepared for the-United
i mea States Geological Survey and the Depart-
Energy, notes that oil discoveries
have declined steadily since the 1930's
and that natural gas' discoveries have
Rmming Out of Ideas .
The reason is geology, not economics.
The report notes that most oil is found in
large pools, and it contends that On na-
tion is simply inning out of mexplored
places where there is any possibility of
finding large amounts of oil. Moreover,
the report says, this situation is not likely
toberaveraed matta'hor!nawliWend
"The petroleum Industry.ts gradually
nianing.out of ideas as to'where oil 2nd
gas niay still be found-in the United
States," the study says, "not` because-of'~:'
lack_;of. creativity and imagination, .but.::.
because of the increasing exhaustion of
geologtcalpossibilities
The Rand analysis is based an a'' t'
nation of geological and statistical analy-... y-.
sis: Richard Nehring, the"-principal au-.-'
&r of the study, said in an interview that.:. :
Rand's methodology differed from that
used in many past efforts in thatit looked
closely: at individual fields rather; than .
statistical abstractions such as the mum=:."
ber of barrels discovered for each, foot-`n_ .
drilled.
::. A 20-to.40-Year Supply?
The Rand study further postulates that
the United States can continue producing -
domestic supplies of oil for 20 to 40 years.
and natural. gas for 17 to 26 years at 1979.
rates of production. Those predictions `-:
are based or, exploration and production
costs of $40 a barrel, implying prices of
about $00a barrel.::
By contrast, Mr. NehrIng said, -"We've
found a.lot of oil and gas in this country
but we've already produced most of. it,
and nearly all of it at coats of less than $110
Mr. E!hrlng, who also was the author
or, an influenual 4~4 of world re-
ence
~ two years 5F a
mar. Ene results or e atest y were
"clearly inconsistent wr a assum
ons , o the Rea Administration's
energyp annera.
The. AdmInIstr boa's - assumptions
more nearly parallel estimates in a re-
cent study by the Heritage- Foundation
that the United States has enough oil to
last 46 to 74 years..---.-
Nonetheless. Mr. Nehring suggested
that his report could be used to reinforce
President Reagan's position that more
Federal onshore and offshore land should
be opened to exploration. '.'The best
potential for major discoveries is on Fed-
eral land,,'hesaid: -
m
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Sanitized Copy Approved for Release 2010/06/30: CIA-RDP90-00806R000200950003-2