A new study delays doomsday, but there is still a crisisThe visions of an imminent energy Armageddon that seemed so plausible
right after the 1973 Arab oil embargo have gradually faded, but the
serious questions remain: How much oil does the world have left? When
will it run out?Firm answers are difficult to come by; witness the Central Intelligence
Agency's forays into the slippery field of oil forecasting. In his
drive for a conservation-oriented energy program early last year,
President Carter leaned heavily on a CIA forecast for his ominous
prediction that depletion of all of the proven reserves “in the entire
world” could begin by the end of the 1980s. Now comes another CIA
report, this one prepared by Richard Nehring, a policy analyst for the
Rand Corp., which concludes that doomsday is considerably further off.At present rates of consumption, the Rand researcher says, there is
enough oil around the world that is recoverable through conventional
drilling to last for 60 to 90 years. If demand does increase and
supplies are being used up more quickly, Rand experts believe that
energy requirements could still be met through conservation measures
and the use of special techniques to squeeze more oil out of existing
reserves.The differences between the two CIA studies illustrate the difficulties
that oil forecasters face. The earlier report went wrong because it
made dubious predictions that the Soviet Union would soon become a
major oil importer, placing further strains on the world's resources.
In fact, the Russians seem more likely to add to the world's reserves
than deplete them.Since the early talk about the crunch of the 1980s, the headlines have
been full of seemingly good news about oil. Exploratory drilling
activity has risen by 30% since the 1973 embargo. In the past year or
so, oil has begun to flow from Alaska's North Slope, North Sea
production has increased, and promising indications of oil and natural
gas have been found in the Baltimore Canyon off the U.S.'s East Coast.
Oil companies have also been exploring what are thought to be big
deposits along China's coast. And in Venezuela, development is
continuing in the area known as the Orinoco Oil Belt, although the oil
is thick and heavy. New exploration is also under way in the Arctic,
Argentina, Brazil and the Sudan. In Asia, Malaysia and India may soon
join Indonesia as sizable oil producers.Discoveries in the southeast region of Mexico particularly excite U.S.
oilmen. The country has recently revised its estimates of proven
reserves* from 14 billion bbl. to 20 billion bbl., which would put it
in a league with Venezuela, and officials are happily suggesting that
the total may be as high as 200 billion bbl. If so, that would put
Mexico in a class with the present leading oil country, Saudi Arabia,
which has proven reserves in the area of 180 billion bbl.Another sanguine sign: partly because conservation efforts have had more effect than almost anyone originally
expected, the annual growth in world oil consumption has been held to
about 1% in the five years since the embargo, compared with the 5% to
7% increases in the extravagant days before. As a result, the OPEC
countries have been holding their production well below full capacity;
even so, they are preparing to end their two-year price freeze with an
increase next year.
