52 THE FIVE-YEAR OUTLOOK 



lion's policy proceeds from the assumption that the market 

 is best suited to sort out most development options, and 

 that Federal support should be limited to those potentially 

 high-payoff options where the private sector is as yet 

 unable to invest sufficient development funds. Thus, 

 many potentially promising programs that previously re- 

 ceived Federal subsidies have been curtailed or discon- 

 tinued, and additional reductions in Federal development 

 support during the next 5 years are likely (NRC-14; 

 ENERGY). 



Some of the major contributions that energy-related 

 science and technology programs in the public and private 

 sectors are expected to make during the next 5 years, and 

 some of the problems associated with those programs, are 

 highlighted below. 



OIL AND NATURAL GAS PRODUCTION 



Until economically competitive fuel sources are de- 

 veloped to supplement declining domestic reserves, ex- 

 ploration for new petroleum and natural gas resources 

 accessible to the United States and the development of 

 methods to enhance the recovery of oil and gas from 

 known sources must be pursued. Administration actions 

 to decontrol oil prices and to stimulate the investment 

 climate through regulatory and tax reforms are expected to 

 provide the necessary market conditions for these ac- 

 tivities (ENERGY). 



PETROLEUM PRODUCTION 



Petroleum production in the United States has recently 

 stabilized. If the United States were to sustain present 

 levels of oil production, approximately 4 billion addi- 

 tional barrels would have to be located annually. However, 

 there was only one year since 1950 during which more 

 than 3 billion barrels of reserves were discovered. There is 

 considerable disagreement about the probability of dis- 

 covering new large or giant oil fields, but little disagree- 

 ment about the fact that if such basins exist they are most 

 likely to be in locations with harsh environments that will 

 make exploration and commercial development difficult 

 and expensive. For example, although the Outer 

 Continental Shelf in the Alaskan north slope is a key 

 location where large fields are being sought, environmen- 

 tal concerns and operating difficulties have slowed explo- 

 ration and development and raised costs. Ocean beds also 

 constitute another important potential source of pe- 

 troleum. During the next 5 years, industry is expected to 

 improve the technology for offshore exploration and drill- 

 ing operations to minimize the chances for spillages, 

 blowouts, loss-of-well control, fires, or other occurrences 

 that may damage the environment or endanger life 

 (ENERGY). 



Advanced enhanced recovery techniques could lead to 

 increased commercial production of petroleum from 

 known domestic reserves. While the technological mech- 

 anisms of several enhanced recovery techniques are well 

 understood, it is as yet difficult to predict whether they 

 will be workable or profitable in any given reservoir. 

 During the next 5 years, field tests, supported by laborato- 

 ry investigations, will be carried out by industry in an 

 attempt to improve these techniques. These tests should 

 also permit a better assessment of both the economics and 

 the environmental impacts of enhanced recovery 

 (ENERGY). 



NATURAL GAS 



The Department of Energy estimates that domestic levels 

 of natural gas from known, presently proven sources in the 

 lower 48 States can be maintained only through the pres- 

 ent decade. Deep well recovery could, however, sustain 

 production levels well beyond that date. The prospects for 

 discovering new reserves and exploiting known, uncon- 

 ventional reserves of domestic natural gas are considered 

 good, and supplies from the lower 48 States can be aug- 

 mented by Alaskan, Canadian, and Mexican reserves. 

 Thus, while available and potential natural gas supplies 

 are finite, they are not likely to be depleted as rapidly as 

 oil — and could therefore serve as a substitute in some 

 applications (ENERGY). 



Since considerable natural gas reserves exist outside of 

 North America, means for facilitating transoceanic ship- 

 ment are also being studied. One possibility under active 

 consideration would be to convert natural gas to meth- 

 anol, which remains a liquid under normal temperatures 

 and pressures. Another somewhat more controversial op- 

 tion would be to transport natural gas as a compressed, 

 refrigerated liquid. Unfortunately, liquefied natural gas is 

 highly flammable. The Department of Transportation has 

 recently issued safety regulations for the transportation of 

 liquefied natural gas that could mitigate this safety prob- 

 lem. However, the commercial feasibility of importing 

 natural gas in any form is likely to depend primarily 

 upon pricing decisions made by exporting countries 

 (ENERGY). 



UNCONVENTIONAL SOURCES OF OIL 



Although the world's economically recoverable sources of 

 petroleum are being depleted, the existence of vast uncon- 

 ventional sources has been known for some time, and 

 more of these sources might well be discovered. Presently 

 identified unconventional sources include giant deposits 

 of heavy oils and tar sands in Canada, Venezuela, and in 

 the U.S.S.R., and somewhat smaller though still consid- 

 erable heavy oil and tar sand deposits in the United States 

 and Madagascar These deposits have not been exploited 

 because the price of petroleum has heretofore precluded 



