1 . 1 PETROLEUM DEMANDS AND RESOURCES 



It is widely accepted that the major source of domestic energy 

 during the next quarter of a century will be oil and gas. New energy 

 sources appear too expensive and pollution prone to meet a significant 

 portion of domestic energy needs at present despite the efforts made to 

 develop them. An era characterized by abundant and cheap energy has 

 ended, and the world is undergoing a painful readjustment characterized 

 by increasing demand and reduced supplies of energy. 



This section presents the overall national demand for energy supply 

 and the anticipated role of oil and gas in meeting these demands through 

 the year 2000. The amount of petroleum resources--and domestic 

 production--are now declining, especially onshore. This has led to a 

 larger share of production for offshore oil and gas. Worldwide, the 

 increased demand and decreased supply in the United States has led to 

 dramatic shifts in resources and production from the Western Hemisphere 

 to the Eastern--especially the Middle East. 



Since the first commercial oil well was drilled in Pennsylvania in 

 1859, petroleum has been a significant factor in our nation's growth and 

 development. Oil did not replace coal as the primary U.S. energy source 

 until the 1940' s, but even before that, it was a critical commodity and 

 played a vital role in national changes in lifestyle. In the past 30 

 years, the value of petroleum has spread far beyond fuels. It has 

 become a required ingredient for a broad range of standard commodities 

 from drugs to plastics and synthetic fibers. 



