Most of our understanding of the basic geology 

 of continental margins and other marine areas has 

 resulted from the surveys made by oceanographic 

 and other academic institutions. Such studies are 

 distinct from the systematic Federal surveys dis- 

 cussed above, since they are devoted normally to 

 solving specific problems in marine geology. 



Recommenda tion : 



The marine geological and geophysical surveys and 

 scientific studies historically conducted by ocean- 

 ographic and other academic institutions should 

 continue to be actively supported through Federal 

 fiinding. 



I. INTRODUCTION 



A. Fossil Fuels in the U.S. and World Economy 



A recent report to the President by a special 

 interagency study group' points out that the 

 incremental cost of energy is remarkably low in 

 comparison to its value to society. In fact, the cost 

 of energy was considered to be so small that its 

 value to the economy of the United States was 

 extremely difficult to measure quantitatively. This 

 report noted that: 



the total cost of fuels and electricity is only a 

 miniscule percentage of the value added by manu- 

 facture for most major industrial groups, and for 

 only a few of them is it as much as several percent. 



This report concluded: 



The pervasive significance of energy in the national 

 economy is readily demonstrable, yet it is not 

 revealed in the statistics that ordinarily measure 

 the economy. Energy is not a large item of 

 expense for either the individual or the economy 

 as a whole. While it does not determine the cost of 

 a razor blade, an article of clothing, a piece of 

 machinery, or a house, these goods would not be 

 available at their selling prices-nor in some in- 

 stances, at any meaningful price-without an 

 ample supply of energy. In the final analysis, 

 energy is not only essential but irreplaceable. ^ 



Another measure of the relationship between 

 energy and economic well-being was also noted by 

 this same interagency panel :^ 



The United States, with the highest per-capita 

 energy consumption in the world, has also the 

 highest standard of living and the largest output of 

 goods and services as measured by the gross 

 national product. Figure [1] indicates that high 

 energy-consumption levels and high income levels 

 go hand in hand-in fact, all studies of the subject 

 find a close connection between per-capita energy 

 consumption and the standard of living. 



The United States presently consumes about 35 

 per cent of the world's production of petroleum 

 and approximately 62 per cent of the marketed 

 natural gas. By far the largest part of the domestic 

 petroleum consumption is devoted to transporta- 

 tion (54 per cent), while household and commer- 

 cial consumption would rank second (20 per cent), 

 followed by industrial uses (11 per cent). The 

 non-energy use of petroleum as a raw material 

 (petrochemicals) has already grown to about 10 

 per cent (Table 2). Most of the domestic natural 

 gas is devoted to industrial use (45 per cent), 

 which together with household and commercial 

 consumption accounts for 80 per cent of all 

 natural gas purchases in the United States. These 

 are expected to remain the major users of oil and 

 gas for at least the next 35 years (Table 3). 



The value at the well-head of all domestic 

 petroleum and natural gas produced in 1966 was 

 approximately $13 billion. During that year, U.S. 

 oil companies spent about' $15 billion throughout 

 the free world, about half of which was spent 

 domestically (including nearly $5 biUion on ex- 

 ploration and production). At these present rates 

 of expenditiure it has been estimated"* that if the 

 free world demand by 1990 will be about two and 

 one-half today's volumes, as projected, a capital 

 investment will be required over the preceding 25 

 years of about $350 biUion. The petroleum indus- 

 try requires vast amounts of investment capital 

 and in the past it has been largely self-financing, 

 but meeting these future capital requirements, 

 especially for the very expensive marine opera- 



Ali B. Cambel, Energy Research and Development 

 and National Progress (Washington, D.C.: U.S. Govern- 

 ment Printing Office, 1966), pp. 1-6. 



'^Ibid., p. 4. 



^Ibid., pp. 2-3. 



John H. Loudon, "Oil's Future To Be Fascinating,' 

 Oiland Gas Journal, June 28, 1965, pp. 71-78. 



VII-189 



