Domestic consumption in 1966 was 17.2 tcf of 

 dry natural gas (natural gas liquids were included 

 previously with petroleum for about 15 per cent 

 of the total energy used within the United States). 

 Unofficial information by the Bureau of Mines 

 predicts that worldwide annual consumption of 

 natural gas by the year 2000 will increase by 225 

 per cent, requiring about 1 24 tcf of gas per year. 

 These projections assume that the development of 

 cryogenic tankers for transporting liquefied natu- 

 ral gas will make it competitive in major world 

 markets. The annual domestic demand for dry 

 natural gas in the year 2000 wUl amount to more 

 than 40 tcf per year, a demand approximately two 

 and one-half times greater than in 1966. The 

 cumulative domestic demand during the 

 1966-2000 period may total 900 trillion cubic 

 feet. 



II. RESERVESOFOIL AND NATURAL GAS 



The total volume of oil or gas in any local 

 accumulation is commonly known as petroleum 

 "in place." The amount of this that can be 

 recovered depends largely on three factors: 



—Physical. The nature of the reservoir rock, the 

 type and composition of the petroleum, and the 

 source of pressures within the reservoir; 



—Technologic. The engineering techniques avail- 

 able for drilling and producing the petroleum 

 under a variety of adverse conditions; 



—Economic. The cost of exploring, drilling, pro- 

 ducing, and transporting the petroleum as com- 

 pared with its value or market price. 



The volume of recoverable petroleum in any 

 reservoir, subject to all these conditions at any 

 particular time, is known as the "recoverable 

 reserves," or simply the "reserves. " Thus, reserves 

 represent a working inventory of petroleum which 

 changes with time, technology, and economic 

 conditions. 



Obviously the volume of oil or gas already 

 recovered from a reservoir is the most accurately 

 known component of the eventual total oil re- 

 covery. Some of the reserves remaining in the 

 ground can be estimated fairly accurately by data 

 from drilled wells; these are considered to be 



"proved reserves. " Less accurate are estimates of 

 recoverable reserves in undrUled parts of the 

 reservoir and added reserves that might become 

 available by improved recovery techniques that 

 have not yet been tried; these are known as 

 "prospective reserves." The least accurate esti- 

 mates are of reserves in accumulations that have 

 not yet been found or reserves that might be 

 recoverable with some future technology. These 

 are "speculative reserves," and obviously they are 

 most speculative in regions where there has been 

 no driUing. 



The uncertainties of insufficient knowledge and 

 changing economic and technologic conditions will 

 always be with us. Neither a final inventory nor a 

 firm forecast of ultimate production is possible. 

 Estimates by various speciaUsts vary greatly, espe- 

 cially in the categories of prospective and specula- 

 tive reserves. The total world production and the 

 proved reserves remaining at the close of 1967 are 

 shown in Table 5. 



At the present time the free world has adequate 

 proved reserves to supply its needs in petroleum 

 for about 36 years at the present rate of consump- 

 tion. The proved reserves in North America are 

 about 11 times greater than present annual pro- 

 duction. The Arab nations in the Middle East and 

 North Africa have about 75 per cent of the free 

 world's proved reserves; and while North America 

 consumes about 45 per cent of the free world's 

 petroleum production, it has only about 13 per 

 cent of the proved reserves (Table 5). 



A. Supply Prospects from Domestic Sources 



McKelvey^ has recently summarized various 

 reserve estimates for petroleum and natural gas in 

 the United States. The tabulations suggest gener- 

 ally that at the close of 1966 the United States 

 had about 34 billion barrels of proved petroleimi 

 reserves, and 7 to 17 billion prospective barrels 

 that might be obtained by improved recovery 

 techniques. An additional 20 to 40 billion barrels 

 of speculative reserves might be recovered by 

 future technologic advances or more favorable 

 economic conditions (Table 6). Estimates of 

 speculative undiscovered reserves are rare and their 



^V. E. McKelvey, Contradictions in Energy Resource 

 Estimates, Seventh Biennial Gas Dynamics Symposium 

 (Northwestern Univ. preprint., 1967). 



VII-194 



