News of the Week
OPTIMISM EMERGING IN U.S. ENERGY OUTLOOK In the volatile realm where energy predictions are made, yesterday's pessimistic rumblings seem to be giving way to a determined, if occasionally grudging, optimism about the U.S.'s energy future. The latest major example of the trend is a report produced by the American Petroleum Institute, "Two Energy Futures: A National Choice for the 80s." Although the report is presented as a kind of challenge to energy decision makers in the U.S., it overlaps considerably with other recent reports and statements from a wide range of sources, including oil company officials and the Department of Energy. The overall message is that the U.S. ought to be in good shape by 1990 regarding its broad program of developing largely independent energy resources. The API report takes issue with what it calls "the gloomy outlook of most current forecasts." Yet the problem may be that API misjudges everyone else's temper. "I don't see that much that's different [in the API report] from current federal policies," says a DOE spokesman. "I wouldn't say we're pessimistic—we're fairly positive that the U.S. is energy rich, not energy poor." Thus, there may be an unrecognized consensus that the U.S. can be out of trouble by 1990. In the shorter run, say the next five years, the con-
API sees alternative U.S. energy future achievable Millions of bbl per day of oil equivalent
Crude oil/natural gas liquids Natural gas Coalb Nuclear Shale oil Renewablesd Consumption Oil imports
1979
Current 1990 forecasts 8
1990 API alternative
10.2
6.1-10.4
9-10
9.1 7.2 1.3 0 1.5 36.8e 8.2
6.1-10.2 8- 9 11.3-14.0 14.5-15.5C 4- 4.5 3.1- 4.2 0.2- 0.3 0.4- 0.6 2- 2.5 1.6- 2.0 42.0-47.8 42-46 4- 5 7.5-11.3
a Range of recently published forecasts, b Excluding exports of 800,000 to 1 million bbl per day of oil equivalent, c Includes 100,000 to 300,000 bbl per day of oil equivalent liquid synthetics; 300,000 to 800,000 bbl per day of oil equivalent gas. Total synthetics from coal, oil shale, and biomass are 1.0 million to 1.5 million bbl per day of oil equivalent, d Includes hydroelectric, solar, geothermal, and biomass. e Production plus imports does not equal consumption because of changes in stock levels and inclusion of product imports and natural gas liquids by volume, as commonly reported, rather than as crude oil equivalent. Source: American Petroleum Institute
10
C&EN Aug. 25, 1980
ditions that have prompted ''gloomy outlooks" in some circles could prevail, but more for the reason that it will take that time to develop new programs. But already the movement to institute new energy sources is under way, according to DOE. There has been a tremendous response, for instance, to the new synthetic fuels program. Moreover, the tempo has picked up recently for domestic oil explorations. And on the consumer side, energy use has dropped appreciably. Nonetheless, the API report has a viewpoint to get across, albeit one that tries to one-up everyone else in enthusiasm. The viewpoint is predicated on the notion that political decisions—and not technology or economics—now stand in the path blocking a quick run to energy independence for the U.S. "The U.S. has the resources to face a bright energy future—if appropriate decision are made soon," the report says. "The nation, through its political process, may reject any or all of the energy opportunities it has. But the opportunities for significant change exist." Those opportunities involve making changes in current environmental law, moving ahead with development of coal and nuclear energy programs, deriving more energy from federal lands, and increasing reliance on the market system. Many of these specific points are in closer agreement to DOE policies than the API report suggests. However, perhaps one of the touchier areas revolves around environmental issues. Here the API report calls for substantial changes without getting too specific. "We can continue to produce oil and natural gas, produce more coal and begin to produce synthetic fuels—and still enjoy a cleaner environment in 1990," the report claims. "Without weakening the nation's environmental objectives, an environmental/energy balance can be achieved through more flexible government actions" (emphasis added). API's main point is that environmental laws, particularly the dozen or more statutes enacted during the past decade, have "commendable goals but restrictive provisions." Clearly, this is the crux of the
problem now, as it has been. And it promises to pit environmental activists, who are skeptical about loosening standards and thereby undermining hard-won legal progress, against their familiar foes—energy producers whose views on environmental and safety risks traditionally have differed considerably from those of environmental activists. If those two groups really can work out some middle path, then API's projected goal of reducing U.S. dependence on imported oil and gas 50% during the next decade may be realized. The API report is available (free for the first 10 copies; $2.50 per copy beyond 10) from: Publication & Distribution Section, American Petroleum Institute, 2101 L St., N.W., Washington, D.C.20037.
Genetic engineering firm to go public After building itself up to a profitable status since 1976, largely through contract payments and investment from private companies, Genentech, one of the four U.S. developers of commercial gene splicing (recombinant DNA) technology, plans to go public. The South San Francisco, Calif., company has filed with the Securities & Exchange Commission a registration statement for a proposed initial public financing by one of the major independent U.S. gene-splicing developers. The offering price will be between $25 and $30 per share, the preliminary prospectus says. Hence, the proceeds will more than triple the firm's current capitalization of $11.3 million, most of which is accounted for by $10 million from Lubrizol in September 1979. For its investment, Lubrizol received equity now converted into 1 million shares of stock, whose worth would rise handsomely with the proposed stock offering. The offering also would make instant paper millionaires of four other major stockholders: founder Robert A. Swanson (chemist-manager), founder Herbert W. Boyer (biochemist), the venture capital firm of Kleiner & Perkins of San Francisco,
