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15ARRING A REVERSAL of present trends
in petroleum production and consumption, U. S. producers are going to find it increasingly difficult to keep up with demand over the next 1 0 to 2 0 years, says Albert L. Nickerson, president of Socony Mobil. Speaking before the Texas Mid-Continent Oil & Gas Association, Nickerson said that while it is always difficult to read future needs with accuracy " . . . as we see it at this moment the next 10 to 2 0 years are likely to be years of steadily increasing demand." Noting that consumption of liquid hydrocarbons in this country last year amounted to about 7.8 million barrels a day, he predicts that this year's figure would be 8.3 million barrels—an increase of
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more than 7%. By 1960, h e estimates, consumption should rise to 9.7 million barrels; in 1965 to 10.7 million, and in 1975 to 12.3 million. This demand forecast indicates that 10 years from now, with nuclear energy still a fledgling commercially, w e shall need in the United States 3 million more barrels daily of liquid hydrocarbons than we did last year. Twenty years from now, when nuclear energy is expected to b e a more important U. S. oil demand may reach 12.3 million barrels a day by 1975 . . . Nickerson
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contributor to the total energy supply, economists estimate that nearly 4.5 million barrels daily more than last year will be required. This increase alone is well over half of last year's consumption. • Demand = Reserves. Adding up the demand expected for the 10-year period, 1956-1965, alone, he says: "The total comes to nearly 36 billion barrels. This figure corresponds almost exactly to this country's present proved reserves." Even though it is misleading to say that "we're running out of oil," he says . . . "we all know that it's getting harder and more expensive to build up our reserves. This is true not only because oil is becoming harder to find but because our need for it is increasing so rapidly." This situation exists, says Nickerson, in spite of a drilling program since the end of World War II which has been the biggest in the industry's history and in spite of the fact that over the five-year period, 1950-54, the industry has "proved" reserves at a rate aver-. aging 3.76 billion barrels each year. Even the 2 million barrels-a-day reserve producing capacity which has been built u p by the high drilling rate should not b e misunderstood, since it
New Text probably does not accurately measure our ability to produce for any period longer than a few months." H e noted that the annual rate of production in the U. S. has never significantly exceeded 8% of reserves even at maximum efiBcient rates of production, and continued: • Last year the industry produced 2.56 billion barrels of oil and natural gas liquids in the United States. • Eight per cent of our reserves would be 2.78 billion barrels. • The difference between these two figures is 220 milHon barrels, or 600,000 barrels a day. "This may represent the country's approximate reserve producing capacity at maximum efiBcient rate over any sustained period, and may be a more realistic figure of a dependable reserve productivity than the 2 million barrel figure so often referred to," indicated Nickerson. • "Prove" 4.1 Billion. Assuming petroleum is imported for the next 10 years at the rates recommended by the Cabinet committee appointed by President Eisenhower and that production continues at the average rate of
S°/c of proved reserves, he says, "We would then need to prove an average of 4.1 billion barrels a year over the decade in order to meet domestic demands forecast for those years." While there are many imponderables ahead, he indicates, and conditions may differ substantially from what is now expected: "These may well be the approximate dimensions of the job ahead for our industry in this country . . . If the industry continues to be confronted with economic conditions similar to those w e have with us today, its justly earned reputation for ingenuity, continued technological advancement, and tireless hard work will be put to still further tests to provide adequate petroleum supplies for all expected requirements/* JTlRST YEAR OF NATURAL GAS production under federal control has already resulted in dwindling supplies, says John W. Boatwright, Standard Oil (Indiana). Speaking to Texas MidContinent Oil & Gas Association, Boatwright cited "accumlating proof" that: • N e w commitments of natural gas to interstate pipeline carriers are falling off sharply.
• JFewer gas wells are being drilled. • Funds for natural gas development are drying up. In 1952, he says, n e w gas reserves conintiitted to 11 large pipelines came to 5.3 trillion cubic feet. In 1953, it was 6.4 trillion cubic feet. But in 1954—the first year that t h e shadows of government control fell across the industry—new* commitments were only 2.3 tsrillion cubic feet. That was just slightly more than a third of the 1853 figure. Since these 11 lines moved approximately 4 trillion cubic feet in interstate commerce, he adds, it's obvious they liad to draw on their reserve bank accounts of gas. • N of Trying. Gas well completions are on the downgrade, says Boatwright, runntng 12
