It is a logical starting point for establishing a new set of policy criteria for such government intervention in the market. New criteria are also needed for other instances of existing or proposed government intervention in the market through restriction of imports. The Anti-Trust Subcommittee would be limiting its vision unnecessarily and unrealistically if it completely confined its attention to the administrative inequities and inadequacies of the oil import control program, and with the need for such controls. RAISING OUR POLICY SIGHTS The time has come-it has long since passed-for the United States to articulate a credible, coherent, constructive trade policy-one that helps move the country forward to the most efficient utilization of its resources, the most effective cooperation with our friends around the world, and in other ways toward the most enlightened and effective form of national security. The time has come for Congress to show the nation and the world that "freer trade" must mean genuinely and consistently freer trade-indeed meaningful progress toward free trade itself and that the domestic economic problems that this may cause or aggravate must be met to the greatest possible extent by constructive domestic policy remedies, to the extent that government assistance is necessary at all. There are too many Senators and Congressmen not yet alert to these tradepolicy imperatives, still too politically prone to urge more, not less, government interference in the market. I dare say that some of the support declared for removing the oil import quotas suggests motivations that fall somewhat short of the deepest concern with the overall national interest and contain disproportionate concern with the goring of particular oxes in which these economic interests and legislators have a parochial stake. One example is the appearance in these hearings of chemical companies (industrial consumers of petroleum) protesting their lack of full and free access to petroleum at world prices, the raw material prices enjoyed by their competitors in other countries. American industry should not be burdened with raw material and fuel policies that tend to place it at a competitive disadvantage in an increasingly competitive world. It is somewhat disconcerting, however, to find that many of these same chemical companies, opposing government interference in the oil market, favor government interference in the chemical market. They have fought tooth and nail to keep the "American selling price" method of customs valuation on benzenoid chemicals. It is an extraordinary import restriction which Congress has by legislation accorded to no other industry. The original basis was national security, in the wake of the experience of World War I. A fledgling "coal tar" chemical industry needed special assistance. That was nearly half a century ago. The industry has grown to impressive maturity, but still insists it cannot safely be weaned from ASP. In its concern with government interference in the oil market, the Anti-Trust Subcommittee has a unique opportunity to raise the sights of the Congress, American industry and agriculture, and the entire country to the trade-policy goals so urgently needed. It has a unique opportunity to educate the Administration as well-not only on the characteristics of a soundly based oil policy but on the elements of soundly based government attention to whatever traderelated problems beset any sector of our economy. This may at least slow our national slippage into deeper protectionism, while we await a national determination to move definitively forward toward genuinely, consistently, and dependably freer trade. shore in every area of the world, dipping beyond the Continental Shelf into water depths of 4,000 to 6,000 ft and invading the Arctic wastes. • Drilling operations also will show substantial increases. This will force operators to buy new tools to replace much of the equipment that is beginning to show wear. It will force improvements in equipment to meet new challenges, and it will force the drilling industry to face up to its shortage of skilled manpower. • Production practices will highlight two developments, subsea operations and renewed interest in thermal recovery. ● Refining will produce a big building boom. New capacity must be added at the rate of 610,000 bbl each year of the decade to meet demand. Older plants also must be modernized constantly. These needs mean that 3,000,000 b/d of refinery construction must be under way at all times in the next 10 years. • Pipelining will be affected by the unparalleled construction and operating demands imposed by the North Slope. It all adds up to a decade of more surprises, more crises, and more opportunities for the oil industry. The staggering task given the industry becomes clearer when two sets of statistics are considered. In all petroleum history, the industry worldwide has produced by the end of 1969 a grand total of about 225 billion Consumption of natural gas will increase from the equiva lent of 15.18 million b/d in 1968 to 28.75 million b/d in 1980 when it will furnish 18.1% of world energy use. The question naturally arises, "Can the world industry supply these tremendous petroleum demands?" The answer is an optimistic "Yes." Let's examine the basis for this optimism. Proved recoverable reserves of crude oil are now estimated at about 473 billion bbl worldwide. Since its birth, the industry has produced about 225 billion bbl or less than half the present reserve. Experience shows that at this point known techniques are recovering on the average, about 30% of the oil in place. The 70% of oil in place that remains unrecovered will be a prime target of research in the years ahead. New methods of well completion, new secondary and tertiary production techniques now unknown will reduce that 70% to a range of 55-60%. probably over the next decade. Thus, despite continually growing production and demand for oil, world recoverable reserves will climb upward, aided of course, by new discoveries through the years. Take the United States for example. The American Petroleum Institute estimates recoverable reserves here at 31 billion bbl, all of which the industry expects to recover. Since the industry already has produced another 89 billion bbl, the total recoverable proved figure will stand at 120 billion bbl. If this 120 billion bbl is accepted as the average 30% recovery, then another 70%, or 280 billion bbl remains as a target for U.S. oilmen to retrieve through improved methods and techniques of recovery. If the industry Where will the energy come from in 1980? COAL 21% |