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Oil Industry Shrinks in US But Gets No Federal Help

`DO I want to keep doing this?" That is one of the most common questions that oil industry clients worldwide ask, says consultant Joseph Stanislaw, managing partner of Cambridge Energy Research Associates (CERA).

The fact that so many in the oil business would contemplate bailing out speaks to its difficulties: overcapacity, stagnant demand, feeble prices, and ever-more-confining environmental regulations.

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In the United States, oil has shrunk more than any other industry: 450,000 jobs lost in a decade. C. J. Silas, chairman of Phillips Petroleum Company, says he can only marvel that the American public and government are willing to watch the destruction of an industry that is vital to the US economy and standard of living.

The airline industry, in contrast, received profuse promises of government assistance and cooperation from the new transportation department secretary in the name of saving jobs, says Mr. Silas, who is also the current chairman of the American Petroleum Industry.

"Maybe if we put wings on all our drilling rigs we could join the airline industry," Silas observes wryly. He says the oil industry, never the monolith outsiders perceive it to be, needs to come together to influence three choices that affect its future:

* Economic growth versus political expediency. If the gross domestic product of the US grows 2 percent through 2010, the country will need 25 percent more energy. Every time it prepares to write a tax, he says, Congress should be made to reread the fable about the goose that laid the golden egg.

* Energy development versus environmental "puritanism." Silas says a puritan is one who criticizes habits that he considers indulgent. He cautions against industry opponents who have "a hidden agenda of dictating life-style choices."

* Petroleum versus alternatives. The Clinton administration is sending mixed signals by urging greater use of natural gas but continuing to keep the oil industry out of those public lands where the chance of natural gas discoveries are greatest.

Internationally, the most significant industry event last year was the replacement of the former Soviet Union by Saudi Arabia as the largest oil producer, according to "World Oil Trends 1993," a CERA-Arthur Andersen report.

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Outside the Organization of Petroleum Exporting Countries, world oil production fell 2 percent, as declines in the former Soviet Union and the US more than offset gains elsewhere. "Oil production is being concentrated more and more in the Middle East countries," the report states. That region has 66 percent of the world's proven reserves.

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