Natural gas touted as hidden US asset
"Home grown" oil and natural gas are about to steal back the energy spotlight in the United States. At least that is the view of a number of analysts who expect Reagan administration policies to focus on conventional forms of fuel, moving solar and other still-developing energy sources out of the limelight.
Especially encouraging are prospects for finding and developing new sources of natural gas.
Michel T. Halbouty, a geologist and independent oil producer who is the chief of President-elect Ronald Reagan's energy transition team, says that even the major oil companies have been overly pessimistic about conventional energy supplies. With the removal of all price controls on oil and natural gas, elimination of "counter-productive controls, regulations, and restraints," and easing of "environmental and conservation measures that impede maximum use of our domestic energy resources," he maintains the country can be energy self-sufficient in 15 years.
And although present natural gas reserves are put at 194 trillion cubic feet (about a nine-year supply at the current rate of use), the American Gas Association, in a 1979 study, estimated there are between 500 trillion and 1,000 trillion cubic feet of natural gas yet to be discovered in the United States.
"Petroleum is still king," Mr. Halbouty asserted at a recent meeting here of the Natural Gas Supply Association (NGSA), making clear his remarks reflected only his personal views. "It is for this reason that our government must employ every measure to encourage domestic exploration and production for oil and gas."
The exact shape of future Reagan energy policy is unclear. But both Ronald Reagan and the Republican platform, in the recent campaign, promised a new approach based on finding more petroleum resources in the United States.
"The way I see it, President Carter thought the cupboard was almost bare, [ but] Mr. Reagan feels there are covered doors that we haven't even opened containing fresh supplies of oil and gas," says Edward M. Erickson, professor of economics at North Carolina State University.
Is a more optimistic outlook on conventional energy resources justified? Authoritative studies can be cited in support of either point of view.
Recent statistics continue to paint a rather gloomy picture: The US consumed more oil and natural gas than it discovered last year, meaning the nation's total proved reserves continued to decline.
But a regional exploration manager for a major energy company raised new hope at the Houston meeting. "A few years ago the attitude was that we were running out of producible natural gas," he said. "Now, the resource base has broadened and we don't have that view anymore."
In the past natural gas discovery has been mostly a byproduct of the search for oil. Today, energy companies are exploring exclusively for natural gas, because it is selling at a much higher price and drilling has shifted to new areas considered to have greater potential. These include the Rocky Mountain overthrust belt and the deep gas basins of Louisiana, Texas, and Oklahoma.
Much of this activity is attributed to the Natural Gas Policy Act of 1978, which phases out price controls on newly discovered natural gas by the end of 1984.
Professor Erickson contends that with more rapid decontrol of natural gas prices than the 1978 law calls for, the US can begin discovering as much gas as it consumes each year by the mid-1980s. The prospects for natural gas supplies are so bright that Erickson believes the federal program to convert industrial and utility boilers to coal should be altered to allow new and existing facilities to burn gas.
"It is well established that there are significant new fields of gas that were literally unknown five years ago," says David Foster, president of the NGSA. "We don't need to be so panicky about converting to coal," he asserts.
The future recovery of potential oil and gas reserves depends on energy prices, and to what extent the country is willing to make environmental trade-offs for more rapid exploration and production, energy officials point out.