Emergency Energy Capacity
Authors: Bass R.M. , Essley P.L. , Webster L.D. 
Published: December 2007

This paper was prepared for the Eastern Regional Meeting of the Society of Petroleum Engineers of AIME, to be held in Pittsburgh, Pa., Nov. 7–9, 1973. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the SPE magazines.

This paper presents the preliminary results of an ongoing Government study of this nation's ability to meet possible future disruptions of its energy supplies. The potential of various methods for increasing domestic production or reducing demand is analyzed and compared with possible supply disruptions. costs of various methods to add new security reserves are presented. The study concludes that (1) the U.S. could meet short-term supply disruptions for the next few years without major economic effects, but would be unable to do so in the future unless present trends are reversed; (2) the least expensive security reserve could be obtained by storing crude oil in salt domes in the U.S. Gulf Coast; and (3) the U.S. would be unwise to rely on a standby reserve or other emergency capacity as a major element in its energy policy.

Introduction

Until 1967, the United States maintained a sufficient petroleum reserve, in the form of shut-in crude oil production capacity, to offset any potential loss of oil imports. At the potential loss of oil imports. At the present time, however, domestic present time, however, domestic production is declining, imports are production is declining, imports are soaring, and the U.S. is today without a major energy reserve cushion to fall back on during an emergency. Figure 1 illustrates the disappearance of our shut-in reserve and the potential rapid increase in imports if past trends continue.

The bulk of the world's increasing oil production must come from Arab countries. Recent statements by a number of Arab leaders suggests that such supplies might be cut off or restricted for either economic or political reasons, or both. political reasons, or both. A severe supply disruption in the late 1970's or early 1980's could, if imports are similar to the magnitude shown on Figure 1, cause a major economic depression. Severe rationing would be required and there would be shortages of fuel for industry, result ing in declining industrial output, increasing unemployment and a rapid decline in gross national product. Such economic disturbances could lead to demands for military intervention to obtain the needed energy supplies.