How are we to meet the nation's galloping demands for more oil? The current "game plan" of the oil industry, as reflected in the National Petroleum Council reports, proposes these stratagems to make possible "dramatic increases in domestic production":
An increase of the oil depletion allowance.
Liberal new tax incentives for oil drilling and exploration.
Federal deregulation of controls over the price consumers pay for natural gas (to encourage new exploration).
Quick access—through expansive new Interior Department leasing programs—to the oil deposits below the Atlantic coastal shelf.
Aggressive development of Alaska's oil resources.
In my opinion, it is unrealistic to assume that any of these proposals could be put into effect in time to avert the energy crunch. Political signs point to a further reduction of the oil depletion allowance, and the tax incentive and gas deregulation proposals would certainly arouse a vigorous debate in Congress. When Secretary Morton proposed oil leasing on the Atlantic shelf last summer, every governor from Maine to Maryland (with a supporting chorus of sixty congressmen) stated opposition to such a move. As for Alaska, anyone familiar with the raging dispute over the Alaska pipeline knows that full-throttle oil exploitation in that state faces formidable environmental arguments. And Governor William Egan has warned that construction of oil rigs in the Gulf of Alaska will face physical obstacles more severe than those of any other continental shelf in the world.
To be sure, new oil provinces await discovery. But the days of cheap wildcatting are over (as all the oilmen already know), and the environmental risks and economic costs of tapping increasingly hard-to-reach deposits will be great.
It is disturbing to find that the oilmen have consistently ignored the one U.S. petroleum expert who has unerringly forecast the curve of our domestic production. M. King Hubbert, a former petroleum geologist for Shell Oil Company, is now a senior professional with the U.S. Geological Survey. More than a decade ago, his scientific calculations led him to forecast that our domestic production (excluding, admittedly, then unknown Alaskan deposits) would reach its ultimate peak in the early 1970s. This estimate has now been validated by events. Hubbert estimates that the oil fields already identified in the contiguous forty-eight states—including the continental shelves—probably represent 68 to 85 percent of the total U.S. reserves that will ever be discovered, and he is convinced that, at best, Alaskan production will not come on stream in sufficient quantities to increase the total annual output of U.S. oil fields.
Hubbert's projections over the past sixteen years have been remarkably accurate. His method of evaluating drilling statistics make him neither an optimist nor a pessimist. Today, however, other geologists have come up with estimates far more expansive than those of Hubbert (and of the conservative analysts who share his approach to petroleum forecasting). For example, while Hubbert doubts that the unexplored Atlantic shelf will ultimately yield as much as ten billion barrels of oil, a few "boomer geologists" have glibly predicted that it will provide us with 169 billion barrels.