Papers - - Petroleum Economics - Related Trends in Future Domestic and Foreign Petroleum Operations (TP 2048, Petr. Tech., July 1946)

Petroleum requirements since V-J day have been appreciably higher than predicted. Foreign operations now exceed maximum wartime levels by about 14 per cent. Domestic operations since V-J day have averaged 92 Per cent of the wartime peak. In spite of maximum foreign refinery runs, large exports of all products, except residual fuel oil, are necessary to meet foreign demand. During the next few years it is expected that foreign operations will continue at capacity, including new installations, but that, because of increases in foreign demand, exports will continue at about their present level. Domestic operations will increase during this period and crude production probably will exceed maximum efficient rates. Even after 10 years some exports probably will be required, but eventually these will be supplanted by increased output of foreign refineries, except for small tributary exports. The increase in domestic requirements will exceed the decline in exports. Unless findings of crude oil exceed present expectations, the increasing demand will be met by increased imports and synthetic methods-—such as the Hydrocarbon Synthesis Process for conversion of natural gas and coal to gasoline and distillates. Catalytic cracking installations will increase as crude availability decreases. This will help to meet the increasing demand for gasoline but will intensify the domestic shortage of residual fuel oil. Eventually larger imports will be required to satisfy the demand for this product. Introduction Under the pressure of the wartime period, there was time only occasionaly to look ahead in anticipation of what the postwar era held for the petroleum industry. Perhaps the general expectation was that a rather pronounced decline in the level of industry petroleum operations would take place shortly after the end of the war, with the impact felt mainly on the economy of the United States- It is of interest now, nine months after V-J day, to take inventory of the near-term situation and see what significant forces are at work. With this as a starting point, it should be possible to engage in something more satisfactory than pure speculation concerning trends in the immediate future and 10 to 20 years ahead. Present and Near-term Situation During the nine-month period following V-J day, foreign crude oil production and rebery operations have actually increased the These activities were at maximum capacity on V-J day but the continuation of drilling programs, the completion of new and rehabilitated refineries and of transportation facilities during the Past nine months have increased the foreign capacity. This added capacity has been fully utilized. Foreign crude oil production in May 1946 is about 14 per cent higher than during July 1945 and refining operations some 12 per cent higher' During the same period there has been a falling off in similar activities within the