RI 4458 Synthetic Liquid Fuels-1948 Annual Rpt. Pts. 3 & 4

In 1948 the United States became a net importer of oil. Coupled with an unpre- cedented domestic production of 5,900,000 barrels daily, imports approximating 500,000 barrels made available a total supply of 6,400,000 barrels a day. Thus, by herculean effort, the oil industry was able to meet an extraordinary demand at home and, in addition, to ship abroad almost 400,00 barrels daily of petroleum and products. The country's oil position now differs greatly from that prevailing at the be- ginning of World War II. Then, actual oil production averaged about 4 million bar- rels a day, and productive capacity probably was greater than 5 million barrels a day. As the demand of the military and industrial machine grew with the rising tempo of the drive toward victory, the United States not only met its own needs but pro- duced about two-thirds of the total oil requirements of the Allied Nations, excluding Russia. As a people, we can be deeply grateful that the Nation's petroleum resources were adequate and sufficiently developed to support such a tremendous effort. Even in those critical hours when immediate needs were the paramount issues, a prudent Congress paused to contemplate the importance of an assured long-term supply of liquid fuels. From these deliberations came the Synthetic Liquid Fuels Act of 1944, which authorized research and development work on new sources of oil coal, oil shale, and agricultural and forestry products. ce World War II, a civilian demand for 6 million barrels of petroleum prod- ucts has become the order of the day every day. By drilling as many as 39,000 new wells a year, the production rate has been increased enough to meet domestic require- ments by a bare margin. Some imports were necessary, however, to fill both domestic and foreign demands, and these doubtless will increase. Is this policy of exploration within the United States and the development of oil in foreign countries adequate insurance for the fulfillment of our future national needs? This question has two aspects one purely civilian and economic in character and the other significant from the standpoint of our national defense. There are now approximately 4,000 producing oil fields in this country. At first thought, it would appear that production could decline in a considerable number of these fields without materially affecting the over-all daily output. However, 48 percent of the oil comes from only 111 major fields which contain 50 percent of the total proved domestic reserves. It is apparent, then, that the flow from large fields - having proved reserves of 100 million barrels or more each must be sustained if daily production is to be kept at the present levels. Essentially, this means that new major fields must be discovered about as rapidly or perhaps more rapidly than the older ones lose productive capacity. From 1940 through 1947, only eight major fields with estimated reserves of more than 100 million barrels each, were discovered and proved - an average of one such field a year. The total estimated reserve of these eight fields was less than 1 year's supply at the present rate of use. As drilling continues, some existing fields ultimately will prove reserves larger than those now known. Without a pronounced increase in the num- ber of major discoveries, however, the prospects for increasing our present productive level are not encouraging. Any gap that appears between domestic productive capacity and demand could be filled with supplies from proved oil resources abroad. Assuming cheap pipe-line and tanker transportation to the United States, freedom from exorbitant taxes and charges