Ryan, J.M., Humble Oil and Refining Co., Houston, Tex.
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This paper is to be presented at the 38th Annual Fall Meeting of the Society of Petroleum Engineers of AIME in New Orleans, La., on October 6–9, 1963, and is considered the property of the Society of Petroleum Engineers. Permission to publish is hereby restricted to an abstract of not more than 300 words, with no illustrations, unless the paper is specifically released to the press by the Editor of the JOURNAL OF PETROLEUM TECHNOLOGY or the Executive Secretary. Such abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or SOCIETY OF PETROLEUM ENGINEERS JOURNAL is granted on request, providing proper credit is given that publication and the original presentation of the paper.
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The resources of each of the major fuels are probably adequate to meet domestic requirements for at least the next 15 or 20 years. During this period interfuel competition will tend to keep delivered prices of these fuels roughly equivalent in certain major consuming markets. These delivered prices coupled with transportation charges will determine which resources will be exploited in what degree. Transportation charges are fairly flexible in the case of coal and gas, and will be adjusted within certain limits to permit these fuels to maintain their markets. Each of the fuels industries will attempt to improve its share of the market, and an analysis of present market shares and components of delivered cost suggests in which areas each is likely to concentrate its future efforts. Government policies will have an important but indeterminate effect on the future competitive balance.
The future competitive situation In the fuels and energy industries will be the resultant of a complex array of interacting and mutually dependent forces. The purpose of this paper is to examine some of the more important of these forces and to indicate the areas in which significant changes are most likely to occur in the foreseeable future.
The availability of resources is a central factor in any discussion of the future competitive fuel situation. In this area it is necessary to adopt a reasonable time horizon, however, as so little is known with certainty about ultimate recoveries and future costs. Equally well-informed experts have widely varying views on this subject. In the case of crude oil, for example, recent estimates of availability have ranged from as low as 150 billion barrels to as high as 590 billion. With only a few exceptions, however, most students of the subject would agree that the resources of each of the major fuels are adequate to meet requirements for the next 15 or 20 years with no significant change in relative prices at point of consumption. This area of agreement provides an adequate time horizon for planning purposes today since it corresponds roughly with the planning period for typical investment decisions and since events in the more distant future are so remote and the uncertainties surrounding them so great that it would be unwise to predicate action on them today.
