American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

This paper was prepared for the 1974 Eastern Regional Meeting of the Society of Petroleum Engineers of AIME, to be held in Washington, D.C., Nov. 14–15, 1974. 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.

A simple, but unrealistic conclusion to draw from the existing energy shortage is that never before have so many done so much to achieve so little. With the help of the media and doomsday forecasters the good news has been overshadowed by the bad. Through the ages man has invariably, with varying degrees of success, managed to apply fresh ideas and technology to achieve his needs.

Recently we experienced results of Government intervention in the realm of supply and demand - the action taken being wage and price controls. Historically, shortages are best relieved when prices are allowed to exercise their influence on consumer habits and thus create a motivation for producers. How else can a real expression of values emerge in a realistic fashion? Perhaps some of you witnessed a recent film clip on an 11 o'clock TV news broadcast depicting Wisconsin cattlemen slaughtering calves in protest against recent feed costs coupled with an inability to achieve offsetting higher cattle prices. Taken into our own perspective, in 1954 the FPC was empowered to set artificial well head prices on interstate sales of natural gas-stimulating consumer demands, but discouraging producer incentive to promulgate continued supply in sufficient quantity. Hopefully none of us here today subscribe to the theory that government intervention in the marketplace is the panacea for a faltering system caused by an inability panacea for a faltering system caused by an inability to provide an adequate supply of a commodity at a fair price. price.

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