Although production rose slightly in 1991 in response to the Persian Gulf War, U.S. oil flow will resume its decline this year in downward trend that will persist at least until 2000.
The Independent Petroleum Association of America's supply/demand committee pegs crude oil production at less than 7.2 million b/d, down 2.9% from 1991 and the lowest level in 30 years. Crude oil production will continue sliding to 5.8 million b/d by 2000, the smallest volume since 1950 (OGJ, Mar. 30, Newsletter).
Meantime, the committee told New York security analysts, the growth rate in U.S. oil imports will increase to more than 5%/year during 1992-95, then slow to 2.8%/year from 1995 through 2000.
By the turn of the century, the U.S. will be importing 10.3 million b/d of crude oil and petroleum products. That will amount to 56.4% of the country's 19.236 million b/d of petroleum consumption, up 10 percentage points from 1992's import volume of 7.839 million b/d when import dependency amounted to 46.4% of total supply.
The rise in demand for motor gasoline, the U.S. petroleum industry's best selling product, will barely be perceptible. That's because of federal Corporate Average Fuel Economy requirements will offset gains in miles traveled per vehicle.
The IPAA committee forecasts 1992 consumption at 7.226 million b/d in 1992, 7.322 million b/d in 1995, and 7.342 million b/d in 2000. That makes the rate of increase only 0.4%/year in 1992-95 and 0.1%/year from 1995 through 2000.
Competition among fuels and continuing efficiency gains are likely to limit the growth in demand for all petroleum products, the committee said.
NATURAL GAS
U.S. natural gas production will increase to 20.3 tcf by 2000 for a growth rate of almost 2%/year.
Natural gas trade will increase, too, with imports rising to 2.7 tcf by 2000, an average of nearly 6%/year. U.S. natural gas exports to northern Mexico also are expected to grow.
Growth rates in gas consumption are expected to be higher in the latter half of the decade as environmentally motivated fuel switching reaches full potential in electric utility and industrial markets. In addition, some coal plants and nuclear facilities are expected to be decommissioned.
The committee based its supply assumptions on an absence of major dislocations in U.S. gas markets and the world oil arena.
It said, "For this relatively optimistic forecast to play out, current regulatory uncertainties will have to be resolved favorably, and there needs to be a rebound in drilling within the next 2-3 years."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
