DOE/FE/61679P-H1 Volume 1 of 2 Volumes
POTENTIAL CUMULATIVE IMPACTS OF
ENVIRONMENTAL REGULATORY
INITIATIVES ON U.S. CRUDE OIL
EXPLORATION AND PRODUCTION
VOLUME 1: SUMMARY REPORT
Prepared for:
U.S. Department of Energy
Assistant Secretary for Fossil Energy
Office of Planning and Environment
Under Contract No. DE-AC01-88FE61679 (Task 3)
DECEMBER 1990
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DOE/FE/61679P-H1 Volume 1 of 2 Volumes
Dist. Category UC-121 & 122
POTENTIAL CUMULATIVE IMPACTS OF
ENVIRONMENTAL REGULATORY
INITIATIVES ON U.S. CRUDE OIL
EXPLORATION AND PRODUCTION
VOLUME 1: SUMMARY REPORT
Performed by:
ICF Resources Incorporated
Fairfax, Virginia 22031-1207
Under Contract No. DE-AC01-88FE61679 (Task 3)
Prepared for:
U.S. Department of Energy
Assistant Secretary for Fossil Energy
Office of Planning and Environment
Washington, DC 20585
DECEMBER 1990
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FACT SHEET
U.S. Department of Energy
POTENTIAL CUMULATIVE IMPACTS OF
ENVIRONMENTAL REGULATORY INITIATIVES ON
U.S. CRUDE OIL EXPLORATION AND PRODUCTION
This report describes the cumulative effect that future environmental
regulations could have on the recovery of crude oil in the United States.
It supplements previous efforts by the Department of Energy (DOE), the
National Petroleum Council, the Interstate Oil Compact Commission, and others
to assess the influence of oil prices, taxes, technology availability and
other factors on the recovery potential of domestic oil resources. Such
efforts have been useful to State and Federal agencies in regulatory and
policy formulation, and research program planning.
Three regulatory scenarios were developed to represent a range of incremental
costs that may be incurred by the domestic oil and gas industry as a result
of future regulatory initiatives under statutes such as the Resource
Conservation and Recovery Act, the Safe Drinking Water Act, the Clean Water
Act, and the Clean Air Act.
Results
Initial compliance costs for the three regulatory scenarios ranged from $15
to 79 billion, with additional annual costs of $2 to 7 billion, assuming 1985
levels of industry activity. These costs, however, would not actually be
incurred by industry because such costs would make some recovery operations
uneconomic. For example, costs could increase to a point where they exceed
the revenues from oil production and production would be terminated for
economic reasons. The methodology for this assessment accounted for a
reduced level of industry activity.
Depending on future regulatory requirements, the amount of U.S. oil that
may otherwise be recoverable using advanced recovery technologies could be
reduced by 3 to 43 percent at an oil price of $20 per barrel. Significant
impacts were also found at oil prices ranging from $16 to $34 per barrel.
Future regulatory requirements could accelerate the abandonment of U.S. crude
oil resources in known reservoirs by approximately 10 years. At an oil price
of $20 per barrel, an additional 2 to 30% of these resources could be
immediately abandoned. Abandonment could reduce any practical prospect of
future development.
These and other estimates presented in the report may be conservative. For
example, the high cost regulatory scenario was not a worst-case scenario.
And, incremental costs related to oil spill prevention, wetlands protection,
community right-to-know requirements and certain State requirements were not
included.
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Conclusion
The results demonstrate the need for decisionmakers to consider the
cumulative impacts of environmental initiatives that may affect domestic oil
supply so that balance among critical national objectives such as
environmental protection, energy security and the maintenance of a strong
U.S. economy can be achieved.
Methodology
The regulatory scenarios developed for this analysis do not represent any
specific regulatory or legislative proposal of Congress, any State or Federal
agency, or other organization.
Impacts on current production, unrecovered mobile oil and enhanced oil
recovery in known fields, and undiscovered crude oil resources were estimated
using the Tertiary Oil Recovery Information System (TORIS) and Replacement
Costs of Crude Oil (REPCO) Supply Analysis System maintained by DOE's Office
of Fossil Energy. Efforts to recover additional mobile oil and to apply
enhanced oil recovery methods are aimed at producing some of the two-thirds
of the domestic oil that is left in the ground after conventional production
is completed.
The assessment was performed by ICF Resources Inc. for DOE's Office of Fossil
Energy, Office of Planning and Environment, with assistance from the Office
of Geoscience Research and the Bartlesville Project Office.
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TABLE OF CONTENTS
I. Summary 1
II. Introduction 3
III. Summary of Analytical Approach 9
IV. Cumulative Impacts of Environmental Initiatives 12
A. Current Production 13
B. Unrecovered Mobile Oil in Known Fields 16
C. Enhanced Oil Recovery in Known Fields 21
D. Undiscovered Crude Oil Resources 23
V. Conclusions 26
REFERENCES 30
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LIST OF TABLES
Table 1 Impact of Potential Environmental Regulations on U.S. Crude Oil
Supplies at an Oil Price of $20/Bbl 2
Table 2 Summary of Assumptions Corresponding to Three Regulatory Scenarios
Resource Conservation and Recovery Act 5
Table 3 Summary of Assumptions Corresponding to Three Regulatory Scenarios
Safe Drinking Water Act 6
Table 4 Summary of Assumptions Corresponding to Three Regulatory Scenarios
Clean Water Act 7
Table 5 Summary of Assumptions Corresponding to Three Regulatory Scenarios
Clean Air Act 8
Table 6 Impact of Potential Environmental Regulations on U.S. Crude Oil Supplies
at an Oil Price of $16/Bbl 27
Table 7 Impact of Potential Environmental Regulations on U.S. Crude Oil Supplies
at an Oil Price of $24/Bbl 28
Table 8 Impact of Potential Environmental Regulations on U.S. Crude Oil Supplies
at an Oil Price of $32/Bbl 29
LIST OF FIGURES
Figure 1 Over 300 Billion Barrels of Known Oil Resources Will Remain After
Conventional Production 11
Figure 2 Impact of Environmental Regulations on Crude Oil Production in the Nine States
Analyzed ($20/Bbl Oil Price) 15
Figure 3 Impact of Environmental Regulations on Abandonment of the Crude Oil Resource
in the Nine States Analyzed ($20/Bbl Oil Price) 17
Figure 4 Impact of Environmental Regulations on UMO Reserves in Texas, Oklahoma
and New Mexico ($20/Bbl Oil Price) 20
Figure 5 Impact of Environmental Regulations on EOR Reserves in the U.S.
($20/Bbl Oil Price) 22
Figure 6 Impact of Environmental Regulations on Undiscovered Crude Oil Reserves
in the U.S. ($20/Bbl Oil Price) 24
UDrVUU 1 DO.
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I. SUMMARY
A number of legislative and regulatory initiatives being considered to protect the environment
could affect the economics of U.S. oil and gas exploration and production (E&P) operations. Not all
environmental statutes require the Environmental Protection Agency (EPA) or other regulatory agencies
to consider costs and/or energy impacts when establishing regulations. Even when energy impact
analyses are performed, they are often limited in scope, because they generally only consider the impacts
associated with a specific regulation, and almost always assume no impacts from regulations in other
areas. Many in government and industry have expressed concerns that the cumulative costs of multiple
regulatory initiatives could significantly jmpact U.S. crude oil production. Furthermore, while the costs of
these initiatives are additive, the benefits may not be.
This paper summarizes the results of a comprehensive assessment of the potential cumulative
energy and economic impacts of environmental initiatives on U.S. crude oil supplies, which is presented
in more detail in a companion report (ICF Resources, 1990). The purpose of this assessment is to assist
decision makers in examining the numerous factors influencing the economic recovery of the U.S. crude
oil resource. Such factors include oil prices, recovery technologies, taxes, and regulatory compliance
costs. The analysis is intended to expand upon previous DOE assessments of the recovery potential of
U.S. crude oil supplies, which have assumed no change in the costs of environmental compliance, and
aid in DOE research and development (R&D) program planning.
The economic recovery potential from various crude oil resource categories at four constant oil
prices -- $16, $20, $24, and $32 per barrel (in 1988 dollars) - was considered in this assessment. Future
supplies from four categories of U.S. crude oil resources were evaluated: oil recoverable from the
continued conventional production of known onshore Lower-48 fields, oil recoverable from future infill
drilling and waterflood projects in known onshore Lower-48 fields, oil recoverable from future enhanced
oil recovery (EOR) from known onshore Lower-48 fields, and oil recoverable from onshore and offshore
crude oil fields remaining to be discovered in the Lower-48 and Alaska.
The results of this assessment lead to the following major conclusions:
Depending on the extent of new regulatory requirements, the additional costs of
environmental compliance could substantially decrease recoverable crude oil reserves.
At an oil price of $20/Bbl (Table 1):
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TABLE 1
IMPACT OF POTENTIAL ENVIRONMENTAL REGULATIONS
ON U.S. CRUDE OIL SUPPLIES AT AN OIL PRICE OF $20/BBL
Level of Assessment
Implemented Technology
Resource Lost (%)
Low Scenario
Medium Scenario
High Scenario
Conventional
Production*
Nine States**
2
23
30
Public Sector Revenues Lost (%)
Low Scenario n/a
Medium Scenario n/a
High Scenario n/a
Resource Category
Unrecovered
Mobile Oil
Texas, Oklahoma
and New Mexico
16
35
43
16
35
45
Enhanced Oil
Recovery
Lower 48 States
(Onshore)
3
24
29
5
32
40
Undiscovered
Entire U.S.
9
18
42
7
17
36
Advanced Technology
Resource Lost (%)
Low Scenario
Medium Scenario
High Scenario
n/a
n/a
n/a
Public Sector Revenues Lost (%)
Low Scenario n/a
Medium Scenario n/a
High Scenario n/a
6
24
28
7
26
31
11
36
42
15
42
47
n/a
n/a
n/a
n/a
n/a
n/a
n/a = not analyzed
* Represents incremental resource lost (over the reference case) immediately (in 1990) from premature
abandonment
** California, Colorado, Illinois, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming
06K00156.RPT
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reserves from more infill development in known reservoirs could decrease by 6%
to 43%, depending on regulatory requirements and the level of development of
extraction technologies.
reserves from the application of enhanced oil recovery processes in known
reservoirs could decrease by 3% to 42%, again depending on regulatory
requirements and level of technology development.
reserves from the development of future new reservoir discoveries could decrease
by 9% to 42%.
The abandonment of remaining resources in known reservoirs could be accelerated by
approximately 10 years; at a price of $20/Bbl, an additional 2% to 30% of the resource
could be immediately abandoned because of the imposition of increased environmental
regulations.
The evaluated regulatory scenarios have important implications for DOE-sponsored R&D,
as the increased costs of environmental compliance reduces reserves under both
implemented and advanced technology conditions.
The results of this assessment demonstrate that increased regulations affecting U.S. E&P
operations can have a significant impact on potential crude oil recovery. Moreover, the timing of these
increased environmental regulations is extremely important, because the increased costs of environmental
compliance rapidly accelerates the abandonment of the U.S. crude oil resource base. The threat of
accelerated abandonments particularly applies to wells operated by independent producers. As
recognized in DOE's oil research program implementation plan (DOE, 1990), the rate of resource
abandonment can significantly reduce the benefits of research in advanced extraction technologies.
The extent of regulations imposed will determine the level of impact on U.S. crude oil supplies,
but the results of this assessment show that significant impacts are felt over a wide range of regulations,
for all resource categories considered, over a wide range of crude oil prices, and with both current and
advanced extraction technologies.
II. INTRODUCTION
This assessment involved a review of selected environmental initiatives that could affect U.S. oil
and gas exploration and production. Potential initiatives being considered under the authority of several
environmental statutes were included in the assessment. The statutes considered include: the Resource
Conservation and Recovery Act (RCRA), the Safe Drinking Water Act (SDWA), the Clean Water Act (CWA),
and the Clean Air Act (CAA).
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The nature of and estimated incremental compliance costs associated with each initiative were
based on the likely practices that would be required to comply with the initiative if implemented. From
a review of these initiatives, three regulatory scenarios were developed, representing low, medium, and
high levels of incremental compliance costs. The high scenario represents a stringent yet conceivable
level of regulation, but should not be considered a 'worst case' scenario. For example, in reference to
authority under RCRA, this could represent a level of stringency similar to "modified1 RCRA Subtitle C
regulations (which pertain to solid wastes characterized as hazardous under the statute), but would not
include all aspects of those regulations as currently implemented by EPA for hazardous wastes. The low
scenario represents a case that recognizes that some change in existing regulations is inevitable (though
not necessarily the set of initiatives defined), and therefore some impact on U.S. E&P activities is likely.
Finally, the medium scenario represents a case that is between the high and low cases, but should not
be considered a most likely scenario. Again, using RCRA as an example, this could represent a set of
regulations corresponding to a substantially expanded and modified RCRA Subtitle D program (which
pertains to regulations affecting solid wastes not classified as hazardous under the statute). The
regulatory initiatives considered under each scenario are summarized in Tables 2 through 5, organized
by environmental statute.
This assessment does not consider every potential regulatory initiative that may affect the
economics of U.S. E&P activities. The estimated compliance costs associated with many initiatives have
not yet been assessed. In addition, the regulatory initiatives proposed or under consideration are
constantly evolving; this study represents only the initiatives under consideration at the time of the
analysis. Since it does not consider all regulations potentially impacting U.S. crude oil supplies, the
results of the assessment could be considered somewhat conservative.
The assessment also assumes that the regulatory initiatives considered are, for the most part,
universally applied. Except in specific situations (e.g. coastal or offshore areas), no distinction among
acceptable potential compliance practices by region, recovery process, or site-specific conditions is
assumed. If more site-specific, risk-based environmental regulations are implemented, the impacts are
likely to be different (possibly either greater or less) than those estimated in this analysis.
The three sets of regulatory initiatives proposed in this analysis do not necessarily represent any
set of regulations recommended or supported by EPA, any other federal or state agency, or any specific
association, company, or institution. The scenarios proposed are intended to represent a range of
possible combinations of regulations, corresponding to options which have been under consideration or
06K00156.RPT Page 4
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TABLE 2
SUMMARY OF ASSUMPTIONS CORRESPONDING TO THREE REGULATORY SCENARIOS
Resource Conservation and Recovery Act
1.
2.
3.
4.
5.
6.
Regulatory Initiative
Management and Disposal of
Drilling Waste
Low
Regulatory Scenario
Medium
Disposal of Associated
Wastes into Central Disposal
Facilities
Oil-based muds disposed into lined
pits
Salt water-based muds disposed into
lined pits
Liquid wastes into offsite disposal
well; solid wastes into nonhazardous
waste landfill
Upgrading Emergency Pits All emergency pits must be lined.
Replace Workover Pits with
Portable Rig Tanks
Organic Toxicity
Characteristic Test
Corrective Action (Soil
Remediation Only)
Required on all rigs
Oil-based muds use closed systems
Salt water-based muds disposed into
lined pits
Liquid wastes into offsite disposal
well; solid wastes into hazardous
waste landfill
Existing emergency pits must be
lined; new pits must be replaced with
tanks
Required on all rigs
High
Oil-based muds use closed systems
All water-based muds disposed into
lined pits
Liquid wastes into offsite disposal
well; combustible solid wastes into
incinerator; non-combustible solid
wastes into hazardous waste landfill
Tanks must replace emergency pits
for both new and existing pits
Required on all rigs
Applied to all facilities and new wells Applied to all facilities and new wells Applied to all facilities and new wells
Land treatment of hydrocarbon
contamination at 50% of tank
batteries and EOR projects*
Excavation of salt water contamina-
tion at 100% of SWD wells and 75%
of EOR projects* and tank batteries
Land treatment of hydrocarbon
contamination at 50% of tank
batteries and EOR projects*
Excavation of hydrocarbon and salt
water contaminated sites at same
frequency as Medium Scenario
EOR projects refers to both secondary and tertiary recovery projects
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TABLE 3
SUMMARY OF ASSUMPTIONS CORRESPONDING TO THREE REGULATORY SCENARIOS
Safe Drinking Water Act
Regulatory Initiative
1. Mechanical Integrity Testing*
Part 1
Part 2
Non Injection-Related Fluid
Movement
2. Area of Review (on wells drilled
prior to 1984)
3. Corrective Action (on wells drilled
prior to 1984)
Low
Regulatory Scenario
Medium
No incremental requirements (5-year
pressure test)
Radioactive tracer test every five
years
No incremental requirements
No incremental requirements
No incremental requirements
Pressure test frequency based on
corrosive potential of basin
Radioactive tracer test and noise or
temperature log run to injection zone,
frequency based on basin corrosivity
Oxygen activation log and nojse or
temperature log run to lowermost
underground source of drinking
water.
1/4 mile area of review (AOR) under
area permit
5% of producing wells within AOR
assumed to require remedial squeeze
10% of abandoned wells within AOR
assumed to require reentering and
replugging
1% of producing wells within AOR
must be redrilled
High
Continuous positive annular pressure
monitoring and 5-year pressure test
Radioactive tracer test, noise, and
temperature log run to injection zone,
frequency based on basin corrosivity
Oxygen activation, noise, and
temperature log run to lowermost
underground source of drinking water
1/4 mile area of review (AOR) under
individual injector permit
15% of producing wells within AOR
assumed to require remedial squeeze
30% of abandoned wells within AOR
assumed to require reentering and
replugging
3% of producing wells within AOR
must be redrilled
10% of injectors require remedial 30% of injectors require remedial
squeeze squeeze
4. Construction Requirements No incremental requirements
squeeze
2% of injectors must be redrilled 6% of injectors must be redrilled
* MIT Part 1 addresses tubing, casing, and packer integrity. MIT Part 2 addresses fluid movement behind the casing.
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TABLE 4
SUMMARY OF ASSUMPTIONS CORRESPONDING TO THREE REGULATORY SCENARIOS
Clean Water Act
Regulatory Initiative
1. NSPS for Offshore ^Discharge of
Muds and Cuttings*
2. NSPS for Offshore Discharge of
Produced Water
3. NPDES Stormwater Permits
4. Above Ground Storage Tanks
Low
Regulatory Scenario
Medium
EPA Approach A (EPA's estimate of
facilities affected and associated
compliance costs)
Existing facilities: no change
New facilities: treat to 59 mg/l
Required for 55% of facilities
API Partial Discharge Limitation
Scenario (EPA Approach A with API
estimates of compliance costs)
Existing facilities: treat to 59 mg/l
New facilities: shallow water, no
discharge; deep water, treat to
59 mg/l
Required for 55% of facilities
High
API Zero Discharge Limitation
Scenario (API assumption that all
facilities are affected, using API cost
estimates)
Existing facilities: shallow water, no
discharge; deep water, treat to
59 mg/l
New facilities: no discharge all
depths
Required for 55% of facilities
Only leak detection and financial All aspects"1" considered for new All aspects"1" considered for all new
responsibility for new tanks larger tanks larger than 500 barrels; and existing tanks
than 1,000 barrels financial responsibility for all tanks
No incremental requirements
Ban on discharges from new facilities Ban on discharges from all facilities
5. Ban on Onshore Surface and
Coastal Discharge of Produced
Waters
* SeeEAl, 1988.
+ Aspects of regulations include injection and integrity testing, overflow prevention equipment, leak detection equipment, additional corrosion protection, and
financial responsibility requirements.
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TABLE 5
SUMMARY OF ASSUMPTIONS CORRESPONDING TO THREE REGULATORY SCENARIOS
Clean Air Act
Regulatory Initiative Regulatory Scenario
Low Medium High
1. Onshore Air Toxics Emissions API Case I scenario API Case I Scenario API Case II Scenario
Standards*
2. Offshore Air Toxics Emissions California only; no mitigation costs California only; mitigation costs Entire OCS; mitigation costs for
Standards considered considered California only
See Jones, Martin, and Hoffman, 1989
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discussion. These scenarios are used only for estimating the impact of various initiatives on U.S. crude
oil supplies.
The estimated compliance costs used in this assessment are based on data developed in other
recent analyses. These analyses were primarily performed by EPA and/or the American Petroleum
Institute (API). The form of the compliance costs estimates used were often modified in order to
appropriately incorporate them into the analysis models used in the study, but these modifications had
no major effect on the magnitude or applicability of the compliance costs.
The initial step in the assessment involved estimating economic recovery potential under baseline
conditions, which assumed costs of compliance with environmental regulations currently in place. This
analysis was based on regional average costs determined as a function of reservoir depth and other
relevant reservoir parameters. The analysis established recovery potential under baseline conditions,
providing the reference case against which the other scenarios were compared.
Future production from four categories of U.S. crude oil resources was evaluated:
The continued conventional production of known fields in the Lower-48 onshore
Future infill drilling and waterflood projects in known fields in the Lower-48 onshore
Future enhanced oil recovery (EOR) projects in known fields in the Lower-48 onshore
Onshore and offshore crude oil fields remaining to be discovered in the Lower-48 and
Alaska.
The reservoir data bases used in the assessment did not represent the entire U.S. resource base.
Analyses were generally performed on a subset of reservoirs for each resource category. The results for
each subset of reservoirs were not extrapolated; i.e., the results presented only correspond to the impacts
that are explicit to the reservoirs analyzed, and therefore, should be considered conservative. In addition,
this analysis only considered the impacts on crude oil reserves. Many of these regulations could also
impact the development of U.S. natural gas reserves, but these impacts were not considered in this study.
III. SUMMARY OF ANALYTICAL APPROACH
After currently proved reserves are produced by conventional (primary and secondary) recovery
methods, nearly two-thirds of the known U.S. oil resource (over 300 billion barrels) will remain unrecovered
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(Figure 1). Nearly 100 billion barrels are displaceable by water but are left in the reservoir at the end of
conventional recovery operations because this oil has not been contacted or swept by existing
waterfloods. Another 242 billion barrels are not displaceable by water; the recovery of a portion of this
resource depends on the application of tertiary recovery processes. Although not all of this remaining
resource in place could ever be recovered, it represents a substantial target for future advanced recovery
operations. DOE estimates that an additional 76 billion barrels of this resource could be recovered at a
price of $32/Bbl, given some advances in extraction technologies over the next 15 years (DOE, 1990).
The analysis of the production potential of the known (already discovered) oil resource is based
on recovery performance and economic modeling which uses data on critical properties for major U.S.
crude oil reservoirs. In this analysis, the Tertiary Oil Recovery Information System 0"ORIS), developed by
the National Petroleum Council (NPC) and maintained at DOE's Bartlesville Project Office, was used (NPC,
1984). TORIS utilizes comprehensive oil reservoir data bases and detailed engineering and economic
evaluation models, considering data for individual reservoirs to predict crude oil production, investment
and operating costs, project economics, and, ultimately, potential crude oil reserves. The analysis of the
undiscovered crude oil resource uses models also developed by DOE in its Replacement Costs of Crude
Oil (REPCO) Supply Analysis System (Lewin and Associates, Inc., 1985). This system is designed to
determine the cost of finding and developing U.S. undiscovered crude oil resources, which are estimated
to amount to approximately 49 billion barrels technically recoverable; of which, over 30 billion barrels are
economically recoverable at $32/Bbl (DOI, 1989; ICF Resources, 1990).
Both the TORIS and REPCO systems were enhanced to appropriately incorporate the addition
of incremental costs associated with potential environmental regulations and to provide output in a form
that allows the results for the different resource categories to be presented in a consistent basis. For
some categories of crude oil resources, analyses were performed assuming two levels of technology -
implemented and advanced. The implemented technology case assumes recovery practices currently
available for implementation in the field. The advanced technology case assumes improvements in
extraction technologies and reductions in extraction costs will result from successful research and
development within a reasonable period of time, and will be widely applied in the field.
The applicable state and federal tax structures for each geographic area were considered for each
reservoir. The federal corporate income tax was calculated based on the current marginal corporate tax
rate of 34%.
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Figure 1
Over 300 Billion Barrels of Known U.S. Oil Resources Will
Remain After Conventional Production (As of 12/31/87)
Remaining Oil-In-Place
341 Billion Barrrels
(67%)
Economically Recoverable
at $32/Bbl with
Advanced Technology
Unrecoverable
69 Billion Barrels
Cumulative Production
145 Billion Barrels
(28%)
Recoverable
30 Billion Barrels
Mobile Oil
99 Billion Barrels
(20%)
Recoverable
46 Billion Barrels
Proved Reserves
27 Billion Barrels
(5%)
Immobile Oil
242 Billion Barrels
(47%)
Conventional Recovery
172 Billion Barrels
(33%)
Source: DOE, 1989
513 Billion Barrels
Original Oil-In-Place
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IV. CUMULATIVE IMPACTS OF ENVIRONMENTAL INITIATIVES
The incremental compliance costs associated with the potential regulatory initiatives that were
considered in this assessment could be substantial. Potential industry compliance costs could range from
$15 to $79 billion initially, and from two to seven billion dollars per year thereafter, assuming the
continuation of 1985 levels of oil and gas drilling and development. These estimates assume the
increased regulations would not affect petroleum industry activity except in adding costs to operations
that would be pursued regardless of whether or not the regulations would be implemented. Under this
assumption, additional environmental regulations would lead to greater industry expenditures.
However, industry expenditures will not necessarily increase because of increased environmental
regulations. This analysis shows that increased environmental regulations could lead to some previously
viable projects becoming uneconomic to pursue. Consequently, reduced development of crude oil
resources could more than offset the increased compliance costs. Ultimately, overall industry investment
and operating expenditures could in fact decrease as a result of the increased regulatory requirements.
The cumulative energy and economic impacts of the regulatory initiatives considered are
presented below for most resource categories and crude oil prices in terms of the following:
Economically recoverable resources (reserves) that become uneconomic as a result of
increased environmental regulations
State and federal revenues (from federal royalty payments, federal income taxes, state
income taxes, and state and local production and severance taxes) that are not collected
as a result of lost reserves.
While these impacts were assessed in terms of four constant crude oil prices, only the results of
the $20/Bbl case will be the focus of the discussion below. Tables summarizing the impacts estimated
at the other oil prices considered will be presented at the end of this report, and are discussed in detail
in the companion to this summary report (ICF Resources, 1990).
The results of this analysis are discussed separately below for each of the resource categories
considered.
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A. Current Production
DOE has recently concluded that the U.S. will continue to face a rapid pace of resource
abandonment (DOE, 1989), and that many factors (e.g., oil prices, extraction technologies, taxes, and
regulatory costs) can influence the rate and level of these abandonments. These analyses served as the
basis for assessing the impact of increased costs of environmental regulations on the continued
production from U.S. oil reservoirs. These analyses projected future production from individual reservoirs
based on historic trends. Reservoirs were analyzed in nine major oil producing states: California,
Colorado, Illinois, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming. These states were
chosen for the availability and comprehensiveness of resource data, production data, and well counts;
because the states represent various stages of oil resource maturity; and because they account for 83%
of the original-oil-in-place and over 75% of the remaining oil in place in the Lower-48 states.
In the reference case in this assessment, production projections assumed that historical activities
to maintain and/or increase production in each reservoir are continued in the future. Oil production is
economically viable to the economic limit of production, where revenues from oil sales just offset
associated production costs. As oil prices increase, the economic limit for production is lowered and the
productive life of a reservoir extended. Similarly, as costs increase (e.g., due to increased costs of
compliance with environmental regulations), the economic limit is raised and the productive life of a
reservoir shortened.
The impacts of the incremental costs associated with the regulatory scenarios were examined by
performing a discounted cash flow analysis on each reservoir over its productive life, assuming that the
reservoir must incur the incremental investment and operating costs associated with the regulatory
scenario. The analysis is performed from the perspective of the operator of the reservoir, who would
conduct a financial analysis to determine the impact on project profitability from the incremental costs of
compliance over the productive life of the reservoir. This analysis would be performed at the time the
regulations go into effect. At this point in time, each operator would make a decision whether to continue
with production and incur the incremental costs of regulatory compliance, or begin to shut in production.
As a result, a considerable portion of current production could be shut in and the associated resource
abandoned immediately after the implementation of the new regulations. For those reservoirs that
continue to operate, the imposition of additional environmental regulations could rapidly accelerate the
point of abandonment (economic limit), because of increased environmental compliance costs. Many
reservoirs would be abandoned and their production shut in much earlier than would happen under
current practices.
06K00156.RPT Page 13
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In the early 1970s, crude oil production in the nine states analyzed peaked at about 4.6 million
barrels per day (MMB/D), as shown in Figure 2. By 1989, production in these states had dropped to 2.2
MMB/D, a 55% decrease in production over the 20-year time period. The decline curve estimate
presented in Figure 2 was developed from historical, reservoir-by-reservoir production data through 1988
(the most recent date comprehensive, reservoir-specific production data were available). TORIS
predictions of reservoir-specific production were used over the 1989 through 2015 time period. In this
analysis, 1990 was assumed to be the year the regulatory initiatives under each scenario are
implemented.1
At an oil price of $20/Bbl, by 1995, production in the nine states could drop by about 320,000 B/D
in the medium scenario (a 22% decrease over that in the reference case). Production in 1995 could drop
by 450,000 B/D in the high scenario, compared to the reference case, a 31% decrease. In the low
scenario, the impact of environmental regulations on production in the nine states would be small (less
than a 1% change). By the year 2000, production under the medium scenario could decrease 110,000
B/D more than the reference case, an 12% decrease. In the high scenario, approximately 190,000 B/D
of production could be lost by 2000, a decrease of 21% compared to the reference case. This decrease
in production due to the increased costs of environmental compliance could result in lost reserves ranging
from 100 to 1,800 million barrels (MMB) in the nine states over the 1990 to 2000 time period. Although
the results in Figure 2 only correspond to the situation at a $20/Bbl oil price, similar impacts occur at
prices ranging from $16 to $32/Bbl.
The future recovery of the known remaining crude oil resource presupposes that the existing wells
and infrastructure in producing reservoirs will be available for the application of future, advanced recovery
technologies. Moreover, it assumes that operators can retain production rights (leases) to produce oil
from these reservoirs. Once abandoned, the resource in these reservoirs becomes essentially
inaccessible to future development within the range of prices generally considered likely over the next 15
to 20 years, even with further improvements in recovery technologies.
As the costs of compliance with environmental regulations increase, the costs of operating
marginally economic wells in producing reservoirs will increase, resulting in the accelerated abandonment
of these wells. As well abandonments erode access to the remaining resource, fewer future recovery
projects will be economically justifiable. These projects will not recover sufficient oil to justify both the high
1 This analysis represents an update to the production decline and resource abandonment
forecasts published previously by DOE (DOE, 1989). For a comparison between this update and
the previous DOE forecast, see ICF Resources (1990), the companion report to this document.
06K00156.RPT Page 14
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Figure 2
Impact of Environmental Regulations on Crude Oil
Production in the Nine States Analyzed ($20/Bbl Oil Price)
rt
Q
Q.
03
CO
c
o
o
**
*)
o
4-
3-
2-
1-
0
1970
TORIS Projections
Reference Case
Low Scenario
Medium Scenario
High Scenario
1975 1980 1985 1990 1995
Year
2000
2005
2010
2015
06K00156.RPT
Page 15
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start-up costs associated with advanced recovery technologies and the costs of redrilling or re-entering
wells in abandoned oil reservoirs. The impact of the increased compliance costs are therefore two-fold.
First, reserves are lost because of the earlier abandonment of these wells. Second, access to the
remaining resources associated with these abandoned wells will be lost, and hence, the potential future
production from advanced recovery technologies in reservoirs containing these wells will be economically
prohibitive.
The impacts of the three regulatory scenarios on the abandonment of crude oil resources in the
nine states are shown in Figure 3. At $20/Bbl, only about 2% more of the resource in place in the nine
states could be immediately abandoned (in 1990) under the low scenario than that abandoned in the
reference case at the same point in time. Under the medium scenario, 23% more of the resource in place
could be abandoned immediately, compared to the reference case, while an additional 30% of the
resource could be immediately abandoned under the high scenario, when compared to the reference
case. The analysis shows that by the year 2000, the imposition of the incremental regulations have little
effect on resources ultimately abandoned, but could have a significant impact on the rate of these
abandonments, if no new development of these currently producing reservoirs takes place.
By 1995, resource abandonments are predicted to reach over 70% of the U.S. resource base
under both the medium and high scenarios, assuming no future drilling or development activities in these
producing reservoirs take place. Therefore, increased regulations can increase the pace of U.S. crude
oil resource abandonments by approximately ten years. This can result in a significant reduction in the
time available for technological development to make a contribution to production in these reservoirs on
the verge of abandonment.
B. Unrecovered Mobile Oil In Known Fields
Unrecovered mobile oil (UMO) is oil that is displaceable by water but is left in the reservoir at the
conclusion of conventional recovery operations because of reservoir heterogeneity or mobility differences
that cause injected water to finger through or around the oil, leaving portions of the reservoir at near
original oil saturation. Producing the UMO resource requires additional wells drilled at closer spacing, to
improve contact with the uncontacted and/or unswept oil and improve waterflood sweep and pattern
conformance. Additional improvements in secondary recovery can be achieved with the application of
polymers to help improve mobility or gel treatments to reduce permeability contrasts between reservoir
06K00156.RPT Page 16
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TJ
0)
o
o
e
3
O
w
0)
OS
Figure 3
Impact of Environmental Regulations on Abandonment of the
Crude Oil Resource in the Nine States Analyzed ($20/Bbl Oil Price)
100.0%
90.0% -
80.0%
70.0% -
60.0% -
50.0% -
40.0%
Medium Scenario
High Scenario
1990
1995
2000
2005
2010
2015
Year
06K00156.RPT
Page 17
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layers. In many reservoirs, a much higher recovery efficiency is obtained with the combined application
of infill drilling and these improved secondary recovery techniques.
The assessment of the economic impact of environmental regulations on the UMO resource was
based on analyses of 700 crude oil reservoirs in Texas, Oklahoma, and New Mexico. The reservoirs are
estimated to have originally contained almost 112 billion barrels of oil in place, representing about one-fifth
of the total resource in place in the U.S. The analysis of this resource expands upon previously
sponsored work by DOE (ICF Resources and BEG, 1989).
Three recovery processes for improving the producibility of mobile oil were considered: infill
drilling, permeability modification treatments (which directs the flow of injected water to lower-permeability
layers containing mobile oil), and polymer-augmented waterflooding (where polymers are added to the
injected water to obtain a more favorable water-oil mobility ratio and improve recovery efficiency).
Two technology cases were assumed in the evaluation of UMO recovery potential. The cases
were based on two different levels of geologic understanding and using two classes of polymers. The
first level, corresponding to technology that can currently be implemented in the field, reflects limited
geologic understanding of reservoir heterogeneity and the technical shortcomings of currently available
polymers. This implemented technology scenario assumed a blanket or uniform approach to infill
development, where a single one-half reduction in reservoir-wide spacing, or one drilldown, was assumed.
This scenario is based on the assumption that the operator would be unwilling to assume the risk of
further, more costly infill development to closer spacings without the acquisition of additional geologic
information on reservoir heterogeneity, and would therefore only pursue a 'one-drilldown-at-a-time'
approach.
The second level, corresponding to an advanced technology case, assumed a significantly
improved understanding of reservoir heterogeneity and improvements in advanced waterflooding
techniques that increase the applicability and productivity of these processes, including the development
of improved polymers for field application in higher temperature and higher salinity settings. This scenario
assumed that sufficient geologic data would exist to characterize the reservoir and delineate it into distinct
segments, or facies, with reservoir parameters and heterogeneity relationships developed independently
for each segment. The availability of more detailed geologic information would allow the operator to make
a more informed assessment and to undertake a geologically targeted infill drilling program in each facies
to the minimum spacing economically justifiable.
06K00156.RPT Page 18
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The assessment of the impact of environmental initiatives on UMO development in Texas,
Oklahoma, and New Mexico demonstrated that under all regulatory, technology, and oil price scenarios
considered, the development of otherwise economically viable projects may not be pursued. Depending
on the level of environmental regulations implemented, as much as 43% of UMO reserves in these states
could become uneconomic to develop, assuming the application of current recovery technologies. While
the development and introduction of advanced UMO extraction technologies could result in substantial
additional potential crude oil reserves, the impacts of environmental regulations on reserves recoverable
from advanced technology could still be considerable. Again depending on the level of environmental
regulations implemented, as much as 28% of potentially recoverable UMO reserves in these states could
become uneconomic to develop, even if the application of advanced recovery technologies becomes
widespread.
Under the implemented technology case at an oil price of $20/Bbl (near current oil prices), the
low scenario could result in 330 MMB of reserves becoming uneconomic to develop in the three states,
16% of the reserves that would otherwise be economic at this price (Figure 4). Under the medium
scenario, 718 MMB of reserves could be lost at $20/Bbl, 35% of otherwise recoverable UMO reserves.
Finally, under the high scenario, 892 MMB of reserves recoverable under current conditions could become
uneconomic at $20/Bbl, corresponding to 43% of UMO reserves otherwise recoverable at this price.
In the advanced technology case, low scenario, 307 MMB of reserves could be impacted at
$20/Bbl, corresponding to about 6% of the reference case reserves becoming uneconomic. Under the
medium scenario, 1,307 MMB of reserves could become uneconomic as a result of increased
environmental regulations, corresponding to 24% of the reference case reserves. Finally, under the high
scenario, 1,546 MMB of reserves could be lost at $20/Bbl, 28% of otherwise recoverable reserves.
Under the implemented technology case, public sector revenues associated with UMO reserves
development in the three states could decrease by as much as 45% because of increased environmental
regulations. Under the advanced technology case, revenues could drop by as much as 31%.
The development of the UMO resource requires that a considerable number of new production
and injection wells be drilled. Environmental regulations that apply directly to drilling these wells, such
as management and disposal requirements for drilling muds and cuttings and area-of-review and
corrective action requirements for siting new injection wells, are the most significant environmental
regulatory cost factors influencing the economics of developing the UMO resource.
06K00156.RPT Page 19
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Figure 4
Impact of Environmental Regulations on UMO Reserves in
Texas, Oklahoma and New Mexico ($20/Bbl Oil Price)
6 -
-------
C. Enhanced Oil Recovery In Known Fields
Enhanced oil recovery (EOR), for purposes of this study, is defined as the incremental recovery
of oil in a reservoir over that which could technically be produced by conventional primary and secondary
recovery methods. EOR methods include miscible gas injection (typically carbon dioxide), chemical
flooding (normally surfactants and alkalines) and thermal recovery, which relies on the introduction of
thermal energy (most commonly in the form of injecting steam or by injecting air and starting a
combustion front in the reservoir) to reduce oil viscosity and increase recovery.
The analysis of EOR potential in this study is based on the TORIS analysis system, containing a
reservoir data base consisting of over 3,700 reservoirs throughout the U.S. The individual reservoirs
evaluated in the study contain over 72% of the total original oil resource in place in the U.S. This analysis
again expands upon previously conducted, DOE-sponsored work (DOE, 1990).
Two levels of EOR technology were evaluated. The first level, the implemented technology case,
represents technology currently available, tested, and proven in successful field applications. The second
level, the advanced technology case, assumes technological improvements resulting from successful
research and development, improving reservoir description and EOR efficiencies and expanding the
applicability of various EOR processes to a broader range of reservoirs.
The analyses of the impact of environmental initiatives on EOR development in the U.S. show that
under all regulatory and oil price scenarios considered, the development of otherwise economic EOR
reserves may not take place because of increased environmental regulations. Similar to the results for
the UMO resource category, economic and energy impacts are predicted for all scenarios, oil prices, and
levels of technology considered, with recovery from all EOR processes affected.
In the low scenario under the implemented technology case at an oil price of $20/Bbl, 85 MMB
of reserves could become uneconomic, corresponding to 3% of the reserves that could be economic
under reference conditions (Figure 5). In the medium scenario, 638 MMB of reserves could be impacted,
corresponding to 24% of the reserves that could otherwise be economic at this price. Finally, in the high
scenario, 768 MMB of reserves could be lost, 29% of the reserves that could otherwise be economic under
the reference case at this price.
In the advanced technology case, low scenario, 669 MMB of reserves could be lost at $20/Bbl,
11% of otherwise recoverable reserves. In the medium scenario, 2,165 MMB of reserves could be lost,
06KCX3156.RPT Page 21
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Figure 5
Impact of Environmental Regulations on
EOR Reserves in the U.S. ($20/Bbl Oil Price)
7.5 -/
2 5.0
a
CQ
§
PQ
SI 2.5
0.0
Reference Case
Low Scenario
Medium Scenario
High Scenario
Implemented Technology
Advanced Technology
06K00156.RPT
Page 22
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roughly three times that lost under the implemented technology case. This represents 36% of the
reserves that could otherwise be economic at this price. In the high scenario, 2,539 MMB of reserves
could be lost, 42% of otherwise recoverable reserves.
This loss in reserves could translate to as much as a 40% reduction in public sector revenues in
the implemented technology case, and a 47% reduction in revenues in the advanced technology case.
The impact on EOR of increased environmental compliance costs is similar to that associated with
the development of the UMO resource. EOR projects also generally require the drilling of additional
production and injection wells; consequently the incremental compliance costs associated with this activity
will greatly influence project economics.
D. Undiscovered Crude Oil Resources
Undiscovered crude oil resources, as defined by the U.S. Department of Interior (DOI, 1989), are
those resources judged to exist in geologically promising but unexplored or undrilled areas. For purposes
of this analysis, the economic feasibility of recovering undiscovered resources was determined under the
assumption that the volume of crude oil associated with a discovered hydrocarbon accumulation must
support all costs associated with its development and production, including all finding and lease bonus
costs. The undiscovered resource base assessed as part of this study is based on the most recent DOI
assessment (DOI, 1989).
In this analysis, the entire U.S undiscovered crude oil resource base is considered. No exclusions
for land set aside from leasing or currently under leasing moratoria, such as that in the Arctic National
Wildlife Refuge (ANWR) or certain areas off the coast of California and Florida, were considered. If
development in these areas are prohibited or substantially delayed, the impact on recoverable resources
could be greater than those predicted in this assessment.
The three environmental scenarios considered are expected to all have a significant impact on
the economic viability of finding, developing, and producing U.S. undiscovered crude oil reserves. Under
the low scenario at $20/Bbl, up to 994 MMB will become uneconomic to develop as a result of increased
environmental regulations. This corresponds to 9% of otherwise recoverable reserves (Figure 6). Under
the medium scenario, 2,096 MMB could be lost, corresponding to 18% of otherwise recoverable reserves.
Finally, under the high scenario, up to 4,883 MMB could be lost, corresponding to 42% of otherwise
recoverable reserves.
06K00156.RPT Page 23
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Figure 6
Impact of Environmental Regulations on Undiscovered
Crude Oil Reserves in the U.S. ($20/Bbl Oil Price)
15 -,
(S
o
a*
Alaska
Lower 48 Offshore
Lower 48 Onshore
Reference
Low
Medium
High
06K00156.RPT
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Increased regulations will have the greatest impact on undiscovered crude oil reserves in the
onshore Lower-48. At $20/Bbl, 22% of reserves could be lost under the low scenario, 46% of reserves
could be lost under the medium scenario, and in the high scenario, increased environmental regulations
could result in 66% of otherwise recoverable reserves becoming uneconomic. In terms of volumes of
reserves lost, 994 MMB could be lost under the low scenario, 2,096 MMB could be lost in the medium
scenario, and 3,013 MMB could become uneconomic in the high scenario.
Increased regulations will have a lesser impact on the discovery and development of oil reserves
in Alaska and the offshore Lower-48 than that on onshore Lower-48 reserves under the low and medium
scenarios. In the offshore and Alaska, the increased costs of environmental compliance will make up a
smaller portion of total project costs than that in the Lower-48 onshore. Consequently, the environmental
initiatives considered under the low and medium scenarios are estimated to have a relatively small impact
on project economics.
Under the high scenario, however, the impacts of increased regulations on undiscovered crude
oil reserves in the Lower-48 offshore and Alaska are considerable. In the Lower-48 offshore, up to 971
MMB of reserves could be lost, 17% of otherwise recoverable reserves. The impacts of increased
regulations on undiscovered crude oil reserves in Alaska could amount to as much as 899 MMB of
reserves lost at $20/Bbl, 67% of reserves otherwise recoverable under the reference case.
It should be noted, however, that in this analysis, incremental environmental compliance costs in
Alaska, with the exception of the management and disposal costs for drilling muds and cuttings, were
assumed to be the same as those in the Lower-48. No incremental compliance cost estimates explicitly
developed for Alaska operations were available. Environmental compliance costs in Alaska will probably
be considerably greater than those in the Lower-48. Therefore, the analysis of Alaska in this assessment
will likely represent somewhat of an underestimate of the impacts of environmental regulations on Alaskan
undiscovered crude oil production.
The loss of recoverable undiscovered crude oil reserves in the U.S. as a result of increased
environmental requirements could result in as much as a $15 billion reduction in public sector revenues
over the life of these projects, a 26% reduction.
06K00156.RPT Page 25
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V. CONCLUSIONS
The overall results of this assessment for all resource categories considered are summarized in
Table 6 for the $16/Bbl case, Table 7 for the $24/Bbl case, and Table 8 for the $32/Bbl case (Table 1
summarized the $20/Bbl case). Although the discussion of results presented above focused only on the
$20/Bbl oil price case, the results of this analysis show that for all oil prices, resource categories, levels
of technology, and environmental regulatory scenarios evaluated, considerable amounts of crude oil
reserves could become uneconomic to develop as the result of increased costs of environmental
compliance, and that these regulations can lead to the accelerated abandonment of existing, accessible
domestic resources.
The results of this analysis lead to the following major conclusions:
New regulatory requirements under several environmental statutes, when considered
together, could substantially decrease the future recovery potential from all resource
categories considered.
Abandonment of remaining resources in known, producing oil reservoirs could be
accelerated by approximately 10 years.
The evaluated cumulative regulatory scenarios have important implications for DOE-
sponsored research and development, as the increased costs of compliance reduces
recovery under both implemented and advanced technology conditions.
The resulting losses in future U.S. crude oil supplies will have associated impacts in terms of
reduced national energy security, decreased tax revenues, fewer oil field jobs, and increased levels of
crude oil imports. Moreover, the ability of the U.S. petroleum industry to compete in the world oil market
could be significantly diminished.
06K00156. RPT Page 26
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TABLES
IMPACT OF POTENTIAL ENVIRONMENTAL REGULATIONS
ON U.S. CRUDE OIL SUPPLIES AT AN OIL PRICE OF S16/BBL
Resource Category
Conventional Unrecovered Enhanced Oil
Production* Mobile Oil Recovery Undiscovered
Level of Assessment Nine States** Texas, Oklahoma Lower 48 States Entire U.S.
and New Mexico (Onshore)
Implemented Technology
Resource Lost (%)
Low Scenario 3 4 <1 12
Medium Scenario 21 21 46 25
High Scenario 26 26 53 36
Public Sector Revenues Lost (%)
Low Scenario n/a 7 4 13
Medium Scenario n/a 29 58 21
High Scenario n/a 34 72 36
Advanced Technology
Resource Lost (%)
Low Scenario n/a 4 21 n/a
Medium Scenario n/a 14 51 n/a
High Scenario n/a 24 66 n/a
Public Sector Revenues Lost (%)
Low Scenario n/a 5 32 n/a
Medium Scenario n/a 21 58 n/a
High Scenario n/a 32 84 n/a
n/a = not analyzed
* Represents incremental resource lost (over the reference case) immediately (in 1990) from premature,abandonment
** California, Colorado, Illinois, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming
06K00127.TBL Page 27
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TABLE 7
IMPACT OF POTENTIAL ENVIRONMENTAL REGULATIONS
ON U.S. CRUDE OIL SUPPLIES AT AN OIL PRICE OF $24/BBL
Level of Assessment
Implemented Technology
Resource Lost (%)
Low Scenario
Medium Scenario
High Scenario
Public Sector Revenues Lost (%)
Low Scenario
Medium Scenario
High Scenario
Resource Category
Conventional
Production*
Nine States**
1
17
29
n/a
n/a
n/a
Unrecovered
Mobile Oil
Texas, Oklahoma
and New Mexico
Enhanced Oil
Recovery
Lower 48 States
(Onshore)
Undiscovered
Entire U.S.
1
25
34
5
30
38
7
11
23
10
18
28
8
17
38
7
17
35
Advanced Technology
Resource Lost (%)
Low Scenario
Medium Scenario
High Scenario
Public Sector Revenues Lost (%)
Low Scenario
Medium Scenario
High Scenario
n/a
n/a
n/a
n/a
n/a
n/a
5
22
28
7
26
32
5
20
32
6
23
37
n/a
n/a
n/a
n/a
n/a
n/a
n/a = not analyzed
* Represents incremental resource lost (over the reference case) immediately (in 1990) from premature abandonment
** California, Colorado, Illinois, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming
06k00127.TBL
Page 28
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TABLE 8
IMPACT OF POTENTIAL ENVIRONMENTAL REGULATIONS
ON U.S. CRUDE OIL SUPPLIES AT AN OIL PRICE OF $32/BBL
Resource Category
Conventional Unrecovered Enhanced Oil
Production* Mobile Oil Recovery Undiscovered
Level of Assessment Nine States** Texas, Oklahoma Lower 48 States Entire U.S.
and New Mexico (Onshore)
Implemented Technology
Resource Lost (%)
Low Scenario 2 3 3 10
Medium Scenario 20 21 15 12
High Scenario 29 25 20 22
Public Sector Revenues Lost (%)
Low Scenario n/a 5 47
Medium Scenario n/a 26 19 12
High Scenario n/a 32 25 29
Advanced Technology
Resource Lost (%)
Low Scenario n/a 6 1 n/a
Medium Scenario n/a 14 20 n/a
High Scenario n/a 21 29 n/a
Public Sector Revenues Lost (%)
Low Scenario n/a 7 2 n/a
Medium Scenario n/a 20 24 n/a
High Scenario n/a 27 36 n/a
n/a = not analyzed
* Represents incremental resource lost (over the reference case) immediately (in 1990) from premature abandonment
** California, Colorado, Illinois, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming
06k00127.TBL Page 29
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REFERENCES
Economic Analysis, Inc., Economic Analysis of Proposed EPA Regulations on Drilling Fluids and Cuttings:
Offshore Oil and Gas Industry, report prepared for the American Petroleum Institute, December 31,1988.
ICF Resources Incorporated, Potential Cumulative Impacts of Environmental Regulatory Initiatives on U.S.
Crude Oil Exploration and Production: Volume 2 - Final Report, report prepared for the U.S. Department
of Energy, Office of Fossil Energy, June 1990.
ICF Resources Incorporated and the Bureau of Economic Geology, University of Texas at Austin,
Producing Undiscovered Mobile Oil: Evaluation of the Potentially Economically Recoverable Reserves In
Texas, Oklahoma, and New Mexico, report prepared for the U.S. Department of Energy, May 1989.
Jones, Jeff, Gary Martin, and Lisa Hoffman, An Analysis of Petroleum Industry Costs Associated with Air
Toxics Amendments to the Clean Air Act, report prepared for the American Petroleum Institute, Interim
Final Report, October 17,1989.
Lewin and Associates, Inc. Replacement Costs of Domestic Crude Oil: Supply Analysis Methodology.
report prepared for the U.S. Department of Energy, Office of Fossil Energy, July 1985.
National Petroleum Council, Enhanced Oil Recovery. June 1984.
U.S. Department of Energy, Bartlesville Project Office, Abandonment Rates of the Known Domestic Oil
Resource. April 1989.
U.S. Department of Energy/Fossil Energy, Office of Oil, Gas, Shale, and Special Technologies, OJ
Research Program Implementation Plan. April 1990.
U.S. Department of Interior, U.S. Geological Survey, Minerals Management Service, Estimates of
Undiscovered Conventional Oil and Gas Resources in the United States -- A Part of the Nation's Energy
Endowment. 1989.
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