Those Slippery Data

When it comes to oil reserves, the U.S. is surely in the hole--as the American Petroleum Institute reiterated last week. The industry trade association reckoned that the nation's proven recoverable reserves dropped last year by 1.7 billion bbl., to 30.9 billion bbl. That is just one of many statistics measuring just what the U.S. has down there, for no industrial society gathers more energy information or has more computers to refine it. Yet the U.S. is woefully unaware of the real size of its energy resources.

Federal officials, who depend almost entirely on the oil and gas companies for estimates of reserves, must contend with wildly varying figures, some of them just high-grade guesses. The problem is a serious obstacle to policymaking. For example, the U.S. Geological Survey--working from raw oil-company data and lacking funds to drill sufficient test holes--estimates that undiscovered resources of natural gas lying under water on the outer continental shelf may be as high as 655 trillion cu. ft., which at current consumption rates for gas would meet U.S. needs for more than 30 years. But then again, says USGS, the resources might be less than half that much. Lacking a better fix, energy planners cannot estimate how much of the nation's requirements might be filled, and how quickly, if they overrode environmentalist objections and opened all the fields to drilling. Similarly, until there are better figures on all oil and gas reserves, no one can say how much production might rise if prices were decontrolled.

Wide Variables. Though they have scant evidence to back their accusation, some Washington officials charge that the energy companies understate reserves in order to promote price deregulation. Industry leaders respond that estimating reserves is a highly inexact science. Explains Dale Wood-dy, chief of Exxon's domestic natural-gas operations: "Two well-qualified engineers can take the same raw data from a new field and come up with reserve estimates that may vary by more than 50%."

Washington adds to the confusion by demanding that the companies fill out barrels of reports, many of them overlapping and unnecessary. In all, 44 agencies conduct 261 energy data-gathering programs that will cost $100 million this year. The reporting guidelines are often as clear as crude oil. Typically, one big oil company last year submitted 375,000 computer print-outs and 577 miles of computer tapes to the Federal Energy Administration alone.

The Government is determined to take a larger role in estimating reserves. While some industry leaders would welcome this as lightening their burden, others fear that bureaucrats might be naive about the inherent vagaries of estimating reserves and might strive for an exactitude that would be misleading. One good sign: Energy Chief James Schlesinger plans to consolidate and simplify the reporting programs and reduce their number to 100 or less. He also wants new standards of conformity so that companies will finally use the same criteria. Even then, because of the difficulty of measuring underground deposits, the U.S. will never know exactly how great its resources are. Says Interior Secretary Cecil Andrus: "Unless the Government stations an inspector at every drill hole, every gas well and pipeline and at the working face of every coal mine every day, we'll never get completely accurate figures." But with fewer reporting programs and better criteria, the estimates will be much more precise and, above all, more believable.

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