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<br /> <br />3.3.2 Projected Crude Petroleum Prices (at Wellhead) <br />Future crude petroleum prices were projected using the same method- <br />ology employed for projecting coal prices: the long-term annual rate-of- <br />change was determined and applied to the estimated current price level. <br />The current price level was that estimated for the week of March 2, <br />1980.1,2 However, the existing pricing policy with respect to domestic <br />and imported crude petroleum supplies required adjustments on the near- <br />term price projections. <br />The 1980 average price for crude petroleum at wellhead in the six <br />High Plains states was assumed to be the then current US refiner acquisi- <br />tion price, approximately $24.20 per barrel in 1980 dollars ($19.60 per <br />barrel in 1977 dollars). Though that current average price reflected <br />lower than $24.20 per barrei domestic crude petroleum prices, it was <br />judged a reasonable estimate of 1980 w'ellhead prices for crude petroleum <br />in the six-state region. <br />The policy of the Economic Regulatory Administration was to decontrol <br />domestic crude petroleum by November 1981, at which time it would sell at <br />the world market clearing price. Implementation of that policy was un- <br />certain at the time; however, it WClS assumed that by 1985 the average <br />regional wellhead crude petroleum price would attain the world price. <br />Over this time period, world crude petroleum prices were projected to <br />increase in real terms at the long-term annual real rate-of-change, which <br />was calculated to be approximately 0.40 per cent. <br />As with the coal price projection, high and low projections were <br />developed to allow for parametric Clnalyses. <br />The projected crude petroleum prices are shown in Table 3-2, along <br />with projected domestic crude prices from other recent studies. As was <br />stated in Subsection 3.3.1, the other projections are presented for illus- <br />trative purposes only; the studies and their limitations for comparative <br />purposes are discussed in Appendix C. <br />An evaluation was made of projected crude petroleum replacement <br />costs for 1980, 1985, and 1990. The eval uation showed that near-term <br /> <br />3-6 <br />