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f":io . ,~u i "_ How Do Reserves Affect Domestic Production? 16 mmb/d C:J Alternate Reseoe Estimates 14 CJ Price Controls _ Historical Production Optimislic Reserves .. o . " o ~ .. peSSimiSIiJ Reserves Ellpecled Reserves 8 ;';1 12 10 . "], 'f" I =: Price Conlrols 6 1955 6. 65 7. 75 8. 85 9. . The amount 01 oil we discover and produce depends on how much oil is in the ground (reserves) and whether oil prices are high enough 10 justify Its production. . II oil prices remain at current levels and the Federal Gov. ernment's best estimate of known and expected reserves proves correct. domestic production could reach 12.3 MMB/D (or 13,9 MMB/D including natural gas liquids) by 1985 and would begin to decline in the late 1980's. . If world prices fall to $8 per barrel or domestic prices are regulated over a long period, production is never likely to be much above tOday's levels. and will decline again in the early 1980's. Crude production could be as low as 8.3 MMB/D in 1985 under these circumstances_ - This decline will occur because the more expensive en- hanced recovery techniques and some frontier area produc- tion. such as that from Alaska. would not be economic at lower prices. . It is highly uncertain hOw much oil remains to be found and produced: -If reserves are much lower than expected, production could not peak much above historic levels and would decline rapidly thereafter, even at high world oil prices. -It reserves are much higher than expected. oil production could be maintained at least at loday's levels for many years. 9