|
<br />Missouri Region. Subareas 4A, 7 A, 7D, 7F, 8C, and 8D
<br />in the eastern portion have significant though relatively
<br />smaller resources. Oil and gas fields are shown on
<br />plate 2.
<br />Leveling off of the national petroleum reserves and
<br />the decline in the Missouri Region reserves stem from
<br />several economic and technical factors. Probably the
<br />most direct cause of the decline in the region reserves is
<br />the continuing attraction of offshore exploration in the
<br />Gulf of Mexico and on the Pacific Shelf where impres-
<br />sive discoveries have been made. Low-cost foreign crude
<br />oil is another important reason for reduced exploration
<br />in the region.
<br />Although proven domestic reserves represent only a
<br />10- to 12-year supply, it is unlikely that either the
<br />Nation or the region will exhaust their resources during
<br />the remainder of this century. Furthermore, the advent
<br />of synthetic liquid fuels from coal and/or oil shale seems
<br />certain, adding to the complexities of projecting petro-
<br />leum output. The resource base in the region is assumed
<br />to be capable of providing some further growth of
<br />petroleum output at least to 1980. Beyond 1980, a
<br />marked increase in petroleum production in the region is
<br />not likely and a downturn in output is a distinct
<br />possibility. The reserve picture is not expected to
<br />improve. Thus, petroleum production is expected to
<br />increase moderately through 1980, to top off by 2000,
<br />and to decline thereafter. Meanwhile, proven reserves
<br />will diminish yearly at a moderate rate constantly
<br />narrowing the production-reserve ratio.
<br />In contrast to the petroleum reserve picture, the
<br />coal reserves in the region are very substantial (fig-
<br />ure 11). Missouri Region States have more than 450
<br />billion tons of recoverable coal reserves, or about 55
<br />percent of the Nation's total known recoverable reserves
<br />(recoverable reserves are estimated conservatively by the
<br />Bureau of Mines as one-half of the resource). With the
<br />exception of Nebraska and the small southwestern
<br />section of Minnesota, the other eight states have
<br />substantial coal reserves. North Dakota, Montana, and
<br />Wyoming possess the bulk of the reserves, or at least 350
<br />billion tons of recoverable coal.
<br />The largest consumers of coal in the region are the
<br />steam-electric power generation plants. The market for
<br />coal, as well as for all fuels, is characterized by vigorous
<br />interregional competition in which comparative costs are
<br />all-important-cost of fuels per million BTU, cost of
<br />energy conversion, and cost of electric power trans-
<br />mission. A primary market for coal is assumed to be the
<br />Federal Power Commission's study Areas "L" and "0",
<br />comprising the FPC West Central Region. These areas
<br />include eastern Montana and most of Colorado,
<br />Wyoming, North Dakota, South Dakota, and Nebraska.
<br />Although the Pacific Northwest and other adjacent areas
<br />ultimately may become significant markets for Missouri
<br />region power, competition by Canadian and other
<br />
<br />34
<br />
<br />suppliers and the cost of high-voltage transmission make
<br />study Areas "L" and "0" a more realistic market area.
<br />Fuel requirements supplied by coal have been de-
<br />clining, except for the last several years. The recent
<br />uptrend reflects improvements in coal mining and
<br />transportation techniques, increases in the efficiency of
<br />converting coal energy into electric power, and a rising
<br />number of coal-fired thermal-electric powerplants, espe-
<br />cially in North Dakota near the extensive lignite beds.
<br />According to the FPC, by 1980 the steam-electric
<br />power-generating capacity is expected to be 58.9 percent
<br />of total installed capacity in the Upper Missouri Sub-
<br />region and 67.1 percent of total installed capacity in
<br />Colorado and Wyoming (Area "0"). In the same year,
<br />nuclear plants are expected to comprise 5.5 percent of
<br />the total installed capacity in Area "L" and 8.6 percent
<br />in Area "0". Nuclear capacity is expected to expand
<br />more rapidly beginning about 1980.
<br />The Nation's output of coal was about one-half
<br />billion tons annually during the mid-1960's. Because of
<br />limited regional market demand and other economic
<br />factors, the Missouri Region has supplied only 12 to 15
<br />million tons of coal annually, or about 3 percent of the
<br />Nation's total output. About half of the Nation's output
<br />is consumed by electric utilities while in the region more
<br />than 60 percent of the coal production is so consumed.
<br />Nationally, there are indications that the electric
<br />utility market utilizing coal may have reached a peak.
<br />However, in areas of the region where coal is accessible
<br />at very low cost, some further development of coal-fired
<br />electric utilities is probable. The established utility base
<br />and additional need for coal to feed new, enlarged, and
<br />planned thermal plants may well presage further modest
<br />growth in coal mining activity and orderly development
<br />of the region's coal reserves.
<br />
<br />Because of vast reserves and low cost availability of
<br />Missouri Region coals, it appears that a synthetic fuels
<br />industry not only should develop, but possibly the
<br />region may overcome its handicap of low quality coal
<br />and market isolation to acquire a disproportionately
<br />large share of the national fuels market. Factors that
<br />will determine the timing, location, and size of a possible
<br />nationwide synthetic fuels industry are numerous and
<br />complex. Technology now exists for producing synthetic
<br />liquid fuels, but it is not yet competitive with conven-
<br />tional sources of petroleum products. Moreover, the cost
<br />of conventional petroleum products has been declining
<br />in terms of real dollars since World War II, almost
<br />without interruption. Thus, improvements in synthetic-
<br />fuels techniques must be measured in dramatic propor-
<br />tions in order to overcome petroleum's favorable
<br />competitive position.
<br />Projections of coal output based upon a multitude of
<br />unknowns are not prudent in narrowly defined terms.
<br />However, some broadly based assumptions seem fairly
<br />valid in the mid 1960's and may point the direction of
<br />
|