Interior Cuts Estimates of Offshore Oil and Gas Reserves in U.S. by Half

The Interior Department, reflecting dismal results of recent searches for oil and gas off the Atlantic and Alaska coasts, said Wednesday that it has cut in half its estimates of petroleum reserves that remain to be discovered off U.S. shores.

The agency estimated that only 12.2 billion barrels of oil remain to be found off the nation’s coasts, 55% less than when estimates were last issued in 1981. Forecasts of undiscovered natural gas reserves fell 44% to 90.5 trillion cubic feet.

Industry experts discounted the importance of such forecasts, which historically have varied widely. One said the new figures do not include recent oil finds in the Gulf of Mexico, which would have raised the predicted but still undiscovered reserves in that area.

But conservationists said the revisions refute the department’s latest five-year plan for expanded oil and gas exploration off the U.S. coast. That plan, released in March, contemplates oil and gas drilling in environmentally sensitive areas from Alaska’s Bristol Bay to the Georges Bank fishing grounds off New England.

“Offshore (oil) is less of a key part of the nation’s energy program now,” said Sarah Chasis, a senior staff attorney for the Natural Resources Defense Council in New York. “These revised estimates really should raise questions about the need to rush into environmentally sensitive areas when in fact it appears there’s very little oil and gas there.”

Different Techniques Used

A spokesman for Interior Secretary Donald P. Hodel said that it “would be disappointing if the figures turned out to be accurate.”

The new estimate uses different analytical techniques from those employed in the 1981 forecast, although both predictions basically rely on oil production and exploration data to predict the potential for future strikes.

In a report to be released today, the congressional Office of Technology Assessment says estimates of undiscovered reserves are notoriously variable. The new figures, it says, “should be critically considered for both their accuracy and the implications for U.S. energy policy.”

The revisions cut most deeply in areas where oil companies’ exploration efforts have turned up recent strings of dry holes. In Alaska’s Beaufort Sea, long tagged as the nation’s richest oil field, estimates of undiscovered oil reserves dropped from 7.8 billion to 890 million barrels, and gas reserves fell from 39.3 trillion to 3.93 trillion cubic feet. The Office of Technology Assessment said that only one of six exploratory wells in the Beaufort field produced a discovery.

Poor Exploration Record

Oil and gas reserve estimates off the Atlantic Coast were slashed by 87% and 48%, respectively, mirroring a disastrous exploration record in the area since 1981. Recent drilling in the North and Middle Atlantic have yielded only uneconomical quantities of oil.

Estimates of California’s undiscovered oil and gas reserves dropped by 19% and 18%, respectively, but the declines largely reflect the shifting of major 1983 strikes from the undiscovered to the proven reserve category.

In a decade of dry holes, those discoveries make California attractive to oil firms and heighten pressure on Congress to ease drilling bans now in effect off much of the state’s coast. While exploration is largely confined now to the Santa Barbara Channel in Southern California, the Interior Department plan proposes drilling by 1991 along the entire Pacific Coast.

Bill Sessa, a spokesman for California Environmental Affairs Secretary Gordon Duffy, said the state is aware of rising pressure to lift congressionally imposed drilling bans. Interior Department officials have stressed to the state that new offshore oil “must come from all parts of the country,” he said. “But that’s been pretty basic policy all the time.”

An expert for the American Petroleum Institute, the major industry trade group, called the revisions “routine” and not especially significant.

“The statistical base from which the Interior Department drew to revise these estimates downward is not very wide,” said Steve Chamberlain, the group’s director of exploration. “Oil and gas history is replete with examples where companies have drilled 50 to 100 wells someplace before they find major accumulations. . . . As soon as you have a major new discovery offshore, they’ll revise them upward again.”

Chasis disagreed, saying that the figures “represent the current understanding about what’s out there and, to that extent, they’re important.” She said the dwindling reserve estimates should prompt Hodel to focus his agency’s five-year exploration plan on the most promising oil fields instead of leasing vast tracts of ocean bottom for exploration.