was probably one of our best years as far as conversion efficiency goes.

Then, if you project on through to the year 1980, and I want to say one thing about 1980, right now-1960 is fact, 1970 is fact. We have fundamentally already committed the United States to the energy patterns for the year 1980. We have already ordered most of the major power plants that will be on stream by 1980. We have already started every major mass transportation system that will be functioning by 1980 and the United States this year will buy more passenger automobiles than any year of its history. The largest number of single type of car is apparently going to be the Chevrolet four-door Impala or Malibu with a big engine that reportedly gets about ten and a half miles to a gallon of gasoline.

So we are still committed to these patterns and because of the lead times we are actually quite close to 1980 already.

I will now assemble the display system that was designed for one or two people to use.

This is what you have just seen on the slide painted on plexiglass. It is the year 1960.

Now, again to the same scale, 1970, a 10-year period. And you can see again, if you get a chance to look at it closer, where electricity more than doubled, gas use almost doubled, et cetera.

In 1970 for the first time we can even show a line for geothermal steam and for nuclear. We can also just show a line for the first time for electricity into our transportation sector.

Nineteen-eighty, again to the same scale.

By 1980, you notice we are now about 55 percent loss and about 45 percent use, because of our commitment to the transportation sector and to electric generation primarily.

And then the year 1985, again to the same scale-by 1985, we will be losing about 60 percent and using about 40 percent.

On this chart is the same information just put vertically, in 1960, 1970, 1985. Again keep in mind the whole thing is to scale.

Nineteen-sixty is fact, 1970 is fact, 1980 almost fact. We can do some variables in 1985 but really not too many.

Within the period from 1970 to 1985, the way the United States is going now, we will use more oil and gas in that given 15 year period than we used in our total history up to 1970.

Now, the world as a whole, from 1970 to a little beyond this chart (less than the year 2,000) will probably use more energy in that period than the history of mankind up to 1970.

This situation is really what we are heading into. We are on that exponential curve; and again, as I say, most of this is fact and there is very little projection on this particular part.

Now, to complete this display, we cut the annual affairs at 90 degree angles so you can follow any particular information.

This plexiglass "cross plot", for example, shows the trend of efficiencies over the year. This gives you a pretty graphic way to face the efficiency picture of the years the way we are heading. We can also do such things as examine the growth pattern of the different end use sectors.

For example, if you look-all to scale-the residence areas are

still growing quite a bit, but it is not the electric toothbrushes that is the problem. It is the transportation sector that is beginning to beat us. The residence area is growing just a bit over population growth so far as consumption goes.

Transportation in this 25-year period almost triples so far as the energy consumption goes.

With this type of a tool, if you want to examine, for example, the impact of the 747 versus a SST, that sort of thing, you could determine it fairly rapidly.

This cross-section we put down to emphasize the form of use of the energy, whether it is a liquid, a solid, gas, or electricity. For example, the liquid has to have pipelines, tankers, and refiners, et cetera. The solid has to have railroads. The gas, pipelines; and, electricity wires (copper, and aluminum). In this 25-year period that we are looking at right here, electricity use goes up five times.

The last cross slot is the national supply-demand picture. This is in effect the raw material phase.

This particular display is the raw material source. It gives our oil, gas, coal, et cetera, nuclear, hydroelectric, geothermal projections through the year 1985. We crosshatch the import picture on this one to make that a little more apparent.

That completes the physical model that we used.

Next slide. This is a graph of the last cross plot you just saw.

This is a graph of the last cross plot, with the oil (domestic in solid), imported oils in cross hatch; coal in brown; gas (domestic in solid), in orange, imports in cross hatch-orange; and then the geothermal line, hydroelectric line, the nuclear line all in yellow.

This particular information is about 2 years old. It is a combination of data assembled by Lawrence Livermore laboratories from the National Petroleum Council and the Department of the Interior. Again the great majority of it is fact and short term projections so you really don't have too many variations from different sources.

Now, if you will take this data, take the blank spaces out, put the whole chart together with the imports up on top and convert all scales to a barrel oil equivalent, you will get the next slide.

First, let me explain this form of presentation.

Everything is converted to a barrel of oil equivalent.

In other words, we take the tons of coal, convert it to heat content, then convert into how many barrels of oil we would have to have used for the same energy content. We do the same with gas, the same with nuclear, hydroelectric, geothermal, et cetera.

The chart shown on this slide is in millions of barrels per day oil equivalent.

There are two changes on this chart from the display. First, we have now shown the impact of the Alaska pipeline as if it were to come on stream in 1977.

Without the Alaska pipeline the domestic production will be something along where we show this line, probably a million and a half or two less.

The second change we made to the chart is to show the "surplus oil" capacity that used to exist in Texas, Oklahoma, Louisiana. We have really known that our energy problem was going to stare us in

the face for the past ten, 12 or more years. We just really haven't been willing to face it. We continue to attack our finite fossile fuel

resources.

In other words, the problem just didn't show up in 1971.

We have had a fairly predictable course that we have been following.

The information on this slide is about two years old. If you go to current information, about four months old, we have to correct it. The current estimates of demand, you can see, are now quite a bit higher than they were just two years ago. The nuclear system is not coming into being as fast as we thought it would two years ago.

If you take the curve on the next slide you start focusing on the import question. In 1972, the United States probably spent about $7.5 billion dollars for imported energy.

We do not know exactly what we got back from the multinational oil companies but the best number I can get is at least $3.5 billion dollars from back into the country.

It probably was considerably more than that.

1973 now looks like we are going to go down at least $9 billion for fuels delivered to the U.S.

1975 will see $13 to $15 billion out.

Following this curve, even if you use today's prices and assuming the Arabs will keep selling it to us, both of which I would hate to bet on, by 1980; it is $20 billion and by 1985, our gross outflow exceeds $30 billion. There are some recent projections where people are finally trying to predict what might happen to the cost of foreign oil. Those projections are guessing 1985 from a low of $30 billion to a high of $70 billion.

That is the gut question of what we are really going to have to face as a country.

This part of the presentation completes the present trends on the way we are now going, and the way it appears that we will be going for the next few years.

Next, we start trying to project to the year 2,000. We are trying to project to the year 2,000 for two reasons:

The first reason is that most of our long-range research and development projects that we are working on in this country won't impact before 1985. You have to project beyond 1985 in order to apply the priorities, et cetera, that you need to be applying for our research and development projects.

The second reason we are trying to project further is that it is becoming apparent that one of the main ways we are going to get through the short haul is the willingness that we display now to do things like attack our demand curve.

To have even a half way intelligent projection, there are two items on this curve that will have to be defined by government. When you get through defining that, the engineer-technician types can then examine the rest of the problem and give you some decent ideas of what real options we have.

The first thing that has to be faced is the demand curve. It, of course, is a political bomb. If you depress it too much, you have job problems.

If you keep letting it go unchecked, there is no way we are going to meet it forever.

The second thing which you are going to have to do, the government is going to have to give us an indication as to how much of import and/or shortages are we really going to be willing to tolerate. You can already see what our $7.5 total outflow in 1972 has done to our dollar and a few other things.

Let's assume we get a definition on the demand curve.

Then someone gives us a definition on how much we will tolerate on imports, O.K.?

Then we can give you a series of options to fill the total domestic requirements and you can try balancing those out as to which ones you think are the best and the most acceptable in order to meet the two definitions you have already made.

In order to draw this display, we have talked to a few of our members and in our first exercises we are using a very conservative demand curve. This is not to say that we think we can get this low or we are not recommending it be brought down to this level.

Our present demand growth rate is the solid curve on this slide.

The United States right now is consuming the equivalent of 36 million barrels per day of oil.

Now, to get that in perspective, the State of Texas is producing about 3.5 million barrels of oil per day and is on the decline. The Hoover Dam is about .02 million barrels per day oil equivalent.

To repeat, the United States is consuming today 36 million barrels of oil equivalent.

If we continue on our current demand curve and even drop it one-tenth every 10 years, by the year 2,000, we are going to be in the range of the equivalent of 120 million barrels a day oil equivalent.

There are some projections that take this demand to 130 or even 135.

In the National Petroleum Council's recent predictions, the maximum or desired in order to keep going after the automobile, et cetera, to clean it up as we are, their projection is in the range of 106 million barrels per day oil equivalents.

This next dashed line is the Department of Interior in December 1972. It is also very close to the Office of Science and Technology, April of 1972, that takes you into the mid-90 ranges.

The minimum we have gotten from the four different sources we have been looking at is 88 million barrels of oil equivalent a day.

To be on the safe side where we are trying to depress the demand curve as much as any of these, we are plotting charts now that show a demand curve depressed to 87.5 and lower. That is a 27 percent or more depression from our current growth rate.

In order to get that kind of depression, we will have to get very serious on attacking automobile use, insulation of houses, aircraft use factors, and a whole series of things.

We draw the "demand" curve at 87.5.

Then on imports, we are drawing an imported line that is double the size that some of our members feel to be tolerable to the United States.

We are drawing an import curve that settles in the year 1980 for

96-352 73 pt. 1 49

only $20 billion outflow and then rising about 3 percent a year if we can get the oil.

So we start off depressing demand, taking an import curve larger than we normally would like to see. This leaves us with the smallest amount we can see that must come from domestic sources.

We have now exercised the mathematical model 8 times.

This is the best one. We call it the one that will make everybody equally mad because there is something in it for everyone. It is a very unsatisfactory situation.

I will start from the bottom and go up, keeping in mind that we have already depressed demand to 87.5; and we have already doubled imports over what most people think the dollar will be able to tolerate.

Starting from the bottom coming up. Lower 48 oil is everything except the North Slope that includes South Alaska. This particular curve by the year 2,000 is over 40 percent higher than the latest projections of the Department of the Interior.

In order to get that much domestic oil, we will have to seriously consider things like a 50 percent or more increase in the price of domestic oil.

We will have to go offshore Santa Bara Channel fast; offshore east coast; probably have to triple the operations in the Gulf of Mexico; and, have to double the operations in the western part of the United States. It may be 85 percent predictable that we will get that much out of lower 48 oil.

Now coal. This one you can play any way you want to play it. This display represents a major increase in coal. It could be done by either tripling strip mining and a 50-percent increase on underground or tripling undergrounding and a 50-percent increase on strip mining, or any combination of those you want.

It will probably be limited by water supply, availability of steel to build shovels, and other things of that nature, even if you decide to go that way.

Domestic gas. This assumes an immediate deregulation of both new and flowing gas, trying to keep the gas flow wide open until the early eightie's.

You will probably start depleting the resource toward the year 2,000. Gas is probably the hardest display item to call: maybe

50-50 at best.

Once you have drawn the lines and guidelines on coal, you can project it with 90, 95 percent predictability; but, domestic gas is going to be the hardest one to call.

That particular gas display agrees pretty well with the FPC through 85. Beyond that, it is a little more pessimistic than FPC.

Our operations this past winter in Texas, if anything, must lead us to believe that is probably an optimistic curve.

Next, geothermal. This display would be a massive attack. We are not saying it can be done. This display would require $20 or $30 billion at the least but the end result could be electric capacity equal to 150 Hoover Dams. We don't think we can do it but that will be the impact of that kind of a massive effort going after geothermal.

Hydroelectric. That is a 50-percent increase over today's hydro