If the Carter administration proceeds with plans to decontrol domestic crude oil prices, the reserves of 23 large oil companies will increase in value by at least $300 million, Energy Action, an energy research group, reported yesterday.
In a detailed company-by-company breakdown, Energy Action used Securities and Exchange Commission filings from the firms to determine the amount of proven reserves.
Assuming a constant $20-per-barrel world oil price, the value of those reserves will increase by more than $300 million over last year, the Energy Action Educational Foundation report stated. But if that price goes up to $25 per barrel, the value of those reserves will jump $424 billion, it added.
"Since all of that increased value will ultimately be paid by American consumers in added costs of fuel and of products and goods with fuel and other oil inputs, the added cost of this single portion of U.S. oil supplies alone will be between $1,500 and $2,000 for every person in the nation," Energy Action claimed.
Since the crude oil in question will be pumped out of the ground over many years, it is unclear how much of that added cost will accrue to consumers at any given time, however.
The Carter administration decontrol program is a two-year, phase-in program ending late next year, but Energy Action maintains that its estimates are nevertheless conservative, because "they assume non-rising OPEC price levels rather than the generally expected rising OPEC prices and assume that U.S. prices do not exceed OPEC prices, which will not be the case once the administration's import quota system is applied."
On an annual production basis, Energy Action's study contends that the 23 companies' 1978 crude oil revenues of $17 billion would have increased by almost $25 billion, or 147 percent, at the $20-per-barrel price, and by $35 billion or 206 percent at the $25-per-barrel rate.
"That compares with a total energy cost of about $21 billion in 1970 for the entire nation," the report said.
"These increases are even greater than those resulting from the 1973-1978 world price hikes," Energy Action said, "which saw the average price for a barrel of U.S. oil go from $3.39 per barrel in 1972 to $9 per barrel in 1978, a rise of $5.61 per barrel over five years."
Within a new three-year period, however, that price will go from $9 to $25, an increase of $16 per barrel, the group reported.
TheAMERICAN Petroleum Institute disagreed yesterday with the report.
"Energy Action totally overlooks the purpose of decontrol. Our nation's objective is to reduce our reliance on uncertain foreign sources of crude oil," an API spokesman said.