The chairman of Exxon Corp., the world's largest oil company, said today the U.S. must embark on a $700 billion synthetic fuels program to end the nation's dependence on foreign oil by the turn of the century.
C. C. Garvin Jr. told reporters that while Exxon has always supported development of a national program to produce oil and natural gas from shale and coal, "You're the first to hear it in really strong terms."
He said he wanted to encourage Congress to pass a program to provide incentives for companies to embark on development of synthetic natural gas and oil.
Exxon is "close to saying yes" to building a plant to produce oil from oil shale in Colorado and will soon begin "semi-commercial" production of natural gas from lignite (low-grade coal) deposits in Texas.
At the minimum, however, it will take six to seven years to get the oil shale plant in production and seven or eight years to embark on commercial gas production in Texas.
Garvin said that if environmental difficulties with coal and nuclear power are overcome and energy demand grows at a slower pace than it has been, "we should make it through the 1980's. But not easily and not without recurring crises."
But by the end of the century, even with increased burning of coal and nuclear power, domestic supplies of oil and gas will be 13 million barrels a day short of U.S. demand. He told the annual meeting of the Securities Industry Association here that to think the U.S. can indefinitely import "more and more oil from a part of the world that is particularly volatile is to deceive ourselves.
"The oil may or may not be available, and even if it is available, the price -- political and economic -- will almost certainly be more than we will want to pay," Garvin said.
Garvin said development of a synthetic fuels industry "offers us the best chance for a successful transition to the age of nondepletable energy (such as solar or geothermal) sometime in the next century."
Garvin said the nation's recoverable reserves of shale could provide 550 billion barrels of synthetic oil, while the equivalent of another 430 billion barrels of oil and gas could be produced from coal reserves, without affecting the amount of coal burned by utilities and other industries.
"We have the necessary resources and technology to get started, and it is something which we can do on our own. To create an industry large enough to fill the gap which I've just described will be neither easy nor inexpensive. But it can be done, and I believe it should be," he told the brokers and investment bankers.
He said that steps must be taken now to begin to build such an industry, because it takes from six to eight years to build a commercial plant that can produce the equivalent of 50,000 barrels of oil each day.
To get enough plants on line to produce 15 million barrels a day would require 300 plants and cost about $700 billion in 1979 dollars, the Exxon chief estimated.