The U.S. Geological Survey said today it has located the remains of an ancient coral reef off the East Coast that could contain 2 billion to 15 billion barrels of oil.
The reef structure, similar to that of the newly discovered oil fields off Mexico, funs parallel to the coast from Florida to Canada more than 100 miles offshore.
"We do not know for sure what the oil-bearing potential is," said Dr. William Menard, director of the survey.
"The best bet is that it could be another Prudhoe Bay" -- the nearly 10-billion-barrel field discovered on Alaska's North Slope in 1968.
The Prudhoe Bay field, the most recent "giant" field discovered in the United States, now produces about 1.4 million barrels a day. The nation's total proven reserves, a measure of known oil deposits that can be economically recovered, are now set at 30 billion barrels. By comparison, Saudi Arabia's proven reserves are officially set at more than five times that figure.
Menard's announcement came at a four-hour energy technology conference staged here during President Carter's visit to Atlanta. The president, appearing relaxed and confident, peppered the panel of 10 energy experts, including Menard, with questions, and concluded, "I was acquainted with some of the data before I came . . . some of it was very basic."
A senior administration official said much of the information discussed at the conference had been earlier brought to Carter's attention, and the event's purpose was to demonstrate the president's concern for energy issues.
An aggressive drilling program, along the reef, Menard said, could result in new oil production in eight to nine years. A major oil find could help slow the decline in domestic oil production which, earlier this year averaged slightly more than 8 million barrels a day, about 215,000 barrels less than in 1978.
Exploitation of the reef presents a major technical challenge, however. The formation lies in 6,000 feet of water and beneath another 6,000 feet of sediment. Currently, the oil industry's deepest ocean drilling has been in less than 5,000 feet of water.
Still another hurdle, Menard conceded, is possible environmental opposition to drilling in the deep offshore waters. In the past, the USGS and the Interior Department have withdrawn some deep water tracts from public lease sales out of fear that mud slides -- essentially underwater avalanches -- posed a threat to safe drilling operations.
By December, the Interior Department expects to make a final decision on proposed tracts along the reef that oil companies have said they would be interested in leasing. Menard said the section of the reef just off currently leased tracts in the Baltimore Canyon could contain 1 to 6 billion barrels of recoverable oil.
Menard said the estimates are based on assumptions that the oil could be produced for $15 to $10 a barrel. By comparison, North Sea oil, among the most expensive now produced, costs about $9.50 a barrel, in some instances, but sells for more than $22 a barrel.
The Survey also said the cost of a 12-to-18-month exploration program would run $150 million to $200 million and could be borne by the oil companies under an Interior Department program that allows private industry to drill geological exploration wells offshore.
Still another option would be for the government to contract the drilling and retain production rights.
In an interview after the seminar at Georgia Tech, Menard said the USGS announcement was not geared to the president's conference. It resulted, he said, from a meeting convened two weeks ago at Woods Hole, Mass., of the Survey's leading marine geologists, including Drs. Hollis Hedberg and Betty Field, head of the Survey's oil and gas resource evaluation office in Denver.
"Approaches are now being made to see whether we can divide the cost of exploration," Menard said. He added that the Office of Management and Budget is considering a preliminary proposal to have oil companies share the estimated $70 million expense with the government to outfit the Glomar Explorer to drill offshore.
The Glomar Explorer, constructed by Hughes Tool Co., was used by the Central Intelligence Agency in recovering part of a sunken Soviet submarine some years ago.
The Survey said the reef, formed during the Mesozoic era from 100 million to 400 million years ago, is 20,000 feet thick and 15 miles wide. Menard said Survey geologists belive the Atlantic reef is an extension of the same reef in which Mexico has made massive oil finds in the Bay of Campeche.
Oil fields, such as the giant Mexican site, occur on the sides and above fossil reefs, which trapped plant and animal materials millions of years ago.
Dr. Frank Press, Carter's science adviser, coordinated the seminar which included Energy Secretary Charles W. Duncan, domestic affairs advisers Stuart E. Eizenstat and OMB associate director Elliot Cutler.