A number of legislative and regulatory initiatives being considered to protect the environment could affect the economics of U.S. oil and gas exploration and production (E&P). Not all environmental statutes require the Environmental Protection Agency (EPA) or other regulatory agencies to consider costs and/or energy impacts when establishing regulations or standards. Even when energy impact analyses are performed, they are often limited in scope, because they generally only consider the impacts associated with a specific regulation, and almost always assume no impacts from regulations in other areas. Many have expressed concerns that the cumulative costs of multiple regulatory initiatives could significantly impact U.S. oil and gas operations. This paper summarizes the results of a more comprehensive assessment of the potential cumulative energy and economic impacts of environmental regulatory initiatives on U.S. crude oil supplies (ICF Resources, 1990).

The economic recovery potential of various crude oil resource categories at four constant oil prices -- $16, $20, $24, and $32 per barrel (in 1988 dollars) - was considered in this analysis. Future supplies from four categories of U.S. crude oil resources were evaluated: oil recoverable from the continued conventional production of known onshore Lower-48 fields, oil recoverable from future infill drilling and waterflood projects in known onshore Lower-48 fields, oil recoverable from future enhanced oil recovery (EOR) projects in known onshore Lower-48 fields, and oil recoverable from onshore and offshore crude oil fields remaining to be discovered in the Lower-48 and Alaska (onshore and offshore).

The results of this analysis clearly demonstrate that increased regulations on U.S. crude oil E&P operations can have a significant impact on potential ultimate crude oil recovery. The extent of regulations imposed clearly will determine the level of impact, but the results show that significant impacts are felt over a wide range of regulations, over a wide range of crude oil prices, and at two levels of development for extraction technologies. All resource categories analyzed in the study are impacted by the regulations evaluated.

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