EXXON (XON) SEES SYNFUELS ROLE BY YEAR 2000

  Development of costly shale oil,
  liquified coal and other kinds of synthetic fuels, halted in
  recent years because of cheap and abundant petroleum supplies,
  will become economic again when world oil prices top 30 dlrs a
  barrel, an Exxon Co USA executive said.
      Joe McMillan, a senior vice president, told Reuters after
  addressing a Houston meeting of the American Institute of
  Chemical Engineers, "By early in the next century, synthetics
  should play a significant role in this country's energy
  supply."
      McMillan also told reporters at a news conference that he
  believed synthetic fuels would become economic to develop when
  world oil prices reached a 30 to 40 dlr a barrel price range.
      "You're talking about a 50 pct increase in crude oil
  prices, but I think that time is coming and we've got to be
  prepared," McMillan said.
      He predicted U.S. oil demand would rise by about one pct
  annually in the next few years while the nation fails to
  replace its oil reserves through exploration. By the turn of
  the century, world oil prices will be significantly higher
  because of declining supplies, McMillan said.
      Ashland Oil, Inc. chairman John Hall, who also spoke at the
  meeting, advocated some form of federal tax incentives to help
  spur development of synthetic fuels.
      The United States, Hall said, has nearly 500 billion tons
  of demonstrated coal reserves, an amount more than triple that
  of all the world's known oil reserves.
      "We must encourage research now in order to make synfuels
  competitive later," Hall said. The average lead time for
  development of a shale oil or liquified coal project is between
  five and ten years.
      Until last year, the federal government had subsidized
  synfuels development through the U.S. Synthetic Fuels Corp., a
  research program created during the Carter Administration with
  the goal of developing replacements for up to two mln barrels
  of oil.
      The corporation was shut down last April when Congress
  refused to continue funding its eight billion dlr budget
  because of uneconomic projects based on forecasts of 50 dlrs a
  barrel oil and 10 dlr per mcf natural gas during this decade.
  

