The total demand 3 for petroleum products averaged 15,429,000 barrels daily in 1971, an increase for the year of 3.3 per

cent.

The increase of 3.5 percent reported for domestic product demand in 1971 was the lowest gain reported since 1964. The small increase was attributed to the low level of general economic activity and adverse weather conditions. The fuel oil market continued to benefit in some areas where air quality standards were too restrictive for some coals, and where supplies of natural gas were not available to take over additional markets.

The pipeline from the Middle East to the Mediterranean was reopened at the end of January 1971, and settlements for higher royalties were agreed on by the oil companies and the producing countries, thus eliminating the supply problems and the long tanker hauls around Africa that had existed since May 1970. The resulting surplus of tankers caused a sharp decline in tanker rates, and from April throughout the balance of the year, crude oil imports were at record high levels.

Leasing of areas in the Outer Continental Shelf by the Department of the Interior, as well as the Alaskan pipeline project, were delayed by court order pending solutions to environmental concerns. Permits for placing drilling platforms in the Santa Barbara Channel off the coast of California were denied. Plans for a new refinery and offshore deepwater terminal in Delaware were canceled when the State government passed an ordinance prohibit ing the projects.

The data presented in this chapter are essentially limited to the United States to permit a breakdown and balancing of supply and demand of operations by States and districts. The composition of the dis

tricts used by the Bureau of Mines is explained in a following section.

The increasing volume of natural gas liquids recovered from natural gas has made it desirable to present data on these liquids with the crude oil data, as these liquids are blended with refinery products and are similar to materials recovered from refinery gases. These natural gas liquids are recovered at natural gas processing plants, separate from the oil refineries.

The Bureau of Mines uses crude oil production data (including field condensate) compiled by State agencies for those States that compile the information. Where such data are not available, monthly questionnaires are sent to all pipeline companies operating within the State. Annual canvasses and State agencies also provide supplemental information on the value of crude petroleum at wells, and the number of producing wells.

Individual refineries reported monthly receipts, input, stocks, refinery production, and deliveries. Data on both product stocks at refineries and pipeline and bulk terminal stocks are collected. These data are also published monthly. Annually, sales

1 Industry economist, Division of Fossil Fuels. 2 Statistical assistant, Division of Fossil Fuels. 3 Certain terms as used in this chapter are more or less unique to the petroleum industry. Principal terms and their meaning are

Total demand.-A derived figure representing total new supply plus decreases or minus increases in reported stocks. Because there are substantial secondary and consumer's stocks that are not reported to the Bureau of Mines, this figure varies considerably from consumption.

Domestic demand.-Total demand less exports. New supply of all oils.-The sum of crude oil production plus production of natural gas liquids, plus benzol (coke-oven) used for motor fuel, hydrogen, and other hydrocarbons plus imports of crude oil and other petroleum products. Transfers.-Crude oil conveyed to fuel-oil stocks without processing, or reclassification of products from one product category to another.

All oils.-Crude petroleum, natural gas liquids, and their derivatives.

of fuel oils, asphalt and road oils by uses, and refinery capacity are canvassed.

Demand By Product.-Gasoline.-Domestic demand for motor gasoline in 1971 was 2,195,279,000 barrels, an increase of 83,930,000 barrels or 4 percent for the year. Motor gasoline represents almost 40 percent of the demand for petroleum products. The demand for aviation gasoline continued the decline of the past 13 years. Commercial use of aviation gasoline increased 4 percent to 10,305,000 barrels in 1971, but military use declined 24 percent to 7,589,000 barrels.

Distillate Fuel Oil.-The 4.8-percent increase in domestic demand for distillate fuel oil in 1971 was the largest gain reported since 1968. Demand for the year was 971,320,000 barrels. During the year stronger emission control regulations became effective in some cities which placed additional limitations on the use of coal and residual fuel in the heating, commercial, and light industrial markets. Distillate fuel oil, in most cases, will make inroads into these markets since supplies of natural gas are not available to assume this additional demand.

Residual Fuel Oil.-A 17.2-percent increase in the use of residual fuel oil for the generation of electricity in 1971 more than offset losses in the other use categories so that the domestic demand for residual fuel oil increased 4.2 percent 837,869,000 barrels. Imported residual fuel oil supplied 67.9 percent of the demand

to

requirements in 1971 compared with 67.7 percent in 1970.

Sales of residual fuel for the generation of electric power in 1971 by PAD districts were as follows: PAD district I, 295,151,000 barrels; PAD district II, 17,819,000 barrels; PAD district III, 4,728,000 barrels; PAD district IV, 2,231,000 barrels; and PAD district V, 42,093,000 barrels.

Kerosine.-Warmer than normal weather in addition to the usual loss of heating markets to liquefied gases resulted in a 5.3-percent decline in the demand for kerosine in 1971. The domestic demand for kerosine in uses other than jet fuel was 90,917,000 barrels for the year.

Jet Fuels.-The demand for jet fuel showed some recovery from the low demand reported for 1970, with an increase for the year of 3.7 percent. Domestic demand in 1971 was 366,626,000 barrels (94,733,000 for naphtha-type jet and 271,893,000 for kerosine-type jet). The military used 112,968,000 barrels of jet fuel in 1971, mostly of the naphtha-type JP4 and JP5, compared with 110,087,000 barrels in 1970.

Liquefied Gases and Ethane.-Until the fourth quarter of 1971, domestic demand for liquefied gases was below the 1970 level but rallied enough to show a 1.6-percent gain for the year. Domestic demand for the year was 369,007,000 barrels. Ethane demand increased 4.8 percent in 1971 to 87,744,000 barrels. More detail on liquefied gases and ethane can be found in the "Natural Gas Liquids" chapter.

Reported to the Bureau of Mines.

Other Products.-This category includes refinery gas (still gas) used for fuel, asphalt, petrochemical feedstocks, petroleum coke, lubricating oils, special naphthas, miscellaneous products, road oil, and wax. Refiners used 156,967,000 barrels of still gas for fuel in 1971 and 16,158,000 barrels for petrochemical feedstocks. The domestic demand for asphalt increased 3.3 percent to 158,528,000 barrels (28,823,000 short tons). The demand for petrochemical feedstocks was strong in both the domestic and export market. Domestic demand for the year increased 9.2 percent to 110,521,000 barrels and exports increased 39.5 percent to 5,269,000 barrels. Sales of marketable coke were down 0.7 percent in 1971 because of a decline in exports of 713,000 short tons. Domestic demand for petroleum coke, including 9,365,000 short tons of catalyst coke, was 15,995,000 short tons in 1971, an increase of 3.6 percent. The demand for lubricating oils declined slightly in both the domestic and export market. In 1971, domestic demand was 49,378,000 barrels and exports, 15,768,000 barrels. The demand for special naphthas declined 5.3 percent in 1971 to 31,231,000 barrels. Domestic demand was 29,781,000 barrels, 1,609,000 less than in 1970. Miscellaneous

oils include various specialty oils, medicinal oils, spray oils, and petrochemicals. The demand for these oils in 1971 was 15,943,000 barrels, up slightly from 1970. The demand for road oil in 1971 was 8,487,000 barrels, 12.0 percent less than in 1970. Although exports declined 8.5 percent, the demand for petroleum wax increased 7.7 percent in 1971. Domestic demand increased 14.0 percent to 5,254,000 barrels.

Shipments to U.S. Territories and Possessions.-Domestic demand, as defined in this chapter, refers to demand in all States of the United States. Shipments from the United States to territories and possessions are included with exports. Any foreign receipts into these territories and possessions are not included in the total imports shown.

Shipments from territories and possessions to foreign countries are excluded from exports. Shipments to the United States are included in imports.

Districts.-The Bureau of Mines reports production of crude petroleum and natural gas liquids, and the number of wells drilled, by States. Data for Louisiana, New Mexico, and Texas are also reported by districts.