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Published: 1976

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This analysis, an updating of an earlier analysis performed in mid-1974 for the Bureau of Mines, is an assessment based upon available information of the benefits/costs of planned Federal R and D programs in enhanced oil recovery technologies. The primary type of benefit quantified is the national savings to be realized as a result of having cheaper supplementary oil available from enhanced recovery than would be otherwise available under uncertain alternative futures. Alternative types of benefits are also reviewed, including those associated with avoiding more expensive re-entry of stripper wells at a later time, with the balance of payments value of enhanced recovered oil, and with enhanced recovered oil becoming part of a national emergency stockpile. Other benefits unquantified are those associated with insurance and portfolio values. Assuming ''upper tier'' prices ($11.28/Bbl) and a discount rate of 6 percent per year the estimated benefit/cost ratios are: between 3 and 7 assuming that enhanced recovered oil will delay the requirement for more expensive oil from offshore sources, or, alternatively, between 2 and 8 assuming that enhanced recovered oil will delay the requirements for more expensive imported oil. Sensitivity of the benefit/cost ratios to alternative assumptions is illustrated through a number of sensitivity analyses. These analyses indicate that the expected benefits from the development of enhanced oil recovery technology substantially exceed Federal program costs. (DLC).