| California crude oil supply from domestic sources is expected to decline. On the other hand, California crude oil demand is expected to increase. To determine how soon California will start depending on foreign crude oil, we need to forecast the level of Alaska and California domestic crude oil supply and demand.;Forecast of California domestic crude oil supply requires the forecasts of California crude oil production and supply from Alaska. Future California crude oil production are forecasted with an econometric model that postulates production as a function of reserves and reserves as a function of crude oil prices and exploration and development costs. Future supplies from Alaska are obtained by subtracting forecasts of Alaskan crude oil demand and shipments to the States of Hawaii, Oregon, and Washington, from Alaskan North Slope crude oil production forecasts.;A two stage process was used to forecast future California crude oil demand. In the first stage, we forecasted the demand for refined crude oil products with a single-equation double logarithmic rational expectations dynamic model. In the second stage, the total demands obtained in the first stage were converted into a crude oil equivalent.;We found that the current surplus of domestic crude oil in California will end in 1994. Thereafter, California crude oil imports will sharply increase. |
