Outlook for the ‘90s : ...

The oil business started the 1980s with gas lines, stalled with a worldwide oil price collapse, accelerated with a wave of megamergers, stalled again when the Exxon Valdez ran aground and is now creeping cautiously into the ‘90s.

In the 1990s, the nation’s demand for energy will confront environmental worries in the wake of the Valdez incident, drilling bans, clean-air laws and concerns about global warming, the so-called greenhouse effect.

Oil prices that fell in 1986 to about $9 should hold at the current $19 or $20 a barrel at least through the early part of the decade. Such prices would help the recovery of an industry still reeling from a decade of restructuring, downsizing and streamlining.

The 1990s could see a modest resurgence of alternative sources of energy--perhaps even a smaller, safer nuclear industry. But most analysts expect continued reliance on oil.

New technology should lead to more efficient energy use and improve production from existing U.S. wells. Currently off-limits areas such as the Arctic National Wildlife Refuge and coastal areas could eventually be opened to exploration.

But few analysts expect U.S. oil production to turn up again, and the U.S. oil industry will become more international, with most exploration and production taking place overseas--especially in Pacific Rim areas.

The big question will be when oil companies can expect the already overdue collapse of the so-called natural gas bubble, or oversupply. New clean-air regulations should increase demand for cleaner-burning gas, which is also used to make methanol and other alternative fuels. That would lead to higher prices--and that would be good news for U.S. companies with sizable reserves.

Because U.S. oil and gas production fell in the 1980s, imports increased, and that has set the stage for a re-emergence of the Organization of Petroleum Exporting Countries as a world force--if it can keep quotas in line.

In any case, national oil companies of countries such as Kuwait, Venezuela and Saudi Arabia will dominate the worldwide industry, analysts say. Those companies will continue moving into the refining and marketing end of the business in the United States and elsewhere.

As the 1980s showed, developments in the oil business can come swiftly and unexpectedly, and analysts are not ruling out price shocks or shortages later in the decade.