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.