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Senator Walsh of Montana. And, does the opinion bear the initials indicating the approval of the members of the Board?
Mr. FINXEY. This does not, but I presume the covering sheet does.
Senator Walsh of Montana. What is meant by the covering sheet?
Mr. FINNEY. It is a sheet of paper that is placed over the top, partly to keep the typewriting from smudging, and it is a yellow cover sheet bearing the number and title of the case, and these initials are put on that.
Senator Walsh of Montana. You haven't got that here.
Senator WALSH of Montana. You infer, however, that it did have the approval of the board.
Mr. FIXXEY. Yes, it did have.
Senator Walsh of Montana. Well, then it came before you, Mr. Finney.
Mr. FINNEY. It did.
Senator Walsh of Montana. Does it bear your approval? You signed it, of course. Mr. FINNEY. Certainly, I signed it. Senator KENDRICK. Before you leave that, Senator, please. Senator WALSH of Montana. Yes.
Senator KENDRICK. Under the present best known system of reducing this oil, do you have any information as to what would be considered profit earning shale as to the production? The lowest production of shale that would earn a profit.
Mr. FINNEY. Of course, I am not a technologist, but I do have considerable information.
Senator KENDRICK. You have heard that subject discussed.
Mr. FINNEY. Oh, yes. According to the best opinion of the people in the survey, and other places, there is none of these shales, the richest beds, that it would pay to work at the present time. The cost of mining the shale, either by shafts or through tunnels, and then the putting of that mass through a retorting or heating process, extracting the soluble elements, and then the refining of those soluble elements, would, it is estimated, cost from 2 to $3 a barrel.
Senator KENDRICK. Yes.
Mr. FINNEY. I think the estimate has been from $2 to $1. Now, oil is selling for about $1 a barrel so the loss would be from $2 to $3 a barrel, and that probably on this richest shale.
Senator KENDRICK. We were discussing, a few days ago, the extent of the oil shale fields. Have you any estimate as to what area that is known to include, these oil shale fields?
Mr. FINNEY. Mr. Ely has it. It has been compiled by the Land Office. Shall I read it?
Senator KENDRICK. Yes. Mr. Finney. (reading): The maps prepared by the Geological Survey indicate the following approximate acreage of oil shales in the three States mentioned :
1. 496, 027 Utah
2. 754, 959 Wyoming
4, 006, 805
Senator KENDRICK. Is this particular territory considered the richest of the oil shale territories?
Mr. FINNEY. I think, so far as they have been actually explored and tested, that this Green River formation is considered to have the richest beds. There has not been very much development or testing in either Utah or Wyoming, although there are larger acreages bearing shales in those States.
And another thing, this particular formation here is nearer the railroad. It lies, as Senator Walsh said, north and west of the Glenwood Springs, and that is north and west of the D. & R. G. Railroad, and to the north is the old Moffat road, so that while there is no railroad that actually runs through the land itself it is easier to get in supplies and equipment. Possibly that has occasioned greater interest in those shales. Then, you will recall that under authority from Congress, and with an appropriation made by Congress, there was a test plant put out there, I think near Rifle, Colo., and they made some tests and so forth. So that, the greater activity appears to have been in this particular area. Senator KENDRICK. I recall that.
We had the other day-one of the things that prompted the inquiry—we had the other day a piece of legislation affecting the equities of, I believe, the Northern Ute Indians, on a tract, as I recall, of sixty thousand odd acres. Is that located in the neighborhood of this?
Mr. FINNEY. Yes, it would be in this general vicinity.
Senator GLENN. Senator Kendrick asked you a moment ago whether it would be profitable to work these claims and you stated that in your judgment it would not be now and that it would be a distinct loss. What about that same matter at the time this deci. sion was rendered? Would it have been profitable then?
Mr. FINNEY. No, sir; oil was possibly a little bit higher in price, but even at that time the cost of mining, reducing these shales, and refining the oil therefrom, would have far exceeded the selling price. In other words, there has been no process discovered in this country up to the present time by which these particular shales could be mined, worked, and refined at a profit.
There has been some shale for many years mined and refined in Scotland and, I understand, disposed of at a small profit, but that is due to the high price of gasoline and oils, I presume, in Europe.
Senator KENDRICK. These photographs that you have handed to me suggest that geological formation is an open book.
Mr. FINNEY. Yes, sir; those were photographs taken by the Navy from airplanes in and around the Naval Reserve, which is also in this identical formation, and near to these particular lands, and they give a pretty good idea of the topography of the country and show the exposure of these different beds in the canyons and the sides of the cliffs.
Senator GLENX. What is the total acreage involved in this matter?
Senator Walsh of Montana. The question of the extent of these shales being presented—I feel as if I should make this statement-I find from the report of Mr. Richardson that the Geological Survey tells us there are in Colorado 1,496,027 acres; in Utah, 2,754,959 acres, and in Wyoming, 4,006,805 acres. Mr. Kelley claims, however, that up to the present time we have no information of any value concerning most of this area as to whether the shales contain—what quantity of oil the shales contain, and that there is only a restricted area in the Glenwood Springs neighborhood containing shales that bear a very high percentage of oil and that the lands in question here are within that limited area.
Senator KENDRICK. Well, Senator, maybe the witness can tell us how much of these lands have been filed upon and upon which proof has been made as oil shale lands.
Senator Walsh of Montana. I think he can tell us that, perhaps.
Mr. FINNEY. Do you have that data there, Mr. Ely, the acreage filed on?
Senator WALSH of Montana. I think this gives that.
Senator Walsh of Montana. Let me read this from the opinion of Mr. Richardson [reading]:
It must be clearly understood that these figures are only approximate, and that the acreage thus reported is area acreage, and does not take into account individual portions within such area, which portions may not present or contain oil shales. The actual oil shale acreage is undoubtedly considerably less than the acreage indicated in the above figures furnished by the Geological Survey.
With reference to the Colorado shales, thus estimated, the records of the Department of the Interior disclose that up to the present date, patents have been issued by the United States covering oil shales in Colorado to the extent of 107,263.18 acres. This amounts to approximately 7 per cent of the Colorado oil shale acreage. The records of the Interior Department further show that there are pending oil shale applications for patent aggregating 5,056.89 acres. Under these applications, no patent has yet issued, and it is not yet known whether or when patent will issue.
So far as Colorado is concerned, therefore, the United States appears to have disposed of approximately 7 per cent of its oil shale lands, and about 4 per cent of its oil shale lands are now pending on application for patent.
In the State of Utah the figures of the Geological Survey are 2,754,959 acres. The records of the Interior Department disclose that patents have been granted by the United States for oil-shale lands totaling 65,124.40 acres, or something less than 3 per cent. There are pending applications for oil-shale patents aggregating 9,935.82 acres, or approximately one-third of 1 per cent.
In Wyoming the figures of the Geological Survey estimates the oil-shale acreage as 4,006,805 acres. Of this total acreage the Government has patented oil-shale lands aggregating 3,438.30 acres, or approximately less than one-tenth of 1 per cent in area. There are pending oil shale patent applications covering 7,344.32 acres, or approximately one-fifth of 1 per cent.
The grand total of acreage of oil-shale lands as thus estimated by the Geological Survey, and covering the States of Colorado, Utah, and Wyoming, aggregates approximately 8,257,781 acres. The total acreage of all patents issued from the beginning up to the present date aggregates 175,825.88 acres, or approximately 2 15 per cent of the oil shale lands of the United States. Thus, regardless of the character of administration, alleged evils, shortcomings, or abuses, the United States, during its entire administration of the oil shale lands, has only parted with title to approximately 3 per cent of its estimated acreage, so far as the States of Colorado, Utah, and Wyoming are concerned.
Moreover, the total acreage involved in pending oil-shale patent applications amounts to 75,337.03 acres, or considerably less than 1 per cent of the total estimated oil-shale acreage owned by the United States in the three States referred to.
So that, on the basis of the Geological Survey estimate, the United States still owns, unaffected by patents or applications for patents, approximately 37 per cent of its original oil-shale lands in Colorado, Utah, and Wyoming.
Of course, as conceded heretofore, the estimate of the Geological Survey is only approximate, and it is undoubtedly true that there are thousands of acres included within those estimates which are not properly oil-shale lands, which are lands, embraced in valleys, meadows, and other similar areas, which may not properly be termed oil-shale lands. However, the figures of the Geological Survey thus referred to are the only authoritative approximations which is available.
In any event, these figures give no support to any contention that a large part, or even a proportionately material part, of the oil-shale lands of the United States in the three States mentioned had been in any way lost or disposed of by the United States.
I think that Mr. Kelley in his letters goes into some detail to indicate the high character of the Green River shales as compared with the others.
Senator PITTMAN. It might be interesting to know under what laws those patents were granted.
Mr. Finner. Under the placer mining law.
Senator PITTMAN. Well, were the shales on those patented lands of commercial value?
Mr. FINNEY. If you mean by that whether they could have been mined and disposed of at a profit at the time of the patent, or now, the answer is no.
Senator PITTMAN. They were no different then from the land on which you denied a patent for mineral purposes?
Mr. FINNEY. No.
Senator PITTMAN. So, the Government has disposed of 175,000 acres in patents on lands which in your opinion there was no valid claim to in the locator?
Mr. FINNEY. No; that was not my opinion. I have never held in the world, that I know of, that you had to have an actual commercial discovery of any commodity that you could take out and market at a profit. On the contrary, the department has held that that is not the case, and I cited that in the last decision on the FreemanSummers case, signed by Secretary Work.
In other words, Senator, you might discover a very valuable deposit of gold, if you please, in a remote part of Alaska, so remote that you could not mine it because of the lack of transportation facilities or something of that kind. Nevertheless, it is mineral land and in our view it would be a valuable deposit. In other words, at some future time, if and when they get transportation, it could be taken out and disposed of.
Senator Walsh of Montana. My understanding is that your opinion in this case is predicated upon the proposition that in this particular case there was no discovery on that particular piece of land.
Mr. FINNEY. Yes, sir; they had failed to show a satisfactory discovery on these particular locations,
Senator PITTMAN. Let me see if I get that right. If they discovered those lower deposits on the surface, would that have been a valid location of land, giving 28 gallons to a ton?
Mr. Finney. I have no doubt that if they had exposed some evidence in those locations at that time of this shale bed containing the 28 gallons, that this man would have written up a decision holding the locations valid.
Senator PITTMAN. I am not asking what he would have done. Mr. FIXNEY. And, I would have signed it.
Senator PITTMAN. Well, the upper strata we will say only carried 7 gallons. Mr. FIXNEY. Yes.
Senator PITTMAN. That would not constitute a valid discovery, in your opinion.
Mr. FINNEY. No, sir; I don't say that. I didn't then.
Senator PITTMAN. Well, you say though that it has to lead to something. If you are simply going on discovery, that is one thing, but if you are going to differentiate as to values at the time of discovery, that is another thing.
Mr. FINNEY. We will get into that later, but I will discuss it now if you wish. I am very firmly of the opinion that the old departmental decision rendered by Hoke Smith, in the case of Castle v. Womble (19 L. D. 455), which has been followed down since is absolutely sound law, and moreover I think it is in harmony with not only the letter but the spirit of the mining law, that where minerals have been found and the evidence is of such character as would warrant a man of reasonable prudence in proceeding with the claim with a reasonable prospect of success in developing a paying mine, that that is a sufficient discovery under the mining law.
Senator PITTMAN. Well, under all the geological evidence that you read in this particular case, wasn't it enough to cause a reasonable man to think he could dig down there and get some profit?
Mr. FINNEY. We might have held it even then, but I wasn't satisfied with the showing, and to anticipate a little, Senator, I ordered later on a new hearing, a new trial, at Glenwood Springs.
Senator Walsh of Montana. We are anticipating the course of our inquiry.
Senator PITTMAN. I am just trying to find out how you issued patents for 175,000 acres under the opinion that you just read. I have never read of a shale claim in the United States that could be patented under your decision.
Mr. FINNEY. Don't misunderstand that decision. That decision does not say they must have a deposit which they can immediately market at a profit.
Here is the departmental rule in Narver v. Eastman (34 L. D. 123):
It does not follow that because there is no clear profit arising from the sale of an article that has been manufactured or produced that it therefore has no commercial value. Take for example the farmer. In the course of husbandry it frequently happens that different crops raised by the farmer when put in market do not sell for enough to pay the costs of their production and transportation, but can it be truly said that said crops have no commercial value simply because after the same have been sold and all expenses incident to their production and shipment deducted, there is no clear gain to the farmer, and therefore, as a corollary, that the lands are not valuable for agricultural purposes? And the same may be said as to the entry under this act of land valuable “chiefly for stone." Could not the land be valuable chiefly for stone even though, because of its remoteness from market or other causes, the stone could not then be sold for a remunerative price?