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no other reason than that they contain mineral substances, are completely indurated or soliditied and must be mined in the same general manner that lodes are mined.
Limestone deposits have likewise been classified as placers, and the general placer mining law has been subjected to so many interpretations during the last half century that to-day it bears but little semblance to the original law which was made to fit the alluvial gold deposits of California. However, the law governing “ discovery” on both lodes and placers has remained practically unchallenged and unsullied from its very inception in 1866. We therefore maintain that the rule which has held good ever since the beginning of the mining industry in America to the effect that when a locator had found mineral in either rock in place or in gravel, he had made a “discovery,” should still hold good. A prospector has always been considered as having made a discovery when he found mineral and when the evidence was of such a character that a person of ordinary prudence would be justified in the further expenditure of time and money, in the hope of ultimate reward.
Some may argue that the oil shale business is really the oil business and should therefore come under oil regulations, while, as a matter of fact, the only relationship that the shale oil business bears to the well oil business is that in both cases oil is ultimately produced. The oil shale business is strictly a mining and manufacturing proposition and nothing else.
· It is well known, of course, that the oil shales of Colorado, Utah, and Wyoming, at least, are found in what is classified as the Green River series of the Tertiary Period. There is no free oil in these shales and it is conceded by some of our best engineers that they must be mined and treated in a large way, just, for instance, as we would mine and treat huge deposits of low grade copper ore, limestone, and gypsum or any other material that must be handled in a wholesale manner in order to be made profitable. Therefore, taking these opinions as being worthy and well founded, the several streaks or zones of rich shale which enter into the schedule of land classification of the Geological Survey, have no standing as a commercial proposition.
It is entirely untenable to try to set up the claim that a 6-inch horizontal stratum capable of yielding 30 gallons of oil per ton, or of a 12-inch stratum capable of yielding 15 gallons per ton, or of any other one of the various streaks which enter into the Survey's classification, can be mined and treated singly at a profit. Enough of these streaks must be mined together and in one operation so that mining costs may be reduced to a minimum because the cost of mining will vary in accordance with the methods used and the volume produced, whereas the retorting costs per gallon of oil produced from either high or low grade shale will remain fairly constant. According to the accepted logs, the hydrocarbon elements in the shales are, by no means, evenly distributed inch by inch or foot by foot throughout the Green River deposit, but there is enough high grade material present at intervals through the deposit to bring the general average of the whole mass, at least from the surface down to the so-called "Mahogany Ledge,” to a point where its treatment may be profitable.
During the last 10 years, and since the Survey drew up its classification schedule, various individuals and corporations have employed skilled mining engineers and chemists to sample and analyze in vertical section, thick zones of the Green River formation, and these scientists have found that the shales will yield in one certain representative area, in northwestern Colorado, an average of 15 gallons per ton for a total vertical thickness of 525 feet from the surface, and in another place 14.7 gallons for 550 feet from the surface. A rich zone, 50 feet in thickness and included within the above two deep sections, will produce an average of 32 gallons per ton in one place and 36 gallons in another. Assuming that the 525-foot section, running an average of 15 gallons per ton, has been correctly sampled and analyzed, what place in the scheme of things has the Geological Survey's 1 foot that runs 15 gallons? It must be that the Survey had some idea as to the possible commercial value of the shales at the time they framed their schedule, and it would be enlightening indeed if the record were supplied with the reasons, commercial or otherwise, that lay back of the schedule.
If Congress finally threatens to amend the mining law by establishing limitations on discovery, taking as a basis therefor the 15 or the 30 gallon rule of the survey, the mining engineers of the country would ask for nothing easier, in the light of the up-to-date information as to the potential gallonage contained in the shales from top to bottom, than to show up the utter im
practicability of such a schedule as a basis for commercial operation. After all, then, what virtue is there in any schedule of limitations on anything, anywhere, unless it is practical?
As to the geology of the Green River series, it is admittedly made up of stratified sedimentary rock, in place. The entire deposit is homogeneous in character to the extent that it was all laid down under substantially the same physical and climatic conditions and contains more or less hydrocarbon elements or kerogen practially throughout its entire depth. True enough and fair enough, the geologists and engineers who pioneered the shale deposits described the formation as being " composed of beds of oil-yielding shale interstratified with more or less sandstone and oolite." This was not bad for a starter, but it seems that the rather limited Government crews employed during the early stages of their investigation, sampled and analyzed principally the richer and more promising sections of the deposit. This was a perfectly natural thing for them to have done at the time and under the circumstances. Later on, came large companies with their adequately financed crews of technicians who sampled, analyzed, and charted cross-sections of the formation ranging in thickness from a few feet here and there to 2,200 continuous feet in vertical thick
These results have indeed been highly educational and have added much to the store of information gained by the early prospectors, and it is some of this broader and more extended knowledge as to the extent and oil content of the shales, and of even the sandstone partings, that is being continually brought to light. It, therefore, seems safe to venture the opinion that, had the department known in 1913 what is now known concerning the shales, it would have either set up an entirely different book of rules for the guidance of the field men in their classification work or that the entire shale area would have been withdrawn from entry because of its prospective value as a reserve source of oil,
As noted hitherto, it is doubtful if the survey, when it set up its classification schedule, had in mind the question of discovery” at all. The presumption is that wherever the field force could make the schedule work, they did so, and wherever it would not work, they evidently classified the Green River deposit as being valuable for its oil content by geological inference. Wherefore, even if the 15-gallon rule should perchance ultimately be made to apply, should valid shale-land claimants not be allowed to follow the same course of geological inference in making their proof as the Government geologists did in making their classification?
When we come down to the bare facts in the case, a “ discovery" has always been a discovery in just what the word implies, and it should always be thus when considered as the basis of a mineral location, regardless of any schedule of values, pedantic theories, or geological inferences.
Just as in the beginning of any other mining boom, there were those who took the law of discovery as affecting oil-shale placers just as they would have rega rded the same in the case of any other placer and observed it faithfully, while there were others who undoubtedly regarded it lightly. Each class of locations should, therefore, be treated in accordance with its dues, and “ let the chips fall where they may." No attempt is here being made to justify the acts of the bogus or fraudulent locator, but there is an earnest desire on the part of those interested in the general development of the oil shales to assist the legitimate locator who has made his discovery of oil in perfecting his title, realizing as we probably all realize that the patented lands will ultimately form the real basis of the oil-shale industry in America.
That oil shale lands will, sooner or later, become valuable as a source of petroleum is a safe enough prediction, and while it is wholly commendable that the Government has set aside scme of those lands for the use of the Navy, it is inconceivable, even in the face of the growing desire to conserve our natural resources, that any undue hardship should be worked upon the legitimate shale land claimant, or that any laws or regulations,“ discovery or otherwise, should be interpreted in a manner that will deprive the pioneer of his just and lawful mining rights—his vested property rights, if you please the rights which he believed he had at the time he initiated title.
Summarizing, we have the following to offer:
1. The shales under discussion contain no free oil-only the hydrocarbon elements from which oil may be synthesized by distillation.
2. The shales are hard or tough, or both, in accordance with their richness or leanness, and they must be mined in the same general manner as coal, metallic ores, or cement rock are mined.
3. The shales lie horizontally, or nearly so, in most cases, and the potential oil values therein are more or less unevenly distributed in zones or streaks practically throughout the entire Green River deposit, which, at its maximum depth in Colorado, is about 2,600 feet.
4. There is no single streak or bed falling within the classification schedule of the Geological Survey which will probably ever be worked alone and by itself.
5. In order to attain the best results, the shales must be mined in a large way—by mass production methods.
6. Regardless of any question of homogeneity of the Green River deposit, of any argument as to richness here or leanness there, or any differentiation in color, texture, or specific gravity, the whole mass, inasmuch as prartically all of it contains more or less kerogen, should be considered as one workable bed, just as the “porphyry coppers” are treated as one bed whether the mineral values therein run in one place only a trace, in another one-half per cent and in still another two per cent. On the whole, the general copper values which they carry make up a commercial average. Just so will oil shales, if mined as a whole, make up a product of commercial grade when the day of their utilization arrives.
7. Inasmuch as there is so close a relationship between the oil shales and the prophyry coppers in so far as the unequal distribution of values and the consequent necessity for wholesale production in both cases is concerned, there seems to be no need for differentiation between their bases of discovery. Copper ore is basically metallic, of igneous origin and is subject to location under the lode law, while oil shales are of aqueous origin, possess" nonmetallic mineral and are subject to location under the placer act. Certain porphyry coppers have been known to run only a trace at the surface, but they did run that trace and they were taken to patent on that basis. Some of the oil shales at the highest elevation in the Green River series produce only a small quantity of oil, but they do produce oil, and we therefore maintain that the production of oil, be the quantity thereof great or small, is a • discovery " within the meaning of the law.
8. Finally, the question of discovery is one of a practical nature and while it involves the application of a rule of law, such application should not be made in a technical sense but in the manner in which the practical miner out in the hills would apply it. Therefore, every physical and economic fact connected with the entire problem should be carefully considered before any change in law and in precedent governing “discovery” is seriously undertaken. and it is to the end of arriving at the facts in the premises that I respectfully submit this contribution. Faithfully yours,
WM. C. RUSSELL,
Denver, Colo. Secretary FINNEY. May I ask a question or two? Mr. RUSSELL. Yes, sir.
Secretary FINNEY. Do I understand that in your view these oil shale deposits are disseminated throughout the entire formation just as the porphyry copper is disseminated through the Utah coppermine deposits.
Mr. RUSSELL. Not exactly in the same manner.
Secretary FINNEY. In other words, is the oil shale or the oil-bearing content, distributed all the way through this 2,000 feet or does it lie in different beds?
Mr. RUSSELL, It lies in different beds. Just as the porphyry copper lies in different beds excepting where there is brecciation.
Secretary FINNEY. Is not there more or less mineralization all through a formation like that?
Mr. RUSSELL. Yes indeed. You are correct.
Secretary FINNEY. In other words do you follow your mineralization all the way down through?
Mr. RUSSELL. You find your mineralization all the way.
Mr. RUSSELL. Your mineralization is with you all the time and you find it lean here and rich there.
Secretary FINNEY. But all of the bed contains more or less of the oil?
Mr. RUSSELL. Yes. Down as far as the “mahogany" ledge, for 500 or 600 feet, at least.
Secretary FINNEY. What you call the mineralized aream Now, you spoke of the 15 gallons a ton. You do not understand the department has made any decision of that kind in an actual case for patent do you?
Mr. RUSSELL. I understand that before we can get our patents we will be obliged to show 15 gallons.
Secretary FINNEY, Is not that apprehension, rather than based on any actual decision?
Mr. RUSSELL. I will refer that question to Mr. Hawley.
Secretary FINNEY. Mr. Hawley, has the department rendered any decision to that effect?
Mr. HAWLEY. Yes; it has. They have affirmed that discovery in the Freeman case, and in the case of the Empire Mining Co. in Wyoming they rejected the application for patent because they had not met the rule in the FreemanSummers case.
Secretary FINNEY. The Freeman case was not closed yet.
Mr. HAWLEY. But the rule was applied in the Empire case as a precedent. So we have reason to think that has been established as a basis of discovery.
Secretary FINNEY. I do not think there has been any practical rule established. We may have discussed that rule of classification in some decision. This calls also for a further showing. There has been no final decision yet.
Mr. HAWLEY. We are very glad to hear that.
Mr. RUSSELL. It is a fact that we have obtained but two patents in Colorado in over two years?
Secretary FINNEY. That is not due to the rejection. There has been no claim finally rejected by the Secretary of the Interior that I know of. We have had two cases come here, the Empire case and the Freeman case, and after final decisions were made further rehearings have been ordered, so that the department has not laid down a general rule by a decision such as you are discussing.
Mr. RUSSELL. That is the mark that we are shooting at. That is the inference.
Secretary FINNEY. You also suggested a change in the law. Do you know of any recommendation that we have made as to changing the law as to what constitutes discovery? I do not know of any.
Mr. RUSSELL. Well, if the 15 or 30-gallon rule is made to apply I think that law itself will first have to be changed, because I know of no
Secretary FINNEY. You mean if the department would put a restriction or that sort of limitation on what constitutes discovery we would construe the law that way. I understood you to say that there was some proposition to amend the placer-mining law.
Mr. RUSSELL. I suggested
Secretary FINNEY. In other words, I think it is the department's duty and probable intention to administer these claims and decide them under the existing placer law as continued in effect by the general leasing act. That general leasing act continued the old mining law in 'effect as to any claims valid at the time of the passage of the general leasing law and that are properly maintained.
Mr. RUSSELL, Yes.
Secretary FINNEY. So we will go back, then, to look whether compliance was had with the old mining law, whether it be a placer claim or a lode Claim, whether it be coal or potash or phosophate and all that?
Mr. RUSSELL. Yes.
Secretary FINNEY. So I do not know of any proposition to get a new law on the subject.
Mr. RUSSELL. I merely made that reference there. I could not see how the 15-gallon rule could be put through or applied unless there was a new law, unless the old law was amended. I am not a lawyer, however.
Secretary WORK. Neither am I, so I can talk to you. (Laughter.] Isn't it that you are concerned about the regulations that the department promulgated under existing law? Isn't that what you fear?
Mr. RUSSFILL. That is it. I perhaps may have gone a little bit beyond my scope and sphere.
Secretary WORK. No; you did not. That is what I got from your talk.
Secretary WORK. Neither of us being lawyers we can understand each other and that is exactly what I got; that you are anxious about the regulation that
the department will formulate under existing law rather than in the operation of the law itself.
Mr. RUSSELL. Yes, doctor.
Mr. HAWLEY. There may be some misunderstanding by the different branches of this department on that subject, because the field agents require us to show 15 gallons discovery before they will clear list our applications.
Secretary Work. You understand that our agent does not have the right to pass on a mining application?
Mr. CONSAUL. May I ask a question of Mr. Russell before he leaves?
Mr. CONSAUL. I would like to ask Mr. Russell as a mining engineer of experience and wide observation in this particular kind of mining whether or not it is a fact disclosed by experiments thus far conducted that it is advisable from a manufacturing standpoint to mix the leaver shales or oil-yielding materials with the richer ones for the purpose of avoiding manufacturing trouble during the process?
Mr. RUSSELL. I understand that it is available not to attempt to retort the richer beds singly because of the possibility of coking or massing of the shale, it being so very rich. I understand that it is the opinion of some of our best Scotch chemists and retort experts, who have studied the Colorado shales, that a mixture of the leaner with the richer will produce the better results.
Mr. HAWLEY. The next speaker, Mr. Secretary, is Mr. L. H. Larwill, of Denver, Colo., a member of the Denver bar.
Mr. LARWILL. Mr. Secretary, I have with me a statement prepared by Mr. F. A. Goodale, who has been a mining engineer and geologist at work in this field since 1920 in the employ of the Columbia Oil Shale & Refining Co., one of the parties interested for whom I speak. I will file this statement of Mr. Goodale at the close of my argument. But right along the lines suggested by the discussion at the conclusion of the last address, I wish to read just a little from this statement prepared by Mr. Goodale. Mr. Goodale is an engineer who has been practicing since 1902, a graduate of the Colorado School of Mines and one who has been in the shale field continuously since the year 1920, taking many samples and engaged in all of the work in the shale field. Mr. Goodale classifies these oil-shale deposits as syngenetic sedimentary deposits. (Mr. Larwill here quoted at length from Mr. Goodale's statement :)
DEPARTMENT OF THE INTERIOR,
GENERAL LAND OFFICE. In the matter of discovery in oil shale placer claims. Geological statement of
the occurrence of oil shale.
The mining laws of the United States are a system of legal principles which grew out of the customs of miners in the mining camps of California, Nevada, Colorado, and other States, and which principles were later enacted into Territorial, State, and Federal statutes.
These mining customs grew up in mining camps where gold was being mined. Accordingly, the miners' customs, out of which the laws grew, were founded upon gold mining; and whenever these mining laws have been invoked for a new mineral there has been a period of uncertainty in the construction of the laws, which period has continued until courts and land office have accommodated the old principles to the new mineral,
A well-known illustration can be given: A case arose which was decided in 1883 by Secretary Teller under the title of Dughi v. Harkins (2 L. D. 721). Secretary Teller was a well-known mining lawyer. His early practice was in the gold camp of Central City, Colo. In that camp the gold-bearing veins are more or less vertical in position. Therefore the presence of a vein of rich mineral on one claim afforded no proof or even an indication that there was mineral in a parallel claim lying alongside the first claim.
Accordingly, Secretary Teller, with this training, rightly ruled in the Dughi case that when the surveyor general has returned land as agricultural
* The burden of proof is therefore upon the mineral claimant, and he must show, not that neighboring or adjoining lands are mineral in character, or that that in dispute may hereafter by possibility develop minerals in such quantity as will establish its mineral rather than its agricultural character,