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sufficient capital to erect production facilities which promise an early return on investment, but could not raise the money for extensive research for a period of 10 years, following which additional capital would be required to begin production. It may be that some are willing to begin production now; it may be that others would prefer to wait until better technology is available, but this is a decision that should be made by the marketplace, not the government.

Second, the leasing agreement should provide for deferred high rentals which would be offset by royalty payments. The fee could be deferred for the time necessary to build a facility and begin production. After such period the high rental would act as an economic deterrent to any delay in beginning production. This plan would favor the most rapid development and discourage those who desire only to alienate the land. Thus there could be reliance on market mechanisms rather than extensive government regulation to protect the public interest. Under such a plan the land is most likely to be leased by nonpetroleum companies which do not presently have land but which do have experience in mining technique. This should inject greater competition into the petroleum industry. Third, the land should be leased on the basis of the minerals in the groundnot acreage alone. Thus, in the case of oil the acreage should be sufficient to support a 50,000 barrel a day refinery for a period of 25 years. (In some cases 250 acres would be enough to do this job.)

Fourth, wherever possible the land to be made available should be kept intact and contiguous. This responds to the concern of conservationists who fear despoiling this beautiful country. Also this would allow coordinated development of water and transportation availability which is necessary before the minerals can be marketed.

Fifth, the government also should embark on an intensive research program to develop both the in situ process and technology to extract the sodium and aluminum from the ground. This should be done both by the government itself and through research and development contracts with the best technical groups in the country. Such a program also would benefit those already holding acreage by making available to them freely the best techniques and methods available.

It seems to me that such a program would encourage competitive development of the resources at the earliest possible time, a result highly desirable for both the national and private interest.

Such a program also would remove the uncertainty which many private landholders claim has inhibited private development.

Other alternatives were suggested at the hearings, including a TVA or COMSAT type corporation to proceed with total development of the resource. A public corporation, of course, could work in cooperation with the private corporations already holding land, could assist in meeting some of the practical problems of transportation, water rights, and regional development, as well as serving as a yardstick against which private companies could gauge their activity and be gauged.

There is general agreement that prompt development of these resources is desirable. I hope some of the suggestions I am making may assist in this effort.

EXHIBITS AND APPENDIX

SPEECH OF SENATOR CLIFFORD P. HANSEN, OF WYOMING, ON THE SENATE FLOOR, FEBRUARY 2, 1967

ON THE THRESHOLD OF THE FUTURE: AMERICA'S NEW OIL SHALE DEVELOPMENT PROGRAM

Mr. HANSEN. Mr. President, this is the first time that I have asked for permission to speak on the floor of the U.S. Senate. As one of the most junior men of this great place, this will be my maiden voyage, and I beg the indulgence of you. Mr. President, and those Senators who are here listening to me.

Yet, it is perhaps not inappropriate that a new Senator should be speaking about a new industry that is itself as green as grass. Also, since I come from Wyoming-along with my colleague, the distinguished senior Senator from our State, and my distinguished colleagues from Colorado and Utah-I do claim a particular and a personal interest in the subject of my first Senate speech. Today, Mr. President, I would bring to the attention of the Senate, and I would hope to the attention of the world, the dramatic events that have taken place in the last several months leading to the development of a great new industry for our country. I am speaking of oil shales and of other highly important minerals that have been found in conjunction with these oil shales. So far, these gigantic deposits of oil shale have lain in the ground where they have been of benefit to no man. Some experimentation has been carried on but these experiments have been spotty and inconclusive. Over 70 percent of these oil shale deposits lie on Federal lands and they have been withdrawn from any leasing or development since 1930. The withdrawal of these lands by Executive Order 5327 has so far prevented private enterprise from exercising its initiative in developing these great mineral resources.

Last Friday, the Secretary of the Interior, Stewart L. Udall, announced a five-point oil shale development program. Point 3 of that announcement is the most important, for there Secretary Udall promised-within 60 to 90 daysto issue the administrative details of leasing procedures. The Secretary indicated that at the present time he contemplates a two-stage program broken into a research and development phase and then finally a fully operational phase. Private industry, just as we here in Congress, will be awaiting the Department of the Interior's details on the proposed leasing program. The private sector of our country has awaited such decisions for a long time. Throughout this waiting period, some 30 to 40 years, the private sector has always demonstrated that it possesses the necessary components for a successful development of any particular resource. Today, just as many years ago, our private enterprise system is ready with investment capital, with a basic technology, with management and marketing skills, and most importantly with men and womenall of which amount to a vast storehouse of innovative power necessary for a concerted development effort. My interest here today is to see that private enterprise has not waited in vain. My interest is to help define the terms, if I can, by which private enterprise may properly bring to bear its expertise in resource development.

Before I am finished I would hope to point out to the Senate, if but briefly, the great national and international importance of these resources. Once this importance is realized, I believe we will find near unanimity in the view that development should proceed as quickly and is efficiently as possible. The best means with which to meet those ends will, of course, be the nub of the forthcoming discussion over the Department of the Interior's proposed administrative regulations.

I believe that such discussion is clearly within the purview of the legislative branch of our Federal Government. I have called upon the very able and dis

tinguished chairman of the Senate Interior and Insular Affairs Committee to schedule hearings at the earliest opportunity on this matter. The junior Senator from Utah has also made such a request and hearings are now tentatively scheduled for February 21. I am hopeful that the Senate will assume the leadership in asserting and protecting our national interest in the forthcoming development of this great new industry.

Let me discuss, now, in more specific terms, those aspects of this development which are of national and international concern.

First, we should discuss in more detail the nature of the resource itself. Second, I would like to discuss aspects of national security. Third, I would like to discuss the relationship between foreign trade and foreign aid and the unique position which this oil shale resource plays with respect to each. Fourth, no discussion of oil shale development would be complete without some mention of the balance-of-payments problem. Last, I would like to discuss the role of government in the development of this resource. In the weeks, months, and years ahead, the Federal Congress, the executive branch of the Federal Government, and State and local governments must all be prepared to play an important part in furthering this development.

THE RESOURCE

First, then, let me discuss the resource itself.

In terms of sheer size the oil shales of Wyoming, Colorado, and Utah stagger the imagination. By some estimates there are 1.5 trillion barrels of oil located in the Green River formation of Colorado alone. It has been estimated that 280 billion barrels of oil could be recovered from the richer Colorado formations by using present technology. Compare this to the other known reserves of crude oil: 31 billion barrels in the United States. Suffice it to say that the oil shales of Colorado, Wyoming, and Utah represent the largest untapped source of hydrocarbon energy known to the world.

The potential value of shale oil is indeed staggering. Recoverable oil in the shale deposits of the Green River formation has been valued in the trillions of dollars. On October 22, 1965, the then Senator Paul Douglas introduced a bill in the Senate to provide for the retirement of the national debt, "through royalties from the rich oil shale lands owned by the Federal Government." The Illinois Senator stated then that the oil shale lands in public ownership "are so vast and so valuable as to provide royalties sufficient to pay off the entire national debt when they are developed." Then, just last year Mr. Douglas offered a new proposal, "shale oil for the lamps of learning." This provided that the royalties from oil shale would not only pay off the national debt but also be used to finance a great new national education program. I cite these figures and hypothetical proposals to show how indeed vast this national resource is. But these cited instances point up the basic reality that it does no good to talk of this resource in terms of barrels of oil or in terms of dollars of national debt magnitude. To do so is unrealistic because the resource remains in the ground to this day and the task is still before us. It is up to us in the Government to assist private enterprise in translating those figures from mere figures into dollars. It is up to us to assist in developing a technology which can transform oil shale into shale oil. Only then will this resource be of benefit to this Nation. Fortunately, we are much closer to an economically feasible utilization of this great resource than ever before. Significant discoveries have been made within the past year of a heretofore little known mineral called dawsonite. Dawsonite is an aluminum carbonate and, if preliminary tests which have been recently conducted by private industry live up to the expectations which we now have, this new mineral may be a new and leading source of aluminum in the years ahead. In addition, great quantities of another mineral, nahcolite, which is a sodium carbonate, have been found in conjunction with the Green River oil shales.

So without going into further detail on the experimental phases of these various new minerals, I would only say that it may be, and I emphasize may, that we have turned the cost corner if all three of these minerals, aluminum in the form of dawsonite, sodium in the form of nahcolite, and oil shale, can be developed in conjunction with one another.

NATIONAL SECURITY

Let me proceed to discuss, then, in further detail why development of both oil shale and dawsonite is required in the interests of national security.

First, let me discuss our national energy resources and the part that oil must play in our total energy consumption. According to the U.S. Bureau of Mines the United States was consuming about 55 quadrillion B.t.u.'s per year in 1965. If this were to be translated to an equivalent amount of oil consumed, it would equal about 25 million barrels of oil per day in 1965. The Department of the Interior estimates that this oil equivalent will rise in 1980 to about 42.3 million barrels per day.

While energy consumption estimates, even up to as short a time as 1980, are tenuous at best, some experts are already claiming that the United States is now, or soon will become, an energy-deficient nation. What this means is that the United States must rely upon the importation of energy in order to run its industry. This increasingly heavy reliance on imported energy is a major threat to our national security. Leaders in the petroleum industry have estimated that at least 10 years' leadtime will be required in order fully to mobilize an oil shale industry. This leads me to state that the trend toward growing energy deficiencies must be reversed just as soon as possible. This means that it is incumbent upon us to encourage oil shale development immediately.

If we are to speak from a military point of view, the Department of Defense offers the most reliable and indeed the most startling information. The Department notes that jet fuel has accounted for almost all of the total energy requirement increase with other products remaining on virtually a plateau. As of September 22, 1966, the Department, speaking through J. J. Muir, stated:

"In the last and more recent invitations for domestic jet requirements * * * we are finding it difficult to get adequate coverage. While we know some of the reasons for this, such as returned overseas procurement and increased commercial jet demand, we feel it is important and serious."

Next, Mr. Muir points out that the military demand for fuels is not subject to spasmodic increases or decreases which can be tied to any particular military crisis. He says:

"First, is the ever increasing thirst for oil of our new weapons systems. For example, the First Cavalry Division now operating in South Vietnam consumes fuel three times that of a World War II or a Korean division. Also, the planes and ships of the Seventh Fleet operating off Vietnam, and the Guam-based B-52's supported by KC-135 refueling tankers, require many times the fuel of their predecessors.

"Secondly, and the important key, is the fact that modern military forces, whether on alert, training, or combat, consume substantially the same quantities of fuel.

"This is an interesting concept, one not generally understood, and certainly not a finite tool for future forecast-but the record over the past 17 years gives it a great deal of credibility.

"As a matter of fact, we have seen nothing on the horizon that will significantly change the trend * * *. Information available today indicates that with few exceptions, military equipment will continue to derive energy from liquid petroleum and its products for some time to come.

"And any phase out of petroleum consuming weapons system should be more than offset by new and larger hydrocarbon hungry systems. Examples of these are the C-141 transports now coming into the system and the super C-5 transports scheduled for the 1970's."

In a word, then, it is clear that the energy requirements of our Military Establishment will be steadily increasing over the years ahead whether we be at war or at peace.

A similar situation obtains with respect to aluminum. The United States consumes about one-third of the world output of bauxite, Bauxite, as you know, is our only source for alumina at the present time. Most significant is the fact that about 90 percent of the bauxite used in this country must be imported.

Aluminum is an important key to the structuring of our entire complex economy. The United States has a greater per capita consumption of aluminum than any other country in the world, and the price of that metal has an effect on the price of steel, copper, magnesium, zinc, titanium, fiberglass, plastics, and so forth. Fortunately, the price of aluminum has remained relatively steady over the past few years, but this happy state of affairs is not due in any part to any policy determination by our Federal Government. The basic fact remains that as long as we import over 86 percent of this raw material, we will have no control over the price of it. The copper market has not been so fortunate and we have witnessed the volatile rise or fall in copper caused in large part by political or military developments in foreign countries.

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