times that amount of water in processing, retorting, and upgrading. This works out to about 112,000 acre-feet per year. If the oil is refined locally, this requirement will increase to 200,000 acre-feet annually. If in situ methods of retorting were used, this total quantity might be more than doubled. And these are only the direct uses of the industry. In addition, the population and related activities which will grow up around the new industry will consume large quantities of water. Assuming an associated population of 500,000 to 1 million, as much as 200,000 acre-feet annually of indirect uses must be added. We are thus dealing with a total water requirement of the general order of 500,000 acre-feet, stated in terms of consumptive use. Considerably more water than this must be diverted, since consumptive use, by definition, is the difference between the quantity diverted and the quantity returned to the stream. This demand will mature well before the turn of the century. It will, therefore, coincide with the predicted onset of basin-wide water shortages, to which I will refer in a moment. This time of troubles is forecast for about the last decade of the present century.

Moreover, the question of QUALITY is involved. The return flow of effluent from oil shale operations must necessarily be of much lower quality than the water diverted. This pollution can reach serious proportions if atomic blasting is used in preparation for in situ retorting. Many of the aquifers in this area carry a high sodium content, I am told, and this might be rendered radioactive. It is being suggested that the alumina content of the oil shale rocks, carried as dawsonite, and the sodium content, found as nahcolite, be mined and processed in some sort of combination with the recovery of the oil from the shale. Some of the proposed processes for the recovery of associated minerals involve leaching, thus adding to the water contamination problem. The States of the Colorado River Basin have agreed on an apportionment of the water among them in terms of quantity, as I will explain in a moment, but they are still struggling to arrive at an agreement on the allocation of the pollution absorption capability of the Colorado River System. The Secretary of the Interior has final authority to prescribe water quality standards, under recent legislation.

The quality of the water which is now being diverted from the Colorado River for use in Los Angeles, San Diego, and other Lower Basin cities carries more than 700 parts per million of salts, which is 200 parts worse than the Public Health Service standards for drinking water. This is destined to grow to 1,000 parts per million, we are told, quite aside from any consideration of the adverse impart of the oil shale industry on water quality. In addition, we have been having quality problems with Mexico. That nation is increasingly restless about the quality of water reaching it for irrigation in the delta. This has reached a salt concentration approaching 2,000 part per million, has leveled off now at about 1.400. but is destined to become worse as more water is consumed upstream without reduction in the total weight of the solid content returned to the stream.

I now turn to the problem of quantity, and the limitations on supply imposed by the various interstate and international agreements. I have said that the oil shale industry, with its dependent population and associated new industries, can be expected to consume roughly a half million acre-feet of water a year, on a conservative forecast. This will require a diversion of a greater quantity, perhaps a total of 750.000, assuming that a third of the quantity diverted returns to the stream. The finding of water for a new demand of this magnitude in this particular area presents some fascinating, although by no means insuperable, problems. It is quite probable that most companies seeking a water supply for oil shale development regard this as simply a problem of either appropriating water under the laws of Colorado, Utah, or Wyoming, or of buying existing water rights. This, of course, is the first and essential step to acquire water rights which are recognized by the laws of the state in which the water is to be used, but the problem is not quite that simple.

The great hazard to the availability of an adequate supply of water for oil shale development rests in the mortgages which the states of origin of this water have assumed in their various interstate compacts, and which the United States has assumed in its treaty with Mexico. These have the effect of drastically limiting the quantity of water ultimately available for use in Colorado, New Mexico, Utah, and Wyoming.

The most extreme example of this interstate problem is Colorado. This deserves particular examination in view of the fact that the richest of the oil shale reserves appear to be in the Piceance Basin, which is within the watershed of the White River, in that State. This is one of the five streams originating in the

State of Colorado which flow into the river of that name, and on down to the Lower Basin and Mexico.

Colorado's over-all situation is this: Over 11,000,000 acre-feet annually of the water supply of the Colorado River System originates in the State of Colorado. But about 8 million acre-feet of this apparently abundant supply must ultimately flow out of the State in discharge of compact and treaty commitments to downstream users. Some of these obligations are stated in fixed quantities of acre-feet, some in percentages. The effect, when these percentage commitments are reckoned against the total water supply predicted by most experts, is that less than 3,000,000 acre-feet, less than 25 percent of the 11 million which the State produces, can be permanently used in Colorado. More than 75 percent must ultimately flow out of the State. This burden is expected to fully mature well before the end of this century, at about the time when the new oil shale industry's demand for water is itself maturing on a large scale, Let us see how this has come about.

Three commitments limit the use of water in the four Upper Basin States. In chronological order these are the Colorado River Compact, to which these States and the Lower Basin States of Arizona, California, and Nevada are parties, the Mexican Water Treaty, and the Upper Colorado River Basin Compact. Collectively, they are referred to as the "law of the River," along with several Supreme Court opinions.

The Colorado River Compact was signed in 1922. It is an agreement allocating rights and obligations between the Upper Basin and Lower Basin as blocks. The division point between the two basins is Lee Ferry, in northeastern Arizona. The Compact does not allocate water to individual states. It purports-I use that word for reasons which will appear-to apportion to the Upper Basin and to the Lower Basin, each, the consumptive use of 7.5 million acre-feet annually. It permits the Lower Basin to increase its use by an additional one million. The uses so apportioned or allocated include, by definition, the uses of the waters of the tributaries. Mexico was to be supplied first out of the waters surplus to those required to satisfy these quantities of consumptive use. If that surplus was insufficient, each basin was to contribute one-half of the deficiency. The four Upper States promised not to deplete the flow at Lee Ferry below an aggregate of 75 million acre-feet in each ten year period, and agreed to add to this their half of the Mexican deficiency, if any. It is thus apparent that the negotiators thought that resource, after supplying the Mexican obligation Upper States, exclusive of Arizona's small share. This includes reservoir evaporation of about 700.000 acre-feet, leaving a net supply available for consumptive use of about 5.5 million acre-feet, measured at site of use.

However, this assumes that the Upper Basin will not have to deliver additional water to help satisfy Mexico. The Mexican Water Treaty, ratified in 1945. obligates the United States to deliver 1.5 million acre-feet annually, at the border. Evaporation losses between Lee Ferry and the border, and unavoidable over-deliveries to Mexico, raise the Mexican burden to the equivalent at Lee Ferry of about 1.8 milion acre-feet annually. The Upper States claim, and the Lower States deny, that under the terms of the Colorado River Compact the Lower Basin tributaries can and should contribute to this burden to an extent which relieves the Upper Basin of any obligation to deliver additional water at Lee Ferry for Mexico. If the Lower Basin position were sustained, the 6.2 million acre-foot residue on which the Upper States are counting would shrink to about 5.5 million, but as 700,000 acre-feet of this must be lost in reservoir evaporation. the residue available for consumptive use would be about 4.8 million at site of

use.

To digress a moment, the situation in the Lower Basin, is just as bleak. If the Upper Basin contention about the Treaty burden prevails, and the whole inflow to be counted on at Lee Ferry is only 75 million acre-feet per decade or 7.5 million per year, then only about 5 million of that can be used from the mainstream in Arizona, California, and Nevada. This is because 1.5 million must flow on to Mexico, and another million is lost in transit by evaporation, over and above all contributions by Lower Basin tributaries.

Now to the last of these interstate agreements, the Upper Colorado River Basin Compact. This agreement, made in 1948, gives Arizona 50,000 acre-feet. and divides the residue, whatever it may be, on a percentage basis: Colorado 51.75%, New Mexico 11.25%, Utah 23%, Wyoming 14%.

To take Colorado as the major example, the application of its ratio of 51.75€ to the residue available for consumption at site of use would produce a figure

in the range between about 2.5 and 2.9 million acre-feet, the differences in these quantities being due entirely to the difference in legal assumptions as to the Upper Basin's Mexican Treaty obligation.

Substantially all of Colorado's dependable supply is, or soon will be, committed. The State's Water Conservation Board has tabulated Colorado's "present, authorized, and committed" projects as capable of consuming about 2.4 million acre-feet. Projects now pending in Congress would bring this up to about 2.7 million, measured at site of use. Of this, about 150,000 acre-feet can be identified with oil shale development. If no other projects were authorized, a demand of 2.7 million could be satisfied with a margin to spare of about 200,000 acre-feet, if the favorable assumption is made about the Treaty burden, but would create a deficit of about 200,000, if the Treaty question were answered adversely. Other projects not yet authorized or committed, but in various stages of planning, would add about 500,000 acre-feet to the demand, but there is no long-term supply now available for them. These include about 100,000 acre-feet earmarked for oil shale development.

Let us transpose these factors to the White River Basin, which encompasses the richest of the known oil shale reserves, in the Piceance Basin.

Five major streams flow out of Colorado into other Colorado River Basin States, en route to Lee Ferry. These, from north to south, are the Green, which receives the Yampa just before leaving Colorado, the White, which joins the Green in Utah, the Colorado, the Dolores, and the San Juan (a river which, during its passage through New Mexico, receives a half-dozen streams which originate in Colorado, then itself enters Colorado and flows a very short distance across that State's southwest corner before entering Utah).

The two compacts, Colorado River and Upper Basin, are both silent as to which streams must bear the burden of curtailment of use in Colorado to supply Colorado's neighbors. As to the White River, figures furnished by the State show a "virgin production" of 610,000 acre-feet annually, a present consumptive use of 35,000, and "remaining State Line flow" of 575,000 acre-feet. But if the White is to bear the same proportionate burden of supplying the guaranteed flow at Lee Ferry as Colorado's streams as a whole must bear (77 percent), then, of the White's total "virgin production" of 610,000 acre-feet, only 23 percent, or about 140,000, is permanently available for use in Colorado. Existing appropriations add up to more than that. This is aside from any local interstate contests between water users in Utah, particularly the Ute Indians, and the oil shale industry using White River water in Colorado.

The problem of how to allocate the State of Colorado's compact burdens among that State's streams has not been thought through by anyone as yet, so far as I know. The Upper Basin Compact authorizes an interstate commission to make findings of supply and projected depletions, but this has not been done.

It will be many years before the compact "ceiling" becomes critical. One respectable estimate by the State is the year 2000. Others say later, some say earlier. But collision is inevitable between the total demand, amplified by the oil shale industry, and the compact-restricted supply. The question is simply one of time.

This prospect has prompted Colorado to join California and Arizona in seeking importations into the Colorado from other watersheds. Legislation proposed by Chairman Aspinall of the House Interior and Insular Affairs Committee provides that whenever 2.5 million acre-feet annually is imported, this will relieve both basins of the Treaty burden. In such event, even though this importation would come into the river below Lee Ferry, the Upper Basin supply would be relieved of about 900,000 acre-feet of the potential Treaty obligation, and Colorado's by 51.75 percent of this, or about 460,000 acre-feet. Hopefully, this will occur well before the year 2000. Other features of the bill contemplate the ultimate importation of an additional 2,000,000 acre-feet for the account of the Upper Basin, but this is a long way off.

The conclusion from this discussion of the water budget can be summarized in this way:

First, as to demand. An oil shale industry producing 2 million barrels of oil daily can be expected to require each year the diversion of about 750,000 acrefeet, for direct use plus use by the population and affiliated industries which oil shale development will add to the economy of the Upper Colorado River Basin. Of this, about 500,000 would be consumed, and say 250,000 returned to the river. This return flow, as in all cases of return flow everywhere, will carry

with it some degree of contamination. Such pollution could create a serious problem, locally and interstate. To the extent that it reduces the usability of the river downstream, the impairment may conceivably be characterized as an additional consumptive use, but this is in a sensitive and unsettled legal area.

Second, as to supply. The total lawfully usable supply in the Upper Basin is a good deal less than the total visible supply. This is due to interstate commitments to downstream users. The effect, particularly in Colorado, is that there is not enough uncommitted water available for use in the state of origin to supply the anticipated water requirements of the oil shale industry, and these requirements must be met in large part by the purchase of existing water rights, perhaps reducing the State's agricultural economy in some degree as a partial offset to the benefits to be derived from the new industry. The ultimate remedy, which may well come about, is the importation of several million acre-feet annually into the Colorado River Basin from other watersheds.

Third, as to timing. If the foregoing analysis of supply and demand is even approximately correct, the time of water supply troubles will be the last two decades of this century, which coincides with the anticipated period of vigorous growth of the oil shale industry. It is high time for those interested in the development of an oil shale industry to bring their needs much more actively to the attention of the Bureau of Reclamation and the States concerned. So far, oil shale water requirements have been a vague subject, recognized in words but not in figures in the planning of the region's water budget. When water projects are once built, decisions become literally set in cement and steel. The oil shale industry ought to make its needs known in the planning of the region's water supply structure, rather than in its subsequent remodeling. The reshaping of an economy which is based on already existing uses of water is an expensive and sometimes tragic business.

The sophisticated oil companies have bought up water from agriculture from the State, from the BUREC and have bought reservoir sites. If it takes 1.2 barrels H2O to produce a barrel of oil, it can accurately be predicted today who controls the oil production.

A NEW ERA IN COAL

By Joseph E. Moody, President, National Coal Policy Conference, Inc., to Kentucky Coal Association Annual Membership Meeting, October 7-8, 1966, Lexington, Ky. Gentlemen, the title of my speech today, A New Era in Coal, is not an accident. I do not know when in my lifetime I have felt that I had witnessed and was conscious of such a change in an industry as I have noted in the coal industry in the past year. I believe with the utmost conviction that we must accept the fact that this change has taken place; that we are in a new era and whether we like it or not, our decisions and our plans must be in accordance with it.

I realize that you, as individuals, face individual problems each day that may in some ways make what I am going to say here today appear rather dreamy and unrealistic. However, the impact will certainly be very realistic and the results the same.

This new era of coal will mean that the coal industry will experience its greatest period of sustained growth in the next 20 years. The Nation's demand for energy is insatiable. Every expert, whether in the power industry or in the general study of economics, that I have had the opportunity of listening to, or talking with, agrees that an astronomical amount of fuel must be available to supply our needs for power. There is a great deal of variation and disagreement as to how great the growth and demand will be, but there is unanimity of opinion that it is going to take everything that we can produce to provide the energy and fuel needs of the future of this Nation and of the World.

Quite often I am asked "Well, what about nuclear power; what about breeder reactors, doesn't this mean that uranium will make available an unlimited amount of fuel?"

We would be kidding ourselves if we failed to recognize that nuclear power, barring some completely unforeseen development, is here to stay and will become a major part of the power structure of this Nation. When we realize that there are 21 million kilowatts of nuclear capacity on order, most of which have been placed in the past year, this is indeed real competition, representing as it does the displacement of some 50 million tons of coal annually for the lifetime of these reactors.

In all probability in entering the new era for coal, we are also entering a nuclear power age. While all of the new nuclear plants were being announced, the electric utility industry was also announcing and contracting for coal-fired generating stations at a rapid rate.

I am sure everyone here has seen a copy of Power for People, a brochure which the National Coal Policy Conference published last Spring, in which we listed new coal plants with a capacity of 42 million kilowatts that were under construction and planned by the electric utility companies to be on the power lines of this Nation by 1971. It is interesting to note that since the publication of that brochure in May, 1966, additional coal plants totalling almost 15 million kilowatts have been announced.

These plants under construction will need an estimated 147 million tons of coal annually. Even with the fully recognized fact that other plants will be obsolete and taken off the power systems, this means a very major increase in total coal tonnage for the electric industry in the next four to five years. Sometimes I am aghast at the problem that the coal industry will have in producing the maximum amount of coal it must supply in the next decade or two, and at competitive prices-prices that will give this Nation tremendous amounts of power at low cost.

I think that it is hard for all of us to fully realize, whether we are in the coal industry, or just part of the public, that this Nation is experiencing at this time an "explosion" in the need for energy, and I am now thinking of energy in all forms. To revert to electrical energy for a moment-this year, fuel equivalent of about 360 million tons of coal will be required to generate the power produced in steam electric plants. The Edison Electric Institute reports that between now and the year 2000 the Nation's electric utility system will have to be increased seven fold. This means then on the basis of present efficiency and of known methods of producing power, the total fuel requirement will increase to about two and one-half billion tons of coal equivalent. Even assuming that plant efficiency will be improved and that perhaps new and better methods of generating power may be devised, the fuel demand for electric power alone still staggers the imagination.

It is important for all of us to appraise our position to make sure we are doing our utmost to keep coal competitive and realizing that the situation in the fuel industry which we are facing, will be entirely different both in size and in its nature, to anything that we have known in the past. The pattern which I believe will prevail in the future in the fuel industry has begun to emerge. It is my conviction that the new era in the coal industry means that we are going to have an “energy industry"—an industry to take care of the energy demands of this Nation and with the international aspects that are inevitable, made up of oil, gas, uranium and, of course, the basic fuel of them all- coal.

We are seeing the building of great corporations, which are going to be energy corporations with an interest in practically all forms of energy sources. These companies will, in themselves, develop programs many years ahead and will sell energy in whatever form the customer may desire. I believe we can note several instances of this that have taken place in just the past few years and one that actually took place in the last month.

The acquisition of the Consolidation Coal Company by Continental Oil Company is certainly a step toward the energy company of the future. In formalizing the union between these two great companies, Mr. L. F. McCollum, President of Continental Oil Company said, and I quote "The most important aspect of this acquisition is the tremendous potential for coal and oil working together to meet world-wide demand. It is no longer a question of one source of energy pushing out another source. By 1980 the free world's need for economic sources of fossil energies for electric generation, transportation and other basic industries will be doubled."

George H. Love. Chairman of Consolidation Coal Company saw the significance of the merger in these terms, and I quote again: "Anticipated multiplication of world-wide energy needs dictates the serious responsibility to conserve the sources of energy and to manage our reserves so that they complement each other."

These statements made at the time of the acquisition of Consolidation Coal Company by Continental Oil Company, at a time when one company with its own reserves of oil, gas and uranium added the reserves of coal held by Consol

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