APPENDIX TABLE 6.-Operating refining capacity of largest petroleum companies, 1951, 1959, and 1966

Source: U.S. Department of the Interior, Bureau of Mines, petroleum refineries in the United States. Information Circulars No. 7613, Jan. 1, 1951, and No. 7647, Jan. 1, 1959; Petroleum Industries Annual, Jan. 1, 1966.

APPENDIX TABLE 7.-Acquisition of independent refining companies by large petroleum companies, 1959-66

1 For the Norwalk Co. which was acquired by Bankline Oil in 1952.
2 New refinery constructed in 1954 with 10,000-barrel-per-day capacity.
3 New refinery constructed in 1954 with 25,000-barrel-per-day capacity.
New refineries constructed in 1957 and 1958.

Source: Federal Trade Commission and Department of the Interior, Bureau of Mines.

APPENDIX TABLE 8.-Number and size of petroleum refining companies and refineries, 1951, 1959, and 1966

Sources: U.S. Department of the Interior, Bureau of Mines, Petroleum Refineries, annual, dated July 8, 1966. Data for 1951 and 1959 are from "An Appraisal of the Petroleum Industry in the United States," U.S. Department of the Interior, 1965, tables 44 and 45.

Sources: Moody's Industrial Manual, 1966; and McGraw-Hill, 1966 National Petroleum News, Fact Book Issue, pp. 169–171.

OIL SHALE IN FOCUS

EXTENSION OF REMARKS OF HON. WAYNE N. ASPINALL OF COLORADO IN THE HOUSE OF REPRESENTATIVES, WEDNESDAY, JUNE 14, 1967

Mr. ASPINALL. Mr. Speaker, in the continuing discussion that has surrounded the proposed development of one of this Nation's great natural resources, oil shale, I have been distressed that the sometimes reckless abandon with which quantitative figures have been used to paint an almost surrealistic picture. It may be pleasing to some eyes, but it has little relation to reality.

In a recent address before the Colorado Petroleum Council's Eighth Annual Meeting in Denver on May 25, 1967, Russell J. Cameron, president of Cameron & Jones, Inc., a widely known and respected firm of consulting engineers with many years experience in the field of oil shale development, addressed himself to this problem of meaningful information.

I recommend this speech to my colleagues with the thought that it will add to the general understanding of this complex subject.

OIL SHALE IN FOCUS

(By Russell J. Cameron)

I know of no topic on the public scene, unless it be Viet Nam, on which there is more ignorance, confused thinking and dogmatic opinion than oil shale-thus the title for my presentation. Maybe the title should be "Oil Shale Out of Focus" because there is no assurance that I can clarify the subject for you. One of the frustrations of those who deal with oil shale every day is that its problems are many sided and so involved, that we so-called experts may be the most confused among you.

I might add that the confusion in the public mind is greatly compounded by all sorts of uninformed individuals and organizations joining the fray, each with some axe to grind or some real or imaginary dragon to kill.

As an example, on April 7, 1967, a press release from the office of the Senate Antitrust and Monopoly Subcommittee began as follows:

"How and when to sell a national treasure-worth almost 20 times the annual federal budget-will be the topic of Senate hearings opening April 18.

""The government owns more than 80 percent of the 10 million acres of this land in Colorado, Wyoming and Utah,' said Hart. 'It contains two trillion barrels of shale oil which conservatively is estimated to be worth $2.5 trillion-or enough for $40,000 for each American household. Its market value may be twice that.'” It is this type of sensationalism that needs to be brought into focus.

GEOLOGY AND RESERVES

The oil shales of importance in the United States are found in the Parachute Creek member of the Green River formation, and were formed as sediments in brackish lakes about 50 million years ago. The organic matter in the oil shale is called kerogen and is not an oil nor is the rock a shale, it is a maristone. Oil is formed by heating the rock to about 800° F. The kerogen decomposes to an oil, gas and a coke-like residue that remains in the spent shale. About 30 percent by volume of average grade oil shale is organic matter.

Our major oil shale reserves are in Colorado, Utah and Wyoming. The areas are well defined and we are confident that the largest reserve is in Colorado's Piceance Creek Basin. Utah has some areas that may be developed at reasonable cost by open-pit mining but much of its oil shale is deeply-buried and cannot be economically produced with technology now available.

Wyoming has only marginal oil shale prospects despite a large area of Green River formation, but additional exploration is needed especially with regard to associated minerals. I will have more to say on these other minerals later.

A figure of 1,744 trillion barrels was given recently for the oil shale potential of Colorado, Utah and Wyoming.' This estimate is based on the 15-15 definition (at least 15 gallons per ton in beds at least 15 feet thick) but such a figure is meaningless since much of this oil is not now nor is likely ever to be economically recoverable. Dr. Wayland pointed out in his testimony that only "about 80 billion barrels of shale oil is considered recoverable by demonstrated mining and retort

1 Dr. Russell G. Wayland, Acting Chief, Conservation Division, U.S. Geological Survey. before the Subcommittee on Antitrust and Monopoly of the Senate Judiciary Committee. April 18, 1967.

ing methods", or less than 10% of the total reserve. According to Dr. Wayland's figures, 21.1% of the reserve is in private hands or a recoverable reserve of about 16 billion barrels.

Eighty billion barrels or even 16 billion barrels is a lot of oil, well worth going after, but these numbers are a far cry from the trillions of barrels that lead people to think in terms of paying off the national debt with oil shale royalties or of the oil shale owners hoarding hundreds of years of oil supply. I am confident that ultimate recoveries of shale oil will be higher than Dr. Wayland's figures but decades will pass before the leaner, less-accessible oil shales become a part of the "recoverable" reserve. Any figures that do not take into account losses and uneconomic low-grade zones are misleading and have done much to confuse the real issues of the oil shale problem.

THE TECHNOLOGY

I would like to dispose of the subject of technology without involving you in details of the various techniques for producing the oil. The two suggested approaches for the recovery of the shale oil are (1) mining/above-ground retorting and (2) retorting inplace or in situ.

Shale oil has been produced for more than 100 years by mining/retorting and this is the only production method in use today. Russia and China both have sizeable industries. Current research and development in the U.S.A. is aimed mainly at improving these earlier mining/retorting techniques and adapting equipment to the job. Good results have been achieved, a sound technology is available and we are now in the prototype phase of testing some of our new ideas. This technology can and probably will be applied commercially by the early 1970's.

The in situ technique has many proponents, among them:

Oil people who would like to apply their background and experience to shale oil production.

Naturalists who look on mining as a despoiler of the aesthetic value of the landscape.

Proponents of nuclear technology who would like to develop peaceful uses for atomic explosions.

Engineers who think there ought to be a better way to get the oil from oil shale than to move hundreds of thousands or even millions of tons of rock every day. All have some logic to support their position, but unfortunately research has not yet come up with a feasible in situ production method. The reasons are sev eral but prominent among them are:

Oil shale has no permeability or porosity and in most areas little or no communication exists between holes even a few feet apart.

The rock must be brought to a high temperature to form oil before it can be produced.

The oil is waxy, viscous and flows with difficulty at ambient rock temperatures. The nuclear concept that seeks by a massive explosion to create a rubble zone of broken oil shale is no cinch to work and the efficiency of oil recovery by a subsequent combustion phase is a question mark. There is a general misunderstanding of the $0.29 per barrel cost for the nuclear approach estimated by Dr. M. A. Lakes of the AEC. Lekas took some highly optimistic assumptions and applied them to hypothetical situations to get some idea of the comparative economics of shale oil production by the nuclear method under various condition. The lowest conceivable figure was $0.29 and even if achievable could be applied only to a limited part of the shale reserve in Colorado and not at all in Utah or Wyoming. Furthermore the costs would likely be considerably higher because ideal conditions are almost never encountered. This figure ($0.29/bbl) was used in congressional testimony to support the idea that oil shale royalties should be as high as possible a classic example of the misuse of information by those with inadequate background in the subject.

Before dismissing in situ retorting entirely let me make clear that an efficient economic in situ shale oil production method is a desirable objective and worthy of research can be developed but I am not optimistic that one will be available by the time we need shale oil. Therefore, it is my belief that shale oil will be produced first by mining and retorting using techniques already in an advanced stage of development and that these methods will be improved still further through

2 Lekas, M. A., "Economics of Producing Shale Oil by the Nuclear In Situ Retorting Method", Third Annual Oil Shale Symposium, April, 1966.

3 Paul H. Douglas, testimony before the Subcommittee on Antitrust and Monopoly of the Senate Judiciary Committee April 19, 1967.