regardless of how the rock was fractured, whether by hydraulic, electrical, or chemical means or others. It shows that after it is broken up and air recirculated, injection gas would go into the input well, and as the combustion zone moved across the shale would be produced at the adjacent production well. Field tests have been conducted to create fractures in oil shale using water under high pressure, high-voltage electricity, and/or liquid chemical explosives.

IN-SITU RETORTING OF OIL SHALE
INVOLVING CONVENTIONAL
HYDRAULIC FRACTURING.

In one such test in 1964, Sinclair Research used hydraulic pressure to fracture and burners to initiate underground combustion in the shale. This work followed other in situ work by this company that began as early as 1955. Mobil Oil Corp. initiated an in situ test in 1961 and another was started by Equity Oil Co. early last year. The Equity test uses hot natural gas to retort the shale. Details of these tests have not been released.

The major emphasis of the Bureau of Mines in oil-shale research is on in situ methods to recover shale oil. We are continuing to conduct field tests using high-voltage electricity and liquid chemical explosives to create fracture systems. The results to date have shown the feasibility of the techniques. In October of last year a liquid chemical high explosive was injected into oil shale in a zone where the initial fractures were created with electricity. The resulting explosion shattered the sale and increased flow capacity. Testing of the formation is still underway, but in the near future we plan to inject steam into the fractured shale to see if we can recover shale oil.

The explosive fracturing technique will also be tested in gas reservoirs. These tests are being supported financially by the American Gas Association as well as the Office of Naval Petroleum and Oil 80-344-67-pt. 1-7

Shale Reserves because of their interest in the potential of the technique. This support is in addition to the Bureau of Mines appropriations.

Perhaps the most novel concept of creating the necessary fracturing system, and by far the most discussed, utilizes the energy of the atom. In this concept, a nuclear device will be detonated in a suitable section of oil shale. The energy from the explosion is expected to create a huge underground cavity that will fill with broken oil shale as the roof of the cavity collapses. Heat then will be applied to the broken shale to liberate the shale oil. This is one concept of how this might be done on this chart, where the oil recovery well is on the outside of the perimeter of the cavity or chimney and the air and gas are injected into the top of the chimney and retorting progresses downward. There also might be other configurations.

IN-SITU RETORTING OF OIL SHALE INVOLVING NUCLEAR EXPLOSION FOR FRACTURING.

The interest of the Bureau of Mines in using nuclear explosives to stimulate hydrocarbon production began in 1958, shortly after announcement of the Rainier event-the first contained nuclear explosion. Contacts were established with AEC and a Bureau of MinesAEC meeting was held with petroleum industry personnel in Dallas in January 1959. Interest of the industry was not high, because of the lack of knowledge of particle-size range and distribution in a nuclear explosive chimney and uncertainty about retorting a wide particle range in situ. Nevertheless, through the auspices of the American Petroleum Institute, a move was made to form an industry committee to investigate the feasibility of using nuclear explosives to fracture oil shale prior to in situ retorting. The voluntary cessation of nuclear testing in 1959 precluded further industry-Government activities.

During the period of the Geneva test ban negotiations, the Bureau of Mines continued a minimum effort on studies of the application of nuclear explosives to hydrocarbon production. Principal effort was directed to what were and still are considered the simplest casesthe stimulation of production from low permeability, relatively nonproductive petroleum and natural gas reservoirs.

Those efforts, cooperative during the past several years with AEC, culminated (January 31, 1967) in the recent signing by officials of Interior, AEC, and El Paso Natural Gas Co. of a contract to conduct Project Gasbuggy-an experiment to study using a nuclear explosive to stimulate production from a relatively nonproductive natural gas reservoir in the San Juan Basin of northwestern New Mexico. Also under consideration are other nuclear explosive projects to stimulate natural gas production in other marginally productive natural gas reservoirs in the Rocky Mountain basins (Dragon Trail and Rulison); the creation of a natural gas storage reservoir (Ketch); and fracturing rock to permit in situ copper leaching (Sloop).

Efforts continued, however, on the use of nuclear explosives to fracture oil shale prior to in situ retorting experiments under the name of Project Bronco.

About 2 years ago, CER Geonuclear Corp., a firm formed by Continental Oil Co.; Edgerton, Germeshausen, and Grier; and Reynolds Electrical & Engineering Co. (the latter two being prime contractors to AEC on Plowshare experiments), began to contact the petroleum and allied industries concerning an interest in a jointly conducted and financed Government-industry experiment on nuclear explosive, in situ retorting of oil shale. A consortium of 25 companies (these are listed in appendix A) was formed to financially support further investigations and negotiations by CER Geonuclear with Government and industry.

(Appendix A follows:)

APPENDIX A

COMPANIES CURRENTLY PARTICIPATING IN OIL SHALE COMBINE ORGANIZED BY CER GEONUCLEAR CORPORATION

Mr. WATKINS. A draft of the proposed Government-industry contract was submitted by CER to Interior and AEC in early December 1966. Legal and technical personnel of Interior, AEC, and CER met in Washington on January 10, 1967, to informally, discuss terms of the proposed contract. Some objections were voiced by attorneys of Interior to the first draft of the contract, particularly pertaining to matters of land management, antitrust implications, patent provisions, and less important matters.

The reservations voiced by Interior Department attorneys may be grouped for purposes of discussion into four general categories. First, the attorneys perceived public land law problems in the draft agreement arising principally from the fact that the first draft of the agree ment called for disposition among the parties of substantial amounts of shale oil in a manner not permitted by law. The Mineral Leasing Act provides the exclusive method of disposing of leasable minerals (including oil shale), and the several requirements of the act were not incorporated into the agreement.

Second, it was felt that since the draft agreement was drafted as a research and development undertaking, it should have contained patent provisions consistent with the requirements of the President's patent policy statement of October 10, 1963.

Third, some antitrust implications arising principally from patent pooling arrangements, restrictions on the disclosure of information, and restriction on uses of patents by licensees were noted.

Finally, there were several additional problems which we believe were primarily the result of the manner in which the agreement was structured. As drafted, the CER Geonuclear industrial parties and the Government agencies were all cast as parties to the agreement. Some of the provisions respecting internal arrangements among the CER

Geonuclear group were impossible for the Government to subscribe to as a matter of Government contracts law, and others were undesirable from the policy point of view.

It should be emphasized that the draft before us is a first (or at least very early) draft. We understand that the advisability of holding to the original concept of a 25- to 27-party contract has been reconsidered, and that CER Geonuclear is giving some thought to redrafting the agreement to make it a two-party agreement between CER Geonuclear and the Government. We believe that many of our reservations regarding problems such as the requirement of the original draft for the application of Colorado law to the relations among the parties (including the United States) will be met.

We also believe that our reservations about the public land law, patent, and antitrust questions raised by the original draft can be resolved in future negotiations with CER Geonuclear.

In all of our negotiations with industry personnel concerning joint Government-industry research efforts, we have stressed the point that—in any joint venture-industry participation must be open to any company, or group of companies, that was willing to meet the terms of the eventual agreement and pay a proportionate share of the industry expenses. This was true at the Government-industry meeting in Dallas in 1959, during the negotiations leading up to the Rifle lease agreement, and in the recent discussions with CER Geonuclear Corp. and the consortium of industrial companies. On no occasion has an industry spokesman voiced any opposition to this policy.

Additional technical discussions were conducted among Interior, AEC, and CER personnel in Las Vegas, Nev., January 31 through February 2. The present status is that an agreement for a Plowshare feasibility study has been circulated to all parties for final review prior to signing. This agreement is for the conduct of a feasibility study and does not obligate the parties finally to conduct the experiment.

Meanwhile, Bureau of Mines technical personnel, cooperatively with the Geological Survey and AEC, have drilled two exploratory test holes in oil shale in Colorado and one test hole in Wyoming. These holes have been drilled to assist in finding a site that may be suitable for in situ retorting experiments utilizing either nuclear explosives or other means of fracturing the oil shale to obtain the fluid flow required. A final site selection has not been made.

The Bureau of Mines, also cooperatively with AEC, is conducting batch-retorting experiments in a small (approximately 10-ton capacity) retort at the Laramie Petroleum Research Center to investigate the feasibility of retorting blocks, pieces, and fine particles of cil shale such as might be expected to result from a contained nuclear explosion. Additional supplementary research is in progress. An experiment with a simulated (mechanically excavated and loaded) nuclear-explosive chimney is projected for fiscal year 1968 either with (preferably) or without joint industry participation and financing, as a required scale-up experiment preceding an actual nuclear explosive, in situ retorting experiment. With optimum technical experimentation, site selection, and joint Government-industry funding, an actual Government-industry nuclear experiment might be started during fiscal year 1969, with shot date in the fall of 1969.