volved in the Anvil Point-Rifle Oil Shale Station project, submitted suggestions to the Interior Department. I note Interior has them under review, and it would be my hope that some of these industry suggestions, which recognize the difficulties of development, will be included as a part of Interior's policy when it finally is issued.

Senator HART. Well, I am sure that at the end of these 6 days all of us will have a little better appreciation of the things which you highlighted in the statement.

Senator DOMINICK. Mr Chairman, if I may, I would like to just make one more point. We have at the present time a joint effort by private industry, the Atomic Energy Commission, and the Interior Department in the underground nuclear project-Project Gasbuggy-in the Pictured Cliff's formation in New Mexico. This is designed to create an underground cavern, deep underground, by nuclear explosion into which gas is expected to flow into explosion-created fractures. The effects, hopefully, will be to release gas now trapped in the tight formation and increase the recoverability of reserves in that area. There are two similar gas projects that have been suggested, one called Dragon Trail, and one called Rulison, both in Colorado. Project Bronco is now being considered for the same type of thing in oil shale. It is entirely possible that these projects will go forward if Project Gasbuggy is successful. These tests will aid us in determining whether in situ retorting through the use of nuclear explosives is feasible. Among other advantages, a successful in situ method will eliminate waste disposal problems.

This is going to be of enormous significance I think, as time goes on in the development of our technology.

Senator HART. Senator Hansen.

Senator HANSEN. First, may I compliment the distinguished Senator from Colorado for his very excellent statement. I think several points he made certainly could bear a reemphasizing. I think this talk of astronomical figures is rather meaningless, because at the present. time not one dollar has been put into our economy from the sale of oil shale. Isn't that true, Senator Dominick?

Senator DOMINICK. Ábsolutely true, and a good deal of money has been put into the mountains, as they say. More money has gone in than has ever come out. That is the old mining phrase and I think it is still true in oil shale.

Senator HANSEN. I think, too, it would be reemphasizing to point out once more that the bulk of these rich resources are owned by the Federal Government. You spoke about perhaps as much as 85 percent of these deposits are in Federal ownership, so when we talk about monopoly, we are just talking about something that presently is nonexistent. Isn't that right?

Senator DOMINICK. We really have a monopoly by the Federal Government.

Senator HANSEN. That is the only monopoly, and what you are calling for are some guidelines that can be or should be promulgated by the Secretary of the Interior that would be useful in providing some idea to the proper Senate committees as to what regulations might be workable.

Senator DOMINICK. That is exactly right, Senator Hansen. I know of your great interest in this. Obviously your State is intimately in

volved. But over and beyond this I know that you have been following oil shale very closely. I understand the Senate Interior Committee and House Interior Committee have already announced that when the leasing proposals are made and the regulations are drawn up they want to hold hearings to determine their feasibility, practicability, and effect the proposals are going to have on the overall development

program.

Senator HANSEN. That is correct. I would like, if I may, Mr. Chairman, to insert at this point and have made a part of the record, my letter to the Secretary of the Interior, dated March 3, and if I may, I would like to read from that letter.

Senator HART. It will be inserted.

Senator HANSEN. I would like to read a few statements I think bear out some of the points you were making so very well this morning, Senator Dominick. In portions of my letter to Secretary Udall, I said:

I would like to comment on the recision of any public land withdrawal or ders. During your appearance before Interior Committee, I questioned you concerning your plans for the rescinding of both the withdrawal order of 1930 and any further proposed orders. You responded that it was contemplated that these withdrawal orders would be rescinded on a piecemeal basis as new leasing regulations were put into effect. Now, after careful consideration I do not believe that your suggestion is satisfactory. Two problems, I believe, would preclude you from reasonably taking such action.

First, I believe that intolerable legal and administrative burdens would result if withdrawals were rescinded on a piecemeal and arbitrary basis. Exploration permit and lease applications for a wide variety of minerals were covered by the Mineral Leasing Act would be held up pending a status determination of the lands in question.

The second area of concern would arise on the other side of the coin-namely with those parties seeking to acquire a valid interest in our public lands. Private industry could not be expected to come forward with the necessary investment capital and long-range commitments without better assurance as to the availability of these lands. I am afraid that this necessary response by the many industries seeking to develop the multiple resources of this region will be greatly discouraged, if withdrawn lands cannot be clearly and unequivocally returned to an acceptable status.

I would invite your comments on these statements of mine in my letter to the Secretary.

(The letter referred to follows:)

Hon. STEWART L. UDALL,

Secretary of the Interior,
Washington, D.C.

MARCH 3, 1967.

DEAR MR. SECRETARY: Since your appearance on February 21st during the Senate Interior Committee's hearings on oil shale, I have received a great deal of correspondence concerning the proposed withdrawal order affecting oil shale lands filed by the Director of the Bureau of Land Management on January 27, 1967.

Today my Legislative Assistant was in contact by phone with staff personnel in the office of the Director of the Bureau of Land Management. In that conversation we requested that the time for comment on the proposed withdrawal order be extended and that public hearings be held on the question. Let me reiterate here, in writing, that request.

You have no doubt received similar protests from many of the parties who have written to me. After serious consideration and review I believe that these protests are justified. Therefore, I would like to register at this time my formal objection to the proposed withdrawal order published for "comments, suggestions or objections" as F.R. Doc. 67-1118.

I have been told by geologists knowledgeable in this area that the term "oil shale," as used for legal purposes in the proposed withdrawal order, is itself a

misnomer. As you know, shales of varying composition and degrees of oil content are located in many areas throughout the sedimentary basins of our western states. So far it appears that the Geologic Survey of your Department has not yet provided us with a clear description of oil shale that would be suitable for legal purposes. Many people in Wyoming and other affected western states are genuinely disturbed that the proposed withdrawal, if published in its blanket form, would have the effects of withdrawing many other lands than simply those known oil-bearing shales of the Green River Formation. It is strongly felt that this proposed withdrawal, if published without further definition and limitation, would put Wyoming's highly important sodium (trona) and uranium industries in great jeopardy.

To look further down the road a moment, I would like to comment on the recision of any public land withdrawal orders. During your appearance before the Interior Committee, I questioned you concerning your plans for the rescinding of both the withdrawal order of 1930 and any further proposed orders. You responded that it was contemplated that these withdrawal orders would be rescinded on a piecemeal basis as new leasing regulations were put into effect. Now, after careful consideration, I do not believe that your suggestion is satisfactory. Two problems, I believe, would preclude you from reasonably taking such action.

First, I believe that intolerable legal and administrative burdens would result if withdrawals were rescinded on a piecemeal and arbitrary basis. Good faith entries under the mining laws might all suffer under a cloud of uncertainty. The validity of such entries would, of course, be open to serious question depending upon whether or not the subject lands were in a withdrawn or a nonwithdrawn status at the time of such entry. The legal "thicket" which you described to the Senate Interior Committee would, I believe, be made considerably denser by such action. Further, administrative action would come to a standstill. Exploration permit and lease applications for a wide variety of minerals covered by the Mineral Leasing Act would be held up pending a status determination of the lands in question.

The second area of concern would arise on the other side of the coin-namely with those parties seeking to acquire a valid interest in our public lands. Private industry could not be expected to come forward with the necessary investment capital and long range commitments without better assurance as to the availability of these lands. I am afraid that this necessary response by the many industries seeking to develop the multiple resources of this region will be greatly discouraged if withdrawn lands cannot be clearly and unequivocally returned to an accessable status.

Let me say, Mr. Secretary, that I fully appreciate at least some of the complexities of this entire problem. I would add that my thinking is by no means firm on the matter. But this all adds up, I believe, to the necessity for giving further consideration to the withdrawal problem and strongly recommends the advisability of public hearings.

I will look forward to working closely with you on this question and would appreciate hearing your views. With kind regards.

Sincerely yours,

CLIFFORD P. HANSEN,

U.S. Senator.

Senator DOMINICK. I certainly want to say this, Senator Hansen, that you pointed out two of the really critical problems, it seems to me, in proceeding with any speed at all under present policies of the Interior Department.

It strikes me that we have got to have some, perhaps even a multiple, mineral development program. These people have what I conceive at least to be valid claims under the Mineral Leasing Act for their minerals that are intertwined with oil shale. It seems a shame from the country's natural resource position to say that you can't work those minerals because they are inextricably intertwined with oil shale. It doesn't seem fair nor does it seem proper. We have got to move forward, this problem has got to be faced headon, and we should be developing some type of multiple leasing rights in this situation.

I don't know, as a matter of fact, whether we are going to need new legislation for that or not. I don't think so given the present Mineral Leasing Act. I think if you have a commercial discovery of a mineral it is permissible to get a lease which binds not only that particular mineral but whatever others there are with it.

I would have to look into that further. I don't claim to be an expert on that particular point. So, I think that your letter poses some of the major problems with which we are confronted. I would be interested to know what type of a reply you got.

Senator HANSEN. Pardon me?

Senator DOMINICK. What type of reply you got from the Interior Department.

Senator HANSEN. I have not yet received a reply.

Senator DOMINICK. That was dated March 3?

Senator HANSEN. I don't think I have yet received a reply.

Senator DOMINICK. I have had some of those problems myself in the past.

Senator HANSEN. I have no further questions, Mr. Chairman. Thank

you.

Senator HART. Senator Dominick, you emphasized the uncertainty that attaches, absent a developed program for disposition of the leases. That is understandable.

Senator DOMINICK. A proposed program.

Senator HART. Yes. And you emphasized the high percentage of the acreage which is in the public ownership now. We will in the days ahead, develop this more precisely, but is it not true that in Colorado publicly owned lands contain up to about 200 billion barrels of oil equivalent, and additionally that there are known holdings by oil companies of about 165,000 or 170,000 acres with about 30 billion barrels estimated?

Senator DOMINICK. Well, I can't comment on the figures because I don't have them in my mind. I would presume that you got them from very reliable sources, but I would also say those figures do not include any evaluation of whether the oil is 5 gallons per ton or 10 gallons per ton in this particular acreage.

Furthermore, the private holdings are scattered and this creates problems in trying to develop them. We have at the moment one company which has been trying to develop some oil shale process and has been doing, I think, their best to do so. They have some problems and it is my understanding that they are trying to get additional financing now to continue this.

This is a private company, really a consortium that had been in the forefront of trying to develop oil shale, but they are having very serious problems.

Now, the Union Oil Co., as I think you know, has worked on this at their own expense and with their own funds for years, and is not going forward at the present time with their development program. I understand they are waiting to see what the Government is going to do.

I think you can see that any company which locates on the outskirts of the formation-and begins to develop something will find itself in a competitive position which is very, very difficult if the Federal Government suddenly comes along and leases to other companies. Consequently, these companies are reluctant in many cases to move for

ward on the private holdings where they are on the outskirts of the high-grade oil reserve.

Senator HART. The competitive disadvantage that you suggest would be the addition of development costs done prior to the grant of the lease to the competitor? Is that what you mean?

Senator DOMINICK. No. The cepetitive disadvantage would be the fact that the holdings which most private individuals have are not of rich-grade oil shale. Consequently, a company which is getting a lease from the Federal Government later, should be in the middle, the heart of the vein, if you want to put it that way, in mineral technology, as opposed to being on the scattered outskirts of it.

Senator HART. A private holding over a rich part would not under those circumstances, be at a competitive disadvantage against the lessee of the Government

Senator DOMINICK. No, not nearly as much so, but as I say, most of these holdings are scattered. They are in strips. If you just take a look at what the full-scale industry is presumably doing in Russia, they are talking about-in my statement, a modern mine supposedly now under construction capable of processing 33,000 metric tons of shale per day.

Now, even at a lesser figure than that, I think you can see that the scope and scale of this is so broad that acreage sounds good and the number of tons of oil shale sounds good, but at that rate you eat it up awfully fast. Consequently, you have to have a rich vein which will be producing the oil to make it worthwhile because this becomes a wasting asset very rapidly.

Senator HART. Again, we are very grateful to you.

Senator DOMINICK. I thank the chairman and members of the committee. Thank you very much.

Senator HART. Our next witness is one of those hard-nosed economists, I guess, and a very distinguished American. I shan't burden the committee's time this morning to list his many accomplishments, but I shall ask permission that the record reflect them fully in the introduction of Professor Galbraith.

BIOGRAPHY OF JOHN KENNETH GALBRAITH

John Kenneth Galbraith has been a professor of economies at Harvard University since 1949. He has served in Government posts, written non-technical books for the lay public, helped to edit Fortune magazine, was a key figure in the presidental campaigns of Adlai E. Stevenson and an adviser to President John F. Kennedy.

His Government posts include that of economic adviser and assistant to Chester Davis, agricultural member of the National Defense Advisory Committee and director of price controls for the Office of Price Administration. When World Was II ended, he was appointed Director of the State Department's Office of Economic Security Policy which took charge of the economic affairs of Germany and Japan.

Some of his better known books include: “American Capitalism: The Concept of Countervailing Power" (Houghton Mifflin, 1951), "The Great Crash: 1929" (Houghton Mifflin, 1955) and "The Affluent Society" (Houghton Mifflin, 1958)..

STATEMENT OF HON. JOHN KENNETH GALBRAITH, DEPARTMENT OF ECONOMICS, HARVARD UNIVERSITY

Professor GALBRAITH. Thank you very much, Mr. Chairman. My appearance here this morning is related to the fact that I served on