Looking down into Anvil Points and the Paraho operation. SHALE COUNTRY is provided as a public service by the leaders of the oil-shale industry. Published monthly as a source of information for those interested in industry developments, SHALE COUNTRY is made available to shale-area residents without charge through various community outlets. However, should a reader wish to receive SHALE COUNTRY each month for 12 months through the mail, please send your request to Mountain Empire Publishing, Inc., 231 Detroit St., Denver, Colo. 80206, along with a check for $4.00 to cover costs of postage and handling.

I i SHaLe counTRY Volume 1, Number 3 March 1975

CONTENTS 2 Guest Editorial: The Dollar Signs of Shale 3 Looking Ahead: Feds Focus on Funds-Again 4 A Look At: C-b: Where Flexibility Comes in Handy 7 Situation Report: Paraho: On the Frontier of New Technology

" 10 Community Profile: C" \ ',~~ Vernal: From Dinosaurs to Shale

d f'" '" '" , , t. C 13 Real Estate Corner: ~ :~ ." Got a Permit? I' 14 Newcomers: Bankers Zero in on Shale 15 Environment: A Deep Look into Shale's Watery World 16 Vignette: Shale country interests range from enormous animals (p. 10-12) to tiny animals (p. 4--6) to animals you can't even see (p, 15); and we've Earl Ramsey: White River's 'Easy Driver' got the letters to prove it (p, 19-20). 17 Voice of the People: Facing the Goliaths 19 Letters to the Editor: You and SHALE COUNTRY

m A PUBLICATION OF ~ MOUNTAlNEM:Pl:REPuBusHING,lNc.

PHOTO CREDITS Edward Sc Safford, Publisher and President Front Cover, Paraho; P. 2, Rio Blanco; p. 3, Sen. Haskell's Denver office; p. 4-6, Cob Shale Oil Project; p. 7-9, Carol Edmonds; p. 10-12, Vernal Chamber of Commerce; p. 13, Vernal, Grand Gregory A. Williams, Executive Vice President Junction, Garfield County Building Depts.; p. 15 Rio Blanco; p. 16 White River Shale Proiect; p. Alys Novak, Vice President and Editorial Director 17-18, Carol Edmonds; p, 19-20. Ray Lewis; Inside Back Cover, C·b Shale Oil Project. Richard L. Ronald, Vice President-Sales SHAlf COUNTRY:S: 1975 by Mountain Empire Publishing, Inc. All rights reserved. No par, of this magazine may be Jonijane Paxton, Managing Editor reproduced without written permission of Mountain Empire Publishing, Inr. PubH"hed monthly. Executive and Editorial offices, 231 Detroit St., Denver, Colo. 80206 (303) 388~5931, SHALE Evelyn DiSante, Associate Editor COUNTRY is supplied withoul obligation to residents of Western Colorado and Northeastern Utah and to others outside the shale area with a special interest in the Industry. Third Class Bulk Postage paid at Crystal Lake, IIIlnols. Ray Lewis, Art Director SHALE COUNTRY is sponsored by Ashland Oil, Inc., Atlantic Rkhfield Co., Gulf Oil Corp., Shell Oil Co., Standard Oil of Indiana, SohiD Petrolcum Co .• Sun Oil Co" The Oil Shale Corp. The opinions expressed in this publication Brian Novak, Production Consultant are those of specific individuals and do not necessarily refle<:t the viewpoFnts of the publkation's sponsors or the oU-shale industry as a whole. Kathy Carlton, Circulation Director PostmaJter: Please send all mail, address changes (with old address~ new address and zip cOOe)t sutHcription orders, undeJiw'rabSe copies and form 3S79 to SHALE COUNTRY, 231 Delroit St.~ Denver, Colo. 80206. Carol Edmonds, Grand Junction Editor

Shale Country March 1975 1 Guest Editorial

The Dollar Signs high, we will need a higher price for shale oil. The minimum currently quoted of Shale in industry and government circles is in the $10-$12 per barrel range. This cost is By Walter T. Herget predicated upon going forward in a President smooth uninterrupted effort. Any abnor­ Rio Blanco Oil Shale Project mal inflation or abnormal delay such as happened to the Alaskan Pipeline would obviously escalate the costs. At this point in time, Rio Blanco Oil Many in this business believe it is Shale Project is proceeding with the feasible that a shale industry of some work necessary to complete our final 400,000 barrels per day could exist by the development plan, which we hope to mid-80s. This projection assumes all four submit to the Area Shale Supervisor of federal prototype leases and a few pri­ the Interior Dept. early in 1976. Although vate efforts by various companies would many questions have been raised in re­ reach their stated goals. cent weeks about the economic viability This brings us to another important of shale oil development, we are contin­ economic point: Even with an industry uing with our plans. At some point down of that scale, an $11 per barrel selling the road we will be faced with writing price would keep about $1.6 billion per some really big checks and making some year in this country. If the industry is substantial commitments. We are hope­ allowed to develop and reaches a million ful that many of the questions that exist barrel, the current approximate landed barrels per day, more than $4 billion today in terms of a national energy poli­ price of foreign oil, would be about $200 would stay within our borders. The $25 cy and economic considerations will be million a year. In this category we billion we are currently paying foreign clearer when that time arrives. wouldn't even make the list. countries for their oil is the major con­ We have not made a final decision I make these examples to emphasize tributing factor to the imbalance of pay­ yet on the capacity of our first plant. the huge front-end investment-and the ments that now exists and that is cause However, according to usual industry risk factor in the shale oil enterprise. If for great concern. standards, I will talk in terms of a the federal prototype program is suc­ So, to put it in a nutshell, we must 50,000-barrels-per-day plant. If econom­ cessful and further development occurs, develop oil shale-this important new ics dictate, it could be different. an expenditure of $4 billion over 30 years source of energy. The dream that once The investments necessary for this first may be required to reach a productive was cheap energy has turned into a facility are enormous. It will cost us capacity of 300,000 barrels per day. political and economic nightmare for the somewhere between $600 and $800 mil­ This is where we seem to be today as United States. let's be realistic and not lion for mining, retorting and upgrading far as Tract C-a is concerned. We are let ourselves continue to be trapped into facilities. This is a large capital invest­ confident we can meet reasonable envi­ thinking that energy will ever be artifi­ ment. In terms of size-ranking on the ronmental requirements. We believe we cially cheap again. On the other hand, if Fortune 500 list-the capital value of have the people and the technology to it's going to cost, let's be sure we have these facilities would rank this Tract C-a achieve success. There are, however, control over its availability. enterprise about 175-only about 175 many factors that must be resolved be­ We have made energy mistakes in the manufacturing companies, whole com­ fore the Rio Blanco Oil Shale Project or a past because the goal was to keep ener­ panies, would have larger capital assets. shale industry itself can exist. gy cheap-at any cost. The cost, both in This is for one 50,000-barrel-per-day The number one factor-we have to terms of declining reserves and imbal­ mine and plant. have a return on our investment in terms ance of payments, has become too high. looking at our ranking with the For­ of a fair price for our product. On the Shale oil has a time and a place in this tune 500 as to employment, we would be other hand, what that price must be nation's energy picture. We know where barely in the 500 list. Our sales from the depends largely on the investments we it is and how to get it. We still have a 50,OOO-barrel-per-day facility at $10-$11 a have to make. If the cost curve goes too choice.

2 Shale Country March 1975 .. Loo~n9 Ahead

Lawmakers eye shale require reclamation of mined tracts to told SHALE COUNTRY: "The most ur­ the state-of-the-art or some reasonable gent need in Colorado's oil-shale coun­ .. . for states, requirement." The chances for this bill's ties is still for legislation to allow local passage, however, are uncertain. Harm­ governments to spend their share of the it's taxes, reclamation ston reports that in Utah, "the mood of bonus bids from oil-shale leases on a full the people seems to be against govern­ range of government services and mental regulation"-thus the political facilities ... (Therefore) my chief con­ In the shale-state capitals, state legis­ atmosphere may work against a reclama­ cern in this session is to get the shale lators are homing in on oil-shale devel­ tion law in this session. bonus bid legislation signed into law. opment-so expect at least a few shale­ In Utah, as in Colorado, legislators are "Three times in the 93rd Congress the related bills to come up this year. For looking at shale-related taxes. But Utah, Senate passed my amendment to the Colorado, observers at the state legisla­ true to its strongly pro-shale reputation, Mineral Leasing Act to remove restric­ ture in Denver have predicted that 1975 is conSidering cutting, rather than insti­ tions on how local and state govern­ will be a year for economic issues. One tuting, taxes. Harmston explains that the ments use their share of bonus bids from economic concern in this session should state now has a 3-percent severance tax the lease of federal oil-shale lands. The center on planning funds for shale­ on petroleum, and state officials may measure was bottled up repeatedly in impacted areas in western Colorado; choose "to eliminate severance taxes on the House of Representatives. I have other economic questions will deal with the first million dollars of kerogen pro­ already reintroduced the measure in the shale taxation-especially the pros and duction." Furthermore, Harmston says, cons of a severance tax on resource the state "might mitigate royalties on oil production. According to Jerry Sjaastad, shale produced on state-owned lands. deputy director of the Colorado Dept. of The royalties are now statutory at 12112 Natural Resources, a severance tax bill percent," he adds. "But for shale oil we involving shale will be a major legislative might have a sliding scale from 3 to 12 debate topic this year. percent." As Harmston points out, how­ However, while economic issues may ever, "All this is now just in the talking take the Colorado legislative spotlight in stage. It is still 5 to 10 years before there 1975, environmental concerns will not will be anything to tax." be left behind. In fact, one shale-related bill before the state legislature early this year aimed at amending state reclama­ tion laws. Sjaastad explains that the bill .. . For Feds, would "expand and strengthen mine it's funds-again land reclamation laws" in the state. He adds that the administration of Colo­ At the Congressional level, a key rado's new Governor, Dick Lamm, sup­ thrust, once again, will be to achieve ported the bill, but, Sjaastad continues, wider uses by the states of oil-shale "we would like it even stronger." revenues. Under the federal Mineral In Utah, state legislators are studying Leasing Act of 1920, Colorado and Utah the idea of enacting reclamation laws for are guaranteed 37.5 percent of the lease new Congress. It has been revised the first time. To date, the state of Utah revenues. However, the act specifies slightly, but significantly. It still allows has had no requirements for mine land that the funds can only be spent for the money to be used for all public reclamation. However, Gordon Harm­ schools and roads and cannot be spent purposes, instead of just for roads and ston, director of the Dept. of Natural for general-revenue purposes such as schools as the law now requires. But, in Resources, predicts that a reclamation planning, construction and maintenance addition, it specifies that the money be law will be considered seriously in the of other public facilities and services. spent in the areas that will suffer most of current session. Colorado's Senator Floyd Haskell the impact of oil-shale development." The new bill, Harmston explains, (photo), who has played a key role in the (Additional comments from Sen. Haskell would "set up a commission that will drive to amend this stipulation, recently appear on p. 19.)

Shale Country March 1975 3 C-b:

Where Flexibility Air-quality monitoring equip­ ment gives readouts on varI­ Comes In Handy ous factors to aid researchers in data collection. By jonijane Paxton

Rx for a smoothly-run shale project: an open mind, a lot of know-how and patience.

One thing about being the operators from the site much more convenient. overburden for open-pit mining. Conse­ of a government oil-shale lease tract: The C-a tract, in contrast, is located quently, the ground water around the you have to be flexible. some 20 miles off the same Piceance mining zone could be a potential hazard Take the lessees of the federal Cob Creek Road. in an underground mine. At this time we tract, located in the Piceance Basin in An even more important difference are not sure whether some of the water Colorado. The operator of the Cob Shale between Cob and the other lease tracts is will have to be removed ahead of min­ Oil Project tract is Atlantic Richfield Co., the water-lots of it-that exists in this ing. If some type of mine dewatering is which acts on behalf of the four tract Cob area. Jack Rogers, Development Manag­ required, we will look at all the alterna­ lessees: Ashland Oil, Inc., Atlantic Rich­ er for the Cob Shale Oil Project, points tives of what to do with it." In all proba­ field Co., Shell Oil Co. and The Oil Shale out that aquifers (water-bearing layers in bility, the water would be utilized in the Corp. Atlantic Richfield Co. reports that the earth) lie both above and below the shale oil processing or spent shale han­ many crucial decisions will be coming up rich oil-shale zone. "Right now," he dling and compaction. If any water is in the next few months and years for says, "ground water presents a major discharged, some wastewater treating developing the oil shale on tract Cob. uncertainty and challenge to us-it is may be necessary depending on the And in the meantime, one fact becomes both an environmental and economic water quality. obvious: the lessees must work with an problem. Extensive field work is now open mind, because new information underway to determine what the aqui­ about this emerging industry becomes fers are like-the amount of water con­ Tracking the tract's environment available every day. tained in them and whether there is any But that is a decision for the future. As While the Cob lease tract is, in many communication between the main aqui­ of March 1975, the major activity on the ways, very similar to the C-a tract (see fers and surface water in the area. We Cob tract centers around the environ­ February issue of SHALE COUNTRY), have to figure out a way to protect the mental studies being carried out there. there are some striking differences. First, miners. The lease stipulates that the lessees must the Cob tract is more accessible than the "Currently," he continues, "most collect at least 2 years' worth of environ­ C-a tract. Cob is about 11/2 miles off the considerations indicate that the Tract mental baseline data, and Cob is well two-lane, paved Piceance Creek Road, a Cob ore body is a classic underground into this phase. In January 1975, the Cob fact that will make transportation to and mining situation. There is too much lessees submitted to the Area Oil Shale

4 Shale Country March 1975 - l Supervisor (Pete Rutledge) their first ever the timetable, 2 years' worth of From a bird's-eye point of view, federal quarterly report, a seven-volume compi­ baseline data must be collected for each lease tract Cob stretches below (in above lation of data including contractors' re­ of the environmental baseline studies photo). ports for the period through November defined in the lease-surface water, ment costs. Thus, we are working to­ 30, 1974. In March, the process will be ground water, air quality, flora and fau­ ward submitting our Detailed Develop­ repeated with the second quarterly re­ na, and soil survey and productivity as­ ment Plan in November 1975. Obviously, port being prepared covering December sessment. there are some items we won't be able to 1974, January and February 1975. Anyone In 1975, the Cob lessees will also be describe in great detail because of the interested in seeing any of the data can working on putting together the De­ need for further information. For exam­ contact the USGS Area Oil Shale Super­ tailed Development Plan for the tract. ple, much of the final mine design will visor in Grand Junction. According to Max Legatski, Develop­ be developed after early on-site mining It would be nice for the lessees if the ment Engineering Manager, "This docu­ activities. There is no amount of paper­ environmental baseline data studies ment will indicate what we plan to do on work that can substitute for actual min­ could be tied up into such neat little time the tract in terms of commercial devel­ ing experience-that is the only way to packages-but, as any biologist will opment. The lease requires schedules of really get a feel for the rock properties, point out, that can't be done. Of neces­ the various activities to be conducted ground water.... " sity, some studies must begin in the and a detailed description of procedures summer, some must be done in the to be followed to insure that all of the Inside or outside? winter, and, of course, full-year-round environmental criteria and controls will In tackling the environmental baseline monitoring is also going on. So results be met. The lease also stipulates that we studies, the Cob project was faced with a filter in at different times. For example, must have 1 full year's worth of environ­ difficult management decision-whether water-quality studies got underway in mental baseline data before we can to hire enough personnel to carry out April 1974, so almost a year's worth of submit the development plan. But the the studies themselves or to go to out­ data is available on that sector. However, lease also includes financial incentives side contractors-at a probable greater some of the biological studies did not for early development of the tract-a expense. Says Rogers, "We went over start until later in the year; hence, less direct offset of the last two bonus pay­ these alternatives and thought very seri­ information has come to light. But what­ ments ($23.6 million each) by develop- ously of doing it ourselves, but the staff-

Shale Country March 1975 5 ing requirements were prohibitive over velopment and have made many con­ any trees, must first submit a proposal, the long run-probably about 50 tacts with various Rio Blanco County and and must, of course, clean up the slash. people-and they would only be needed other local people. They are also analyz­ for 1 or 2 years while the studies were ing the microenvironment, archaeology Yet to come: more decisions going on. So we resolved the question (which, to date, has turned up no ar­ Another point the Cob people must by hiring the necessary people to serve chaeologically significant areas on C-bl, remain flexible on is the final selection as a project environmental staff to over­ fish and wildlife management, surface of a mining and retorting technology. see the work. These persons manage the geology, dendrochronology and den­ Since the ore body at the Cob site is deep programs, while outside contractors do droclimatology (tree-ringsl and soils underground (900-1,300 feet) in the rich most of the actual data collection. types and soil productivity, and revege­ Mahogany Zone, any sort of surface "The Development Group staff con­ tation studies. mining procedure is probably ruled out. sists of 14 people, overseeing the areas While the Western Slope may some­ At this time, says Rogers, it appears that of environmental, engineering, land and times feel it lives under a microscope, a conventional underground room and water. For example, Martin Redding, En­ these studies will eventually lead the pillar mining application may be best. vironmental Manager, has a staff of five oil-shale developers to an ecologically The name of this method is self­ environmentalists, each with a definite and historically sound handling of the descriptive, since it is a process of dig­ area of responsibility to oversee work land that bears the oil-shale deposits. ging out large "rooms" of shale in the being done by the contractors." Con­ Indeed, the developers are closely mon­ ore body and leaving in-place pillars as tractors include: Radian Corp. (Austin, itored by various government agencies. supports for overburden. Although the Tex.), EG&G (Albuquerque), and Mar­ For example, they are required to clean room and pillar method does not allow latt & Assoc. (Fort Collins, Colo.)-all air up any site clearing or road work in the for total extraction of the ore since some quality; Colorado River Water Conserva­ midst of the "chained areas" of tract must be left as supports, the size of the tion District and USGS-surface water; Cob. About two-thirds of the Cob area Cob shale deposit will still allow for the Golder and Assoc. (Vancouver, B.C.)­ extraction of a great deal of shale oil. It is mining/hydrology; Woodward-Clyde estimated that the rich oil shale Mahoga­ Consultants (San Francisco)-biology; ny Zone Cob deposit contains enough and Dr. Calvin H. Jennings (Fort CoI­ mineable ore to support a 50,000-100,000 Iins)-archaeology. barrel-per-day shale oil plant for over 20 Rogers remarks that the major con­ years. tractors were encouraged to use as many local experts as possible, people who Outlook: unpredictable but positive were already familiar with the Piceance The economics of the time, which Creek area. Through the Colony Devel­ include an unpredictable inflation rate, opment Operation work that has already plus real rising costs of materials and been completed, Rogers says that the brainpower put the developers into a Cob project was aware of a number of peculiar position. Work is continuing on Colorado scientists who knew the area the leased tracts, but when actual con­ and wanted them "to get involved on the struction is ready to begin, cost predic­ Cob project." Then, Rogers says, there tions in 1975 dollars may be far outdated. are several other contractors who work This was one of the factors that contrib­ on the smaller tasks around the site, plus uted to the Colony Development Opera­ the contract core drilling crews in the tion decision to suspend operations. field. "At anyone time, there can be "However," says Rogers, "we are 20-40 people on the site," says Rogers, One of Cob's smaller residents has a lot of about 2 years away from the point Colo­ "although in the spring and summer a stories to tell about the site's environment. ny was at when its decision was an­ lot more activity is going on." During the nounced. At this time the Cob Shale Oil winter months, however, these person­ Project is about to make its second nel don't all disappear, since some stud­ bonus payment, 40 percent into a $118­ ies, such as the mule deer herd monitor­ was chained-trees and shrubs pulled million commitment. We are in the plan­ ing must be carried out under winter down-several years ago, and the trees ning and evaluation stage, which will conditions. were left on the site to be eventually cut lead to assessing whether the actual pro­ Besides the obvious studies-air and up by woodcutters. This was done as a duction of shale oil from the Cob tract is water quality-the Cob people are also part of a BLM range management pro­ a viable project. We can't say what the carrying on some less apparent ones. gram to clear wooded areas for grass ultimate decision will be-it depends on They are very interested in assessing the growth of grazing land. However, the the economic conditions for oil shale in socioeconomic impact of tract Cob de- Cob people, whenever they want to clear the U.S."

6 Shale Country March 1975 ISituation Report I

Paraho: On the Frontier of New Technology

By Carol Edmonds

Developed after a worldwide search, this process may expand for final test.

Paraho: translated from Portuguese, it means "For the good of mankind." It also could come to mean an economi­ cal, environmentally-acceptable way of coaxing much needed oil from shale. Paraho Oil Shale Demonstration: a 3D-month research and development project located on Colorado's Western Slope. Its backers think the project may open up this nation's huge reserves of oil shale to commercial development. Financial support comes from 17 partici­ pants, including large and small oil com­ panies, as well as utilities, engineering, construction and mining firms. How did they all come together for a $7.S-million project, now at the half-way point? And where do they go from here? The questions are crucial at this time when the United States is anxiously hunting for new sources of energy. And the Paraho Demonstration-if it does indeed reach the goal it is aiming for­ could contribute significantly to the en­ ergy capabilities of the nation.

Around the world to Colorado The 11/z-year-old Demonstration trac­ es its origin to two men, one who initi­ ated a worldwide search for the best oil-shale technology, and the other, an inventor. Their names: Harry Pforz­ heimer, vice president of Sohio Petrole­ um Co., who gave Paraho its structure and financial support; and John B. Jones, Jr., inventor of the Paraho retort­ ing process. From 1966 to 1967, at Pforzheimer's urging, Sohio conducted a worldwide survey of oil-shale information and tech­

Snow-covered raw shale (foreground) is transported first to crusher, then to retort (background).

Shale Country March 1975 7 nologies. Among the finds was jones, a Harry Pforzheimer was named Paraho In February 1974, the pilot retort was chemical engineer who was president of Program Director. As an industry adviser delivered to Anvil Points; it is 60 feet his own engineering firm in Denver. on oil shale to the National Petroleum high and 4112 feet in diameter. The next jones' oil-shale credentials included em­ Council, he is well-versed in the subject. month, March 1974, Paraho erected a ployment by the Bureau of Mines at And Pforzheimer is known in the oil bigger semi-works-sized retort along­ Anvil Points, near Rifle, Colo., in an industry as a tight-fisted company exec­ side the same auxiliary equipment that oil-shale research program conducted utive with a knack for succeeding where supports the pilot retort. More than 10 during the late 40s and early 50s. jones others have failed. jones' firm, DEI, acts times the cross-sectional area of the first also served as a consultant to the gov­ as the operating company for the Paraho kiln, the bigger retort is 75 feet tall and ernment of Brazil on its oil-shale pro­ Demonstration. The Paraho headquar­ 10 112 feet in diameter. May 1974 was a gram in the 50s and continued his private ters are located in Grand junction, while landmark month, when the first shale oil oil-shale research as a principal in Cam­ the retort demonstration operation is at was produced from the smaller pilot eron and jones, Inc., Denver, until he Anvil Points near Rifle, Colo. Paraho retort. formed his own company, Development Thus, with financial backing set, and Engineering, Inc. (DEI). organizational details firm, the Paraho Scaling up to full size? jones, who had invented the Paraho Demonstration was off the launching Encouraged by these preliminary re­ process during the 1960s, caught Pforz­ pad in September 1973. At that time, sults, Paraho has now proposed an ex­ heimer's eye. He became intrigued by engineering of a retort started in Denver pansion of the project, originally sched­ the possibilities of testing the Paraho and preparation to erect it began at Anvil uled to end in February 1976. Still on the process for use in a commercial oil-shale Points. The keystone of the Paraho re­ drawing boards, the proposal would ex­ plant. So, at Pforzheimer's request, torting process is a cylindrically-shaped tend the life of the project to include jones worked out a 30-month project for kiln (or retort), built of low carbon steel building and operating a third, massive such a test. Together Pforzheimer and and installed vertically. Processing be­ retort. Construction could begin as early jones put a $7.5-million price tag on the gins at the top of the retort, which ac­ as 1975, and operations could begin 1 project, which would be carried out at cepts chunks of rock. These eventually year later and would last from 6 months Anvil Points. An oil-shale ghost town emerge calcined or retorted (the heat to 3 years. Cross-sectional area of the since it was closed in 1967, the federal process to extract the oil) at the bottom proposed retort would be about 20 times site provided the basic support facilities of the kiln, unchanged in shape or size. that of the semi-works retort. Approxi­ needed as well as a considerable volume During processing, heat is transferred mate dimensions: 40 feet in diameter of usable equipment. The cost and the from rising gases to the rock. These and 100 feet high. Known as a full-size duration of the project were reduced gases leave the vessel near the top, and, considerably by incorporating the Anvil in the case of oil-shale retorting, carry "X" marks the spot-which, in this case, is a Points facility and equipment into the with them a mist of oil droplets-the raw shale conveyor belt, criss-crossed by a Paraho Demonstration Project. harvest of the process. crane (background). 17 say "Yes" After firming up this plan, the next step toward getting the project under­ way was raising the capital. Thus, in April 1973, 35 companies answered an invita­ tion to meet in Denver to hear a propo­ sal for the Paraho Oil Shale Demonstra­ tion. With a target of 15 companies, each contributing $500,000, by the day's end, the Demonstration was one-third of the way toward being funded. Five compa­ nies, led by Sohio, had agreed to join. Three months later, the project had 10 participants, and, convinced that the Demonstration should get underway, they authorized its immediate com­ mencement. Those 10 thought that 5 more participants could be found, and they were more than right. Seven more joined. A key fjgure in the project's birth,

8 Shale Country March 1975 '------­ module, it would be like a single cell of a proposal as a way to accelerate oil-shale Results, ledgers encouraging commercial retorting plant. To produce development at a savings to both taxpay­ While the future of the proposed 100,000 barrels of oil daily in a commer­ ers and shale developers. He points out Paraho expansion is still not confirmed, cial plant would require approximately that this experimentation can occur the 30-month Demonstration has already 14 such retorts. without the full-blown, as-yet-unknown yielded some encouraging results: This proposed scale-up would allow environmental impact and the $1-billion -No water is consumed in the retorting Paraho to study a full-size retort such as needed for a commercial complex. process. commercial plants would use; plus, Pforzheimer feels that a major finan­ -All of the kerogen is retorted and sustained larger-scale mining operations cial incentive to potential financial back­ some residual carbon from the shale is would be studied. Conventional room­ ers could come if the Dept. of Interior used as an additional heat source. and-pillar mining is now being used to rules favorably on the request that inves­ -The Paraho process recovers a very loosen 2,500-3,000 tons of ore each tors in the Paraho expansion be permit­ high yield of product oil. week. A full-size retort module would ted certain expense credits authorized -Excess low-energy gases produced in have a bigger appetite-some 10,000­ by the prototype lease if they hold feder­ the retorting process could generate all 12,000 tons of crushed shale rock per al prototype shale leases in Colorado of the electricity required for a commer­ day. and Utah. Pforzheimer predicts that, if cial plant and supplement energy needs The commercial-sized module retort successful, operation of the fuff-size of the surrounding community, creating would take 200 workers about 1 year to mine and retort at Anvil Points could a significant net energy surplus. build. However, before this proposal evaluate the environmental impact and -Overall thermal efficiency in retorting can become reality, there are a couple of eliminate some of the risk of commercial is thus 84-92 percent. hurdles to be jumped. First, ground­ development, and thereby become the -Gas produced is essentially sulfur­ breaking for the retort awaits further catalyst needed for financial commit­ free. word from the Dept. of Interior on an ment of several commercial ventures, With these results firmly under its environmental assessment of the scale­ possibly as early as 1976. belt, the Paraho Demonstration program up. Then Paraho officials must attempt at Anvil Points will continue to concen­ R&D marches on to finance privately the proposed trate its efforts on tests of different varia­ government-owned plant on govern­ Meanwhile, research and develop­ bles such as gas mixtures, temperatures ment property. Estimated price: $50 ment continues at Anvil Points. The op­ of operation, and gas-to-shale and million. eration employs 70 persons, and draws throughput rates (the rate atwhich shale Pforzheimer describes the expansion hundreds of visitors to the site each is processed in the retort). Jones ex­ month-mostly oil-industry and govern­ plains that Paraho will study different ment executives, lawmakers and Paraho levels of variables in the 41h-foot diame­ Bob Heistand, chief chemist at Anvil Points. uses Fischer Assay to measure the amount of participants. Jim Gigoux, Paraho's direc­ ter pilot retort, select the range of varia­ oil recovered from shale. tor of community and governmental re­ bles that has the most promise, and lations, states, "Our first successful 10­ demonstrate them in the semi-works day runs were accomplished on the pilot retort. plant during the summer (1974) and on Not only test results, but also ledgers the semi-works retort during the Christ­ look encouraging to Paraho. Pforz­ mas holidays. The larger unit is now heimer says that at the end of the first undergoing operational tests of longer year of the Paraho project, capital ex­ duration." penditures were apparently ahead of Jones explained that the biggest stum­ schedule, but for all practical purposes bling block has been "old hardware," the project was on budget. "Indications recycled from the idle Bureau of Mines are we will still complete the $7.5-million equipment that was left at Anvil Points program on schedule," he said. after 1967. The air blowers, for example, A man given to understatement, Pforz­ came from gas blowers Jones had in­ heimer is sure enough of the current stalled in 1946 for the Bureau. But al­ 30-month project to state that he thinks though old hardware temporarily Paraho has a key to commercial produc­ plagued the project, dust problems have tion of oil shale. "We are very encour­ been relatively minor, since the shale aged by the results at the semi-works that is fed into the Paraho retort is plant. We appear to have a process," he chunky, from 1/4 to 3 inches in size. A says. And, if the past is prologue, it dust-collection system is being installed won't be long until Paraho announces to vacuum out any emissions at various financial backing for the biggest retort transfer points in the retort complex. yet to be built.

Shale Country March 1975 9 I ~mmunity Profile I VERNAL, UTAH:

By Carol Edmonds I

Oil-shale deposits, tar sands and explorers. The Ashley Valley where Ver­ Committee tags county population at oil fields push Vernal onto nal is located takes its name from Wil­ 16,200 presently, and Utah's Governor merry-go-round of growth. liam Henry Ashley, a beaver hunter. Set­ predicts that figure will more than dou­ tlers in the valley, which lies between ble in the next decade. Vernal, Utah, dubs itself "Dino­ the Bookcliffs on the south and the Uinta Today Vernal is the only incorporated saurland" because of the multitude of Mountains on the north, developed the community in the 4,472 acres of Uintah fossil relics in the area, but a fossil fuel, basic irrigation system that serves their County. Though Vernal has only two oil shale, may replace dinosaur skele­ descendants today. stoplights, the city is a far cry from a raw tons as the area's chief attraction. Long Oil development made its debut in Western town. Sheep graze on sparse before Uintah County was created in 1948. Until then, farming, livestock, lum­ grasses outside the city, and dinosaur 1881-actually some 60 to 200 million bering and mining had been the area's models of all sizes and colors stalk the years ago-30-ton dinosaurs stalked the principal employers. After the discovery restaurants, motels and shops of Vernal. countryside. Also millions of years ago, of oil, Vernal became the hub serving But there is also a new addition to the the oil-shale deposits that civilized man the oil industry in Utah, Southern Wyo­ library; additions are underway to publiC would covet eons later were being laid ming and Western Colorado-oil has schools; and other signs of a blossoming down in the region. continued to nuture the area's economy. urban center are noticeable to residents In the more recent past-approx­ and tourists alike. imately 1,500 years ago-the now-extinct Vernal today: old and new In addition to a pamphlet on nearby basketmaker people inhabited the area. Nestled in saucer-shaped Ashley Val­ Dinosaur National Monument, a tourist Later came the Indians, followed in 1776 ley, Vernal is the county seat. While the can pick up a leaflet at the Chamber of by the Spanish priest Escalante and his 1970 census listed Vernal's population as Commerce for a 1-day self-guided tour 3,908, that number has nearly doubled in that includes Utah's shale country, 50 the past 5 years to 6,200, according to miles southeast of Vernal (by existing estimates furnished by the Chamber of roads). The oil-shale federally-leased Commerce. A Utah Population Works tracts, U-a and U-b, sit side by side in the

Old and new: State natural history museum in Vernal displays model of the plant-eating Diplodocus. The 8-ton cement skeleton gives insight into this animal estimated to have weighed 30 tons when alive. Exhibit in­ side museum discusses oil shale. From Dinosaurs to Shale

1

middle of nowhere, and Vernal is the Says Vernal City Manager Glade Nel­ only fair-sized nearby city. son, a native of Uintah County, who has served in his current post for 1 year, No one scoffs at shale "We've got growth problems that just Vernal's residents seem to appreciate won't quit." Oil and gas explorations are the city's nearness to growth, and gener­ pushing westward into the county, and, ally welcome the coming oil-shale devel­ "Vernal City is sitting in a strategic point opment and further growth in store for for tar-sands development. Impact from the area. Perhaps part of the belief in tar sands could be felt before oil shale," more change and more growth comes Nelson says. Three different tar-sands from the readily observable fact that processes are being tried in Uintah both are occurring now. County "right on our doorstep" in sepa­ Indicators of that growth: the Uintah rate projects, Nelson notes. County Commissioners are planning im­ provements on the airport, which is now Problems: water, housing serviced by frontier. New businesses Nelson has found that the growth al­ continue to locate in town; Parker Drill­ ready bombarding Vernal has brought a ing Co., previously headquartered in trio of concerns, which he identifies as Duchesne County to the west recently water, sewer facilities and housing moved to Vernal; American Savings and shortages. One confirmation of this situ­ Loan has opened an office in the city. ation: when a tou rist stops by the Cham­ And the new Gibson's Discount Center ber of Commerce, the office manager, draws shoppers from throughout the Dixie B. Hacking is likely to be answering region, as evidenced by the parking 'ot's questions from a telephone caller look­ cars bearing Colorado license plates. ing for available housing.

Growth won't quit: Glade Nelson. city manager for Vernal, says growth has brought water, sewer and housing concerns.

Shale Country March 1975 11 Nelson observes, "The local construc­ tion industry has not been able to keep up with the demand for single-family Needs lead time, money: Uintah houses." While some new construction School District, which covers Ver­ includes homes built on speculation, nal and the rest of the county, has most of the residential construction has enrollment of 4,700 students. "We're pretty close to our limit," been custom homes. A few months ago, school officials say. single-family rental homes and apart­ ments had "virtually a zero vacancy," but the squeeze doesn't seem quite as tight now. Another big headache for Vernal is its sewer system, the county's only one, designed for one-half of the population it now serves. City engineers are study­ ing sewer expansion through a part­ treatment, part-lagoon system. Another concern is water. Vernal City owns and operates virtually all of the exact results could be mighty unsettling count the area's recent growth and the valley's water system, with the exception to those not prepared. But Vernal offi­ projected development of oil shale and of a small system in the district of cials say they are preparing. other energy resources, says he recog­ Maeser. Vernal grew without increasing Ellis says the school district is con­ nizes "the question isn't is it coming, but its water ownership for the past decade. cerned about the impact of shale devel­ when. My most important job in terms of To accommodate future expansion, like­ opment, which might require construc­ long-range planning is to try to gear up ly to occur much more rapidly in the tion of new schools at all levels. "We'll for it./I At his urging the city has hired a coming decade if recent annexations are need some lead time and some money," full-time planner. any indication, the city now requires that he says. The School District has advised Another body that anticipates shale­ when any land in the county is converted the State Board of Education, that related growth is the Uintah County from agricultural production to residen­ "We're pretty close to our limit," and Commission. Warren Richardson, chair­ tial use, the water rights for such land the board is now studying the resources man of the three-man board, is a former shall be sold to the city. Ownership is and future needs of the district. rancher who now works for a canal and transferred via stock in canal companies, City manager Nelson, taking into ac- irrigation company. He says the area is which have water allocations to Ashley "on the threshold of big development." Creek; the stream brings water to the Housing, water and sewer needs, zoning city from a spring so pu re that chlorine and schools will be among the issues, he alone makes it potable-a fact that predicts. "We're right on the verge of makes water treatment no problem as needing a lot of services. Oil-shale de­ the city grows. velopment is a mammoth thing." Vernal city government is not the only Richardson feels that a great portion of entity caught in the throes of growth. the burden for providing community Uintah School District has one high services will fall on the oil companies school, two junior highs and five ele­ themselves. Since the state has claimed mentaries, and the district recently pur­ it is entitled to ownership of tracts U-a chased 30 acres of land for a new grade and U-b, and the federal government school. Fall enrollment was 4,744 stu­ may tu rn over ownership of those tracts, dents, an increase of 214 students over Richardson says, "It's rather a hazy fi­ .. the previous year. The school district has nancial picture for us." always had a high turnover, indicating a One county commissioner says of the transient population. Close to 500 stu­ upcoming growth, "We hope we will dents transfer in and out of the school survive it." But Nelson, brimming over district within a year, according to assist­ New man about town: Rees Madsen, envi­ with optimism, observes that Vernal has ant superintendent Phil Ellis. ronmental coordinator for the White River doubled its size through annexation in Shale Project, is headquartered in Vernal. the past year and predicts, "There isn't a Preparing for shale Madsen, a civil engineer who graduated from Brigham Young University and North­ problem we have that we can't solve­ Add to this powderkeg of growth sev­ western University, has lived in Vernal with water, sewer, housing, public relations, eral million barrels of shale oil, and the his family since last September. whatever. "

12 Shale Country March 1975 IReol Estate Comer I

Got a Permit?

Building permits tell more than As mentioned last month, Mesa County, ing, nevertheless. Colo., is anticipating an increase in just construction activity. building-permit valuation in 1974 over . .. stays up (mostly) 1973 (through November). Garfield A brief review of Garfield County's County, through October, was not (Rifle and Glenwood Springs) building ahead of 1973 totals, but had not permits for the past few months shows As an indicator of the economic ups slumped drastically either (see chart). that in comparison to prior-year figures, and downs in an area, building permits Vernal, Utah, building activity is a bit valuation of new building was running rank in an important position. They tell, harder to estimate since, as Kenneth D. slightly behind the 1973 total construc­ obviously, the amount and types of con­ Fisher, city planner, points out, tion figure. As of October 1974 (latest struction taking place. But they also pro­ "Building-permit valuation records were available figures), building valuation in vide dues as to employment in the not kept prior to July 1974 (when he took Garfield County totaled $3.3 million. In bu ilding trades; and, they give an indica­ the position.)" The only available record comparison, by October 1973, valuation tion of the mortgage-loan activity and of building activity in Vernal is the num­ stood at $4.1 million. the availability of housing loan money in ber of permits issued in prior years (see A notable phenomenon in the county, a particular location. chart). However, from July through No­ however, was the beginning of tempo­ Keeping these factors in mind, a sur­ vember 1974, valuation of building per­ rary trailer permits being issued in late vey of recent building-permit issuances mits, both residential and commercial, 1973 and throughout 1974. By October and valuations in the shale development totaled more than $900,000, and includ­ 1974,92 trailer permits had been granted area in Utah and Colorado shows a posi­ ed several large permits for retail struc­ by the county, and although this type of tive deviation from the crashing slump in tures. permit does not figure in the construc­ construction that the majority of the In the city of Grand Junction, Colo., in tion valuation total (since they really country is experiencing. In 1974, the 1973, total valuation of building permits don't count as "building" per se), they industry was struck by tremors, shaking issued came to $14.7 million. By compar­ had added to the county's intake of a foundation laid in the previous year, ison, through November 1974, total permit fees to the tune of some $1,500. which was a record construction year for Grand Junction building-permit valua­ A look at building permits in 1975 will the United States. tion had reached $11.2 million, with new give some clues as to the general health residential approaching $4 million-the of an area's economy. In shale country, total for 1973. With only 1 month left to where economic indicators have been What goes up •.• add to the year's figures, it is not likely conspicuously optimistic during the past Evidence of this shaky situation is not that the 1974 valuation topped 1973's few months, predictions are that build­ so apparent in shale country, however. total, but it made for a respectable show­ ing should continue strong. iP

Shale Country March 1975 13 INewcomers I

Bankers zero in on shale

Financiers from far and wide appear Q. What are UBD's specific interests in sources-financing the plants through frequently these days throughout shale shale? the sale of stock and from their working country because of the dollar signs asso­ Hazelrigg: We've always been promi­ capital. They also may issue long-term ciated with pending development. How­ nent in conventional energy financing, bonds. After some of these plants are in ever, many of these "newcomers" are so our interest in oil shale and coal is a production, banks will probably become actually shale-state bankers with a long­ logical extension of that. More specifi­ more involved in the direct financing of time interest in the area-and with a cally, the oil-shale projects, their s.uppli­ the industry. special interest in insuring that those ers, municipalities, and newcomers to dollars make sense for shale country. affected areas will all need highly profes­ Q. What are UBD's plans for future shale Take the United Bank of Denver (UBD) sional banking services. Our primary in­ activities? as a prime example. terest is to be knowledgeable enough Kirkpatrick: All the activities in the bank On Aug. 7,1974, Richard A. Kirk, UBD about the industry to provide those serv­ that will need to be involved as the executive vice president, took the stand ices when and where they're needed. industry progresses-especially com­ at a Project Independence hearing to Further, we are a concerned corporate mercial lending, municipal bond under­ express the Bank's position on energy­ citizen and have particular concerns writing, equipment leasing and personal resource development. On Nov. 15, about the regional environmental im­ banking-have been exposed by the task 1974, UBD sponsored a day-long shale pacts and financial needs connected force to as much that is going on in the seminar for the business community. with energy-resource development. industry as possible. This will enable us And for 8 months in 1974, a UBD task in the future to continue a coordinated force concentrated almost exclusively on Q. What can a Denver bank contribute and active effort to assist wherever pos­ shale. in the shale area? sible in meeting the financial require­ Recently SHALE COUNTRY editors in­ Hazelrigg: Major capital development in ments of growth in this area. We defi­ terviewed members of this task force sparsely-populated areas normally re­ nitely expect to be heavily involved. AN (Charles Hazelrigg, senior vice presi­ quires infusion of financial resources dent; Sandy Kirkpatrick, vice president; from larger money centers such as Sherry Landeck, commercial banking of­ Denver. Because UBD is a regional bank ficer) and asked them to detail United and part of a major regional holding Bank of Denver's approach to oil shale. company, we provide financing throughout the Rocky Mountain region Q. Why did UBD establish a shale task via direct loans and loans through corre­ force? spondent and affiliate banks. The result­ Landeck: Early in 1974, the senior man­ ing regional expertise will enable us to agement of the ban k recogn ized that the make intelligent decisions in meeting likelihood of shale development was financial needs generated by new energy greater than it had been for some time industries. In addition, in this case, we and that the impacts on Colorado's would work in cooperation with our economy and the well-being of the affiliate, Mesa United Bank of Grand state's residents would be major. Based Junction, which adds an extra dimension on this and on the complexity of the to our ability to service the industry. subject, it was decided to establish a task force to study the probable implications Q. Where will the shale industry get its for our bank. We also looked at coal financing? development and coal-related activities, Kirkpatrick: The economic viability of such as the new power plants being pioneer oil-shale plants is an uncertainty "..• we do not oppose and, in fact, support built, because we are concerned with at this point, so initially sponsoring com­ development of natural resources if done the compounded effects of all types of panies are unlikely to go to banks. In­ properly." (Richard A. Kirk, United Bank of development happening at once. stead, they will use internal capital Denver)

14 Shale Country March 1975 IEnvironment I

A Deep Look into Shale's Watery World

...

"Benthos, benthos­ who's got the benthos?"

Hundreds of ecological studies now tween possible impacts from C-a and calls on specialists from its other offices. are going on in shale country. Just one C-b tracts and any other source. Study voucher: Morgan reports that example: the aquatic studies being per­ Benthos who? The aquatic species NUS is developing reference collections formed on the C-a tract in Colorado (Rio being studied fall into five classifica­ of these samples. A portion of the Blanco Oil Shale Project). Under a 2-year tions: plankton, periphyton, aquatic "voucher" collection, for example, will contract, NUS Corp. is conducting these macrophytes, benthic macroin­ be maintained in Rifle for comparison studies, in coordination with Limnetics, vertebrates and fish. Although the spell­ purposes. Such collections contain fish Inc., the environmental management ing of some of these is enough to send preserved in alcohol baths, benthos in contractor who dovetails the venture's you back to school, these groups simply small vials, other species on glass slides, en~ironmental studies. represent the aquatic cycle, or levels of as well as photographs and drawings that NUS is looking at: the aquatic life on life, present in these waters. The ben­ are used to aid in identification. Love the C-a tract and close to the tract; the thos, for example, include the flora and explains that such a "first of its kind" development Rio Blanco proposes to put fauna in the bottom of the streams. The collection has significant value to scien­ on C-a; and the effects development plankton, comprised of myriads of tiny tists and students. may have on the aquatic life. plants and animals, drift in the current. NUS is an old-timer in this type of Of course NUS won't wait 2 years The ultimate in this food chain are the study. Its Cyrus Wm. Rice Div. started in before it tells Rio Blanco what it's found. fish. 1916 as a one-man analytical chemistry It constantly passes on its findings via NUS' studies involve taking samples of lab. The company evolved into a water­ monthly reports and frequent meetings all these species on a bimonthly basis for management expert. Another predeces­ with Limnetics and Rio Blanco. As L. R. 2 years. Pumps, nets and special sam­ sor, Nuclear Utility Services, was in­ Love, vice president and general manag­ plers are used to collect plankton; rock volved in the nuclear industry's pioneer­ er of NUS' Rice Div., says, "This constant scrapings are used to collect periphyton. ing efforts, especially the environmental exchange of information allows good Benthos are obtained using dredges and aspects. In 1967 NUS and Rice got to­ things to happen. For example, it allows samplers such as the pail and glove de­ gether and today the NUS Corp. is an Rio Blanco to alter its plans if the vice shown. In the case of fish, samples 8S0-employee, 8-division, 10-office com­ findings show that a modification would are caught by using nets and seines and pany that specializes in all phases of better suit aquatic conditions." electroshocking devices, which tempo­ energy and environmental consulting. Because much of the viable aquatic rarily stun the fish. Before releasing the In summarizing the Rio Blanco study, ecosystem occurs off tract C-a and be­ fish, length and weight are recorded; Love says: liThe most important thing cause the on-tract streams are intermit­ scale or spine samples are taken and the about this type of environmental study is tent, most of the studies are taking place occurrence of any external parasites is that decisions about development used off-site. P. V. Morgan, vice president and noted. to be left up to industry. But since the manager, Rice Div. Ecological Sciences Then it's back to the labs where micro­ passage of the National Environmental Dept., explains off-tract studies are im­ scopes and other instruments are used Policy Act, any major action is evaluated portant because C-a mining and refining to analyze the samples. Much of this long before you get into the construc­ could affect the aquatic life downstream analysis is being done right in shale tion phase. Today we look before we if these potential impacts aren't taken country; NUS has three full-time ecolo­ jump-from the industrial, state and fed­ into consideration. Thus, NUS is making gists based in Rifle. Dr. Tom Ivory, NUS eral views. The C-a study reflects this baseline studies both up and down­ Project Manager, is in charge of the approach. There will be a thorough eval­ stream as a basis for determining poten­ firm's Denver office and he is also in­ uation of the project from every angle­ tial impacts and for differentiating be­ volved with field operations. And NUS before development." AN

Shale Country March 1975 15 IVignette I

EARL RAMSEY­ White River's "Easy Driver"

Today, any manager worth his salt­ sergeant. be accomplished. Associates feel that he and his salary-must do two things After college, Ramsey joined the Sun­ will. John Douma, Sun Oil vice president equally well. He must get the job done; ray DX Oil Co., as a junior engineer. In of production, who has observed so he must be a hard driver. But at the progressive steps he advanced to these Ramsey's performance in various assign­ same time, he must keep people happy; positions: district production manager ments for many years, says: "Earl is a real so he must be easy going. And as any at Farmington, N.M.; division engineer manager. Although he's a driver, you people-manager knows-whether it's a at Denver; manager of engineering at enjoy working with him. He's a leader of mother or a coach or a bank presi­ Tulsa; division manager at Midland, people and works particularly well with dent-trying to be such an "easy driver" Tex.; and production department man­ others in planning and organizing. He's is nearly the impossible mission. ager at Tulsa. Following the merger of an active manager with an outstanding Nevertheless, it can be done and is Sunray DX into Sun Oil Co., Ramsey was job performance. Most importantly, he being done every day by many individu­ named manager of engineering for Sun's adapts and adjusts readily to different als in shale country. One of these is Earl North American Production Div. at Dal­ environments. We have a saying in the Ramsey. Soft-spoken with a shy smile­ las, and in 1972 he was appointed man­ industry, 'If a person is a good manager, that he flashes frequently-Ramsey ager of the company's Houston Produc­ he can do a good job on any project­ looks as if he might be a minister or a tion region. During 1972, Earl Ramsey whether it's in Texas or Alaska orwheth­ professor. He's not, but he probably also attended the Harvard Business er it's in coal or oil shale.' " uses attributes from both professions in School's Advanced Management Pro­ And that's perhaps how Ramsey would his job as Program Director of the White gram. describe himself-as flexible. As he puts River Shale Project. it, "People in the shale industry must be Ramsey also is a prime example of an ... to Utah flexible. You deal with so many people, interesting phenomenon of the oil-shale Today, Ramsey, who is married and so many groups, so many regulations, industry: it contains several of these has three daughters and a son, spends that you must be able to change, to easy-driver "miracle workers". The rea­ most of his time in Utah-because in adapt daily. It can be frustrating at times; son is fairly Simple-the shale industry is 1974, he was named program director of but it's also fascinating." in such an intense spotlight that there is the White River Shale Project. Head­ And that attitude is apparent. As one no way it can hide its job, and people, quarters for this project are located in of White River's contractors put it, results. Therefore, the individuals it Salt Lake City; a field operating office is "Ramsey's enthusiastic about the proj­ chooses for its key management posi­ located in Vernal, Utah. ect-and he conveys that enthusiasm to tions must be miracle workers. The White River Shale Project, a joint you." AN Typically these managers are experts venture of Sohio Petroleum Co., Sun Oil in a profession, often engineering-and Co., and Phillips Petroleum Co., is di­ they're also experts at working well with recting the development of oil-shale people. Usually these double talents leases acquired in Utah as part of the were recognized early in the individual's federal government's prototype oil­ career and his company helped to en­ shale leasing program. The leases are hance these talents by assigning him to a Tracts U-a and U-b, located in Utah near series of increasingly-demanding posi­ the Colorado border. tions and by encouraging him to take Objectives of the project: to produce formal management training courses. an estimated 100,000 barrels of petro­ leu m products per day from the shale; to From Kansas . .. develop the largest underground mine Ramsey's career reflects this pattern. in the world to produce over 150,000 Born in Atchison, Kan., he received a tons per day of shale, plus retorting and geological engineering degree from Col­ refining facilities; to develop a new com­ orado School of Mines in 1950. Prior to munity; and to resolve environmental college he served with the U.S. Army for considerations. 3 years, reaching the rank of master That's all Ramsey has to make sure will

16 Shale Country March 1975 I Voice of the People I

Facing the Goliaths

By Carol Edmonds

Searching for data and fighting for funds, COG and Halligan help the region prepare for its future.

As Pat Halligan talks about the Colo­ rado West Area Council of Governments (COG), he sounds like a David caught in the midst of a battlefield of Goliaths. The giants are the oil industry, the state and the federal government. Amidst that so­ phisticated machinery, the guy with the slingshot is local government-and, as Halligan sees it, the COG. What's a COG? As Halligan, the execu­ tive director for the Colorado West Area COG, points out, Councils of Govern­ ment are so new they have no tradi­ tion-they are still trying to define them­ Fighting the red tape, while trying to meet attention of Pat Halligan, executive director, selves. Basically, however, a COG is a area needs, occupies much of the time and Colorado West Area COG. legal grouping of local governments. The Colorado West COG was formed 2 years ago by the County Commissioners mary efforts as two-fold: addressing disbanded, thus effectively making COG of the state's Region 11, which includes regional concerns such as criminal jus­ the only regional governmental body Mesa, Garfield, Rio Blanco and Moffat tice and comprehensive health pro­ concerned with shale; COG expanded Counties, although this last county has grams; and providing technical assis­ to nine employees; its annual budget declined to participate actively in COG. tance to local governments in such areas grew to $242,000; and energy-resource The Colorado West COG is charged as wastewater treatment. development, particularly shale and with several fundamental functions. One coal, became an increasing concern fac­ is communication: The council works Who's Halligan? ing the region. closely with state and federal govern­ Halligan, who holds a degree in public ments and private agencies to express administration from the University of COG, Halligan and shale the needs and feelings of the communi­ Kansas, has been executive director of To prepare for the massive energy­ ties in its region. Another function is as a the Colorado West COG since its incep­ resource industries expected in the area, funnel for government money. COG is tion. He and his family came to Colorado local communities will need large sums legally designated as the agency through in August 1972 from his native state of of money. But Halligan fears, "Local gov­ which state and federal funds for a varie­ Kansas, where he served as director of ernment is in a very weak position in this ty of services must pass on their way to the planning division, Kansas Dept. of game. We don't have the muscle." He local governments and agencies. Economic Development. explains, "The industry, the state and Halligan describes the COG as "an When Halligan assumed his post, the the federal government are all jockeying arm of local government." And he COG headquarters in Rifle housed only for position. The best we can do, I guess, quickly adds, it is "not another layer of himself and his secretary. During the is to continue to meet some of the needs government"-a label frequently flung next 2 years, however, the Colorado that are voiced by the individual towns at government funds-channeling agen­ West COG saw major changes: the and counties." cies. From his position, Halligan de­ four-county Oil Shale Regional Advisory In particular, the service needs of local scribes the Colorado West COG's pri- Commission completed its studies and communities will soar, as commercial

Shale Country March 1975 17 I energy developments draw closer to re­ government must convince the state, the report made by DoriRapp, Vanderhoof's ality. New schools, new roads, expanded Feds and the industry that "in order to oil-shale coordinator. health-care programs and larger cri­ avoid costly problems in the future, let's In addition to highlighting monetary minal-justice agencies are among the spend a little money now." needs, COG is also underscoring com­ service needs anticipated. Bu reaucratic red tape forms another munity resource needs. Halligan cites Furthermore, as Halligan points out, roadblock to meeting regional needs. "A housing as "one of the primary needs," "Many of the jurisdictions in this region lot of what we do is just plain bookkeep­ especially as oil-shale development con­ are small, but their problems aren't." ing," Halligan says, adding that COG has tinues. To document this, COG has Wastewater treatment, for example, may passed $80,OQO in government planning completed a housing study, and the U.S. require an expert, which a small town funds on to the counties in the past year, Dept. of Housing and Urban Develop­ cannot afford. Yet several small towns and some of that "requires a tremen­ ment has made a market analysis of the can share the same expert. One way to dous amount of paper work"-time current needs for rental and mobile­ solve this jurisdictional dilemma is to sheets, progress reports, fiscal accounts. home units in the region's towns and seek designation as an area-wide waste­ A $250,000 grant, Halligan estimates, cities. According to the study, many water treatment planning agency, which costs COG about $15,000 to administer. shale country communities need more COG is dOing, thereby qualifying for housing immediately. federal assistance. Getting money now As oil-shale development grows, some To better deal with current growth, ATorrent of Change of the local and regional needs aren't Halligan has resorted to what he calls a To plan for the future, however, the going to go begging. Among the recent "simple idea" to ease the fund pinch. region needs more information from grants to COG have been a 24-month, Halligan says that COG is going to the the oil-shale industry. According to $150,000 grant from the federal Econom­ Halligan, the area has received scant ic Development Administration for a civil information on the number of persons engineer, public administrator and other the industry may employ as oil-shale technical personnel; a $100,000 EPA development reaches ·its peak. But, he grant for sewer, water and solid-waste notes, "The companies don't really facility needs; and federal funds for know" those figures yet. When it can emergency medical services. supply information, "generally the in­ But unfortunately, the Economic De­ dustry has cooperated," Halligan says. velopment grant carries a matching cash In the absence of specific information requirement of $50,000 over 2 years­ from the industry, planning is still possi­ money COG had expected but failed to ble, Halligan observes. He generally re­ get from last year's General Assembly gards planning as a function not particu­ appropriations. In fact, getting the nec­ larly crucial to the Colorado West COG, essary state and federal aid is a sore since each of the counties has its own point with Halligan: he is frequently in planner. Thus, for the most part, it's up the position of pleading for funds, but to the local governments to make the he often runs into roadblocks. planning happen. "The counties and the towns need to make some determina­ Fighting the red tape tion about how big they want to be, how The executive director scores the Gov­ big they can be," he says. "At least then ernor's Oil Shale Coordinating Project various oil companies and is asking them you have a parameter you can operate under the Vanderhoof administration for how many people they now employ and from. Planning is a continuous kind of "not addressing the needs of local gov­ where in the region those people live. process," he adds. "As times change, ernment." Instead, Halligan said, the Then COG is coming up with a cost per your plans change." money stayed at the state level and when capita for local government to furnish What is frightening to some communi­ expertise was sought, the answer from community services, a figure estimated ty residents, Halligan explains, is to be state officialdom was something like, by one consulting fi rm at $3,000 per caught in the torrent of that change, to "It's not in my job description." person. But Halligan says, "We think it's be living on a homestead ranch and to How the local government needs are a little higher." With these data in hand, "go to the Elks Club on Saturday night financed doesn't bother Halligan as Halligan believes COG will be better and not know anyone, because they're much as how the funds are channeled: armed to get much-needed funds from all newcomers." That kind of commun ity "Getting the money from the point it's the state legislatu re, the Feds and the apprehension is hard to soften. It is then deposited back to the area of need is, industry. He is especially interested in that the local man's slingshot seems ut­ well ... we just haven't really been very proving that local needs are and will be terly useless against the oncoming ar­ successful," he says. Halligan feels local larger than the needs cited in the recent mies of change.

18 Shale Country March 1975

5 Letters To The Editor

More from Sen. Haskell ••• "That, of course, is a problem for the "If the prototype program is to be truly future. There is another, more immediate, experimental, it must explore every method "I think it's too early to dismiss the pros­ question raised by the President's message: of recovering oil from shale. Only in that way pect of large-scale shale development in will the Interior Dept., in a rush to prod shale can we be sure of using the least costly Colorado and other Western states, even development, offer additional leases before process-in dollar, environmental and SOCial though the impetus seemed to have slack­ the data are in on the present prototype terms. ened in the last half of 1974. First, the Feder­ leases? "It's premature to seek legislative reme­ al Energy Administration minimized the role "Such haste would amount to a prejudg­ dies for problems which may not even arise. of oil from shale in its Project Independence ment of what is supposed to be an experi­ But. as Chairman of the Interior PubliC Lands report. And one of the large joint ventures mental program. We have yet to find answers Subcommittee, I will carefully monitor shale announced it would delay plans to begin to the crucial questions surrounding a west­ developments in both government and in­ building this spring a commercial oil-shale ern shale industry: How much water will be dustry." plant in western Colorado, citing the lack of needed, how much will be consumed and Floyd Haskell a strong national energy policy and econom­ how much rendered unusable? What will be Washington, D.C. ic uncertainty. the likely impact on air quality? What about "Whether that was a conscious 'reluctant the massive disposal problems stemming bride' performance, I suspect the oil industry from the retort process? Some Policy Questions ... was gratified by references to oil shale in "In my view, the only justification for addi­ President Ford's State of the Union message tional shale leases now would be to further "I read with interest your new publication on Jan. 15. Oil from shale still figures heavily experiment with the environmentally­ SHALE COUNTRY which was handed out to in his energy plans. He called for a million­ preferable in-situ process which has been the Interior Oil Shale Environmental Advisory barrel-per-day shale industry by 1985 and neglected so far. Panel at our last meeting. I commend your promised incentives to achieve it. declaration that this is to be an impartial "While he did not detail the incentives, magazine but with your sponsors (Ashland almost certainly they will include a floor-a Oil, ARCO, Gulf Oil, Shell Oil, Standard of guaranteed price-on oil from shale. That much we can determine from two other steps he proposed. "First, he wants domestic crude oil decon­ trolled. That means all domestic oil will rise to the world price, now around $11 per barrel. Add to that the $3 per barrel tax the President plans to impose by executive ac­ tion and you get crude oil selling for over $14 per barrel-about twice the present price. (Under the existing two-tiered pricing sys­ tem, 'old' domestic oil sells for $5.25 per barrel and the combined average of old and new domestic oil is $7.25 per barrel.) "Even shale oil will become economic at $14 per barrel. But in my view, if the federal government is going to subsidize the indus­ try, it has a responsibility to regulate its prices and performance. It should be treated as a public utility.

Shale Country March 1975 19 Indiana, Sohio, Sun Oil, The ai/Shale Corp.) Mountain Empire Publishing, an indepen­ zine. I would also like five copies of your first objectivity may come rather hard. dent company, to act as the publisher of this edition for investors working with me in the "/ do have two questions and one request. magazine was to obtain outside-of-the­ Rifle area. The questions: would you define for me your industry ob;ectivity-and we sure will try. "My thanks to your editor and authors for a criteria for the 'qualified executives' who are Second, as to the "qualified executives" on much needed magazine." to get your magazine without obligation and our circulation statement: we realize that the R. E. O'Heffernan, General Manager who are they? And, why is this publication term did not really say what we meant. Thus Diversified Builders and Developers being distributed free of charge to the peo­ we have changed our circulation statement Rifle, Colorado ple of western Colorado and the Utah shale to read: "those with a special interest in country. Since shale development will affect shale, " meaning people who have a specific "I recently read the magazine SHALE a/l of our State and region I fail to see the "need to know" about shale development, COUNTRY and was wondering if I might be rationale of your geologic constraints. such as public officials (Sherman and Mona­ added to your mailing list. "The request: would you please add two ghan, for example), environmentalists, exec­ "I am a stUdent of Mesa Col/ege, Grand names to your circulation? Mr. Harris Sher­ utives in related industries . ... And finally, Junction, Colorado, majoring in geology. I man, Director, (Colorado) Dept. of Natural the reason for our geographic constraints is am very interested in the oil-shale industry Resources, and Mr. James Monoghan, Assis­ simple: although everyone in Colorado and and I believe your magazine would be very tant to the Governor on Natural Resources. Utah will be affected by shale development, beneficial to my education. Thank you very much." the residents of the shale area itself have the "I would appreciate it very much if I were Ms. V. Crane Wright greatest need to know and therefore the to receive the first issue and every issue Oil Shale Workshop publication is designed primarily for them. thereafter. Thank you." Denver Audubon Society SHALE COUNTRY's present free circulation David Fix Member, Interior Oil Shale is 20,000; if response indicates that a larger Grand Junction, Colo. Environmental Advisory Panel number of copies is needed, an increased circulation certainly will be considered. "Please send twenty-five copies of the Editor's note: Ms. Wright raises several im­ January publication of SHALE COUNTRY portant questions that we'd like to answer. that I might send to my business associates First, as to the ob;ectivity of the magazine: From the first million requests . .. out of state. we agree that it "may come rather hard, " as "I enjoyed receiving it and hope that you it does in almost all situations. However, the "Would you please enter my name to your will continue sending it to me." main reason the energy companies asked mailing list for your SHALE COUNTRY maga­ Jack D. Berry Grand Junction, Colo.

"We received the first issue of your new publication SHALE COUNTRY. We would very much appreciate being placed on your mailing list." Donald R. Millert, Project Manager Limnetics, Inc., Environmental ConSUltants Denver, Colo.

"We would like to have your new maga­ zine, SHALE COUNTRY. Could you please tell us where we could obtain these maga­ zines in Grand Junction? Thank you very much." Rose W. Carnal Grand Junction, Colo.

Editor's note: We have asked our distribu­ tors throughout the region to place SHALE COUNTRY copies in a limited number of high traffic areas, such as City Market stores, banks, drug stores. ...

20 Shale Country March 1975 From the air, shale country looms large and majestic.