A History and Analysis of the Federal Prototype Oil Shale Leasing Program
Total Page：16
File Type：pdf, Size：1020Kb
Assessment of Oil Shale Technologies—Vol. II: A History and Analysis of the Federal Prototype Oil Shale Leasing Program July 1980 Library of Congress Catalog Card Number 80-600102 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Stock No. 052-003 -00763-1 Foreword This volume discusses the Federal Prototype Oil Shale Leasing Program that began in 1974 when the U.S. Department of the Interior sold leases to four tracts in the oil shale regions of Colorado and Utah, A prior leasing attempt in 1968 is also described because it provides an historical perspective about the imperatives that have encouraged the development of Federal oil shale lands by private indus- try and the restraints that have inhibited such development. The report includes discussions of political, economic, environmental, and energy-related factors that affected both the 1968 leasing attempt and its successor—the current Prototype Program. The Program’s goals are identified, and its progress and status are examined to determine if those goals have been met or are likely to be met in the foreseeable future. &:N:zf;’- Director Oil Shale Advisory Committee James H. Gary, Chairman Colorado School of Mines James Boyd Estella B. Leopold Private Consultant University of Washington William Brennan Charles H. Prien** Rancher Denver Research Institute Rio Manco County, Colo. John F. Redmond Robert L, Coble* Retired, Shell Oil Co. Massachusetts Institute of Technology Richard D. Ridley Roland C. Fischer Occidental Oil Shale, Inc. Colorado River Water Conservation Raymond L. Smith District Michigan Technological University John D. Haun Thomas W. Ten Eyck Colorado School of Mines Rio Blanco Oil Shale Co. Carolyn A. Johnson Wallace Tyner Public Lands Institute Purdue University Sidney Katell Glen D. Weaver West Virginia University Colorado State University *Resigned March 1979. **died April 1979. NOTE: The Advisory Committee provided advice and comment throughout the assessment, but does not necessarily approve, disapprove, or endorse the report, for which OTA assumes full responsibility. Iv Oil Shale Technology Project Staff Lionel S. Johns, Assistant Director, OTA Energy, Materials, and International Security Division Audrey Buyrn, Materials Program Manager Thomas A, Sladek, Principal Investigator William E, Davis, Social and Economic Impacts Patricia L. Poulton, Environmental and Water Availability Phillip L. Robinson, Economic and Financial Administrative Staff Patricia A, Canavan Margaret M. Connors Carol A. Drohan Jackie S, Robinson Contributors Bob Fensterheim, Health Program Mike Gough, Health Program Donald G. Kesterke, U.S. Bureau of Mines* Albert E, Paladino, National Bureau of Standards** Steven Plotkin, Energy Program Publishing Staff John C. Holmes, Publishing Officer-. Kathie S. Boss Debra M. Datcher Joanne Heming ‘Oil Shale Project Director through January 1979, on detail to (OTA) from the U.S. Bureau of Mines. **Materials Program Manager through December 1978, Acknowledgments This report was prepared by the Office of Technology Assessment Materials Program staff. A full list of the contractors and consultants who contributed to the assessment will be found in volume I. The staff wishes to acknowledge the spe- cial assistance and cooperation in the preparation of volume II of the Office of the Assistant Secretary for Land and Water Resources of the Department of the In- terior and of the Denver Regional Office of the General Accounting Office. Contents Chapter Page 1. Introduction and Background . 1 2. An Initial Attempt at Oil Shale Leasing (1963-68). 9 Introduction , , ., . , ., . 9 The Political Environment ., , . ., . ., , . , , ., , . 9 Energy and the Economic Environment . , . 13 An Initial Leasing Program .............................................................................. ,., 16 A Revised Proposal and Its Demise . , ..., , , . , 22 Reasons for Failureofthe 1968 Program . ..., ,. ....., ,, ,..., ,, . 24 Chapter preferences. ., . , . ., . 25 3.Evolution of the Prototype Program . 29 Introduction. 29 The Political Environment . ..., , . ., . , . 29 Energy and the Economic Environment . 32 The Prototype Program Emerges . ,, .....,.., . 34 Chapters References. 37 4.The Changing Scene Between 1974and1979. 41 Introduction ., . ., . , . 41 The Changing Economic Situation. ..., ., . , . ., . 41 Problems on Colorado Tract C-a . 42 Problems on ColoradoTract C-b . 47 Problems on the Utah Tracts . ...,.., . 48 In-LieuLands . ,., . , ., ,....., . ., 48 Unpatented Mining Claims. 50 The Peninsula Mining Case . ,. 53 Environmental Problems . 53 Problems With theEnvironmental Baseline ., . , ..., ., . ..., . 54 —. - . The Political Climate. , . , . , . 55 Suspension Requests . 55 Events During the Suspension Periods. 56 Resumption of Activitiesand Current Status ..,..., . 59 TractC-a. 59 Tract C-b. 59 Tracts U-a andU-b . 60 Chapter preferences. ., ..., . , , , . , . 60 5. Key Issues in the Prototype Program . 65 Introduction . , . , . 65 Technological Issues . ., . 65 Environmental Issues. , ., . ., . , . 66 Legal and Political Issues. ..., ., . , . 69 Economic Issues. 72 Chapters References. , . , ., ..., , ., , . 74 VII Contents—continued Chapter Page 6. Outlook . 77 Objectives of the1973Program . 77 New Initiatives ....., . 79 Chapter preferences. 81 List of Tables Table No. Page l.LeaseTracts Offered Under the Prototype Oil Shale Leasing Program.................37 2. Cost Estimates for Oil Shale Processing Plants, . 41 3.Mining Claims in theTristate Oil Shale Region, 1968.. 69 4.Nature of Claims on Oil Shale LandsWith Commercial Potential, 1968...,,,.. 70 List of Figures FigureNo. Page l.Status of Oil ShaleTechnologies in 1968. 31 2.U.S. Petroleum Supplies as Projected in 1971.., . 33 3.CostTrends for Domestic and Imported Petroleum. 34 4.Locations of the Tracts Offered for LeaseUnder the Prototype Program. 35 5.Engineering Cost Estimates for 50,000-bbl/dS shaleOil Syncrude Plants ............ 42 6.0pen-Pit Mining Concept Featuring OfftractWasteDisposal . 43 7.0riginal Development Plan for ColoradoTractC-a. 43 8.AMultiple-LevelRoom-and-Pillar Oil Shale Mine. 47 List of Acronyms BLM —Bureau of Land Management MIS — modified in situ DDP —detailed development plan NAAQS —National Ambient Air Quality DOE —Department of Energy Standards DOI —Department of the Interior NEPA —National Environmental Policy Act EIS — environmental impact statement PSD —prevention of significant EPA —Environmental Protection Agency deterioration ERDA —Energy Research and Development Tosco —The Oil Shale Corporation [now Administration Tosco, Corp.) FLPMA —Federal Land Policy and Management USBM —U.S. Bureau of Mines Act CHAPTER 1 Introduction and Background — CHAPTER 1 Introduction and Background The oil shale deposits of the Green River acquire Federal oil shale lands by staking and formation occur in several geologic basins in filing placer mining claims, performing a few Colorado, Utah, and Wyoming and underlie hundred dollars worth of work on the claim some 17,000 mi2 ( 11 million acres) of terrain. site, and paying small fees to purchase “pat- Nearly 72 percent of the land, overlying ents” that conveyed ownership of both sur- about 80 percent of the oil shale resource, is face and mineral rights. Physical discovery of in the public domain and is controlled by the the deposits was required. This requirement, U.S. Department of the Interior (DOI). Most of coupled with that for assessment work, re- the Federal land is located near the deposi- sulted in the location of claims along eroded tional centers of the basins and contains the water courses where the deposits are visible thickest and richest oil shale deposits. The re- and easily accessible. maining lands are controlled by individuals, private companies, and the governments of Numerous placer claims were filed during the three States. the petroleum shortages of 1915-20, and pat- ents for many of these were obtained by the Oil shale lands were acquired by the States prospectors or their successors. Today, these under the provisions of their respective state- patented claims, together with the earlier hood enabling acts. Private holdings were ac- homesteads, comprise the privately owned oil quired during the late 19th and early 20th shale lands in Colorado and Utah. Individual centuries by individual homesteaders, by the claims and homesteads were originally quite railroads during construction of the trans- small because of size restrictions imposed by continental rail line, or through patenting of both homesteading and mining laws. How- placer mining claims for oil shale and other ever, many of these small tracts were sub- minerals, The railroad lands comprise odd- sequently purchased by large firms and were numbered sections of each township within unified into much larger development blocks. 20 miles on either side of the railroad right-of- Today, private interests (including the rail- way through the Wyoming oil shale basins. road) have clear title to 21 percent of the oil The total acreage of these holdings is very shale lands in Colorado’s Piceance basin, 9 large, but commercial development is inhib- ited by the small size of individual tracts, by percent of Utah’s Uinta basin, 24 percent of the Green River basin in Wyoming, and 10 their distribution in a checkerboard pattern, percent of Wyoming’s Washakie basin. In and by the relatively poor quality of the oil shale resource, It is possible that the railroad general, the private holdings are located near the