23oS0/a Sr ntfletlic - fac is ® II1tJ OIL SHALE 0 COAL 0 OIL SANDS VOLUME 19 - NUMBER 4 DECEMBER 1982 QUARTERLY Tell Ertl Repository Arihur Lakes Library 't?c!o School of Mines ROCKY MOUNTAIN DIVISION 0 THE PACE COMPANY CONSULTANTS & ENGINEERS, INC. Peg. U.S. Pat. OFF. Pace Synthetic Fuels Report is published by the Rocky Mountain Division of the Pace Company Consultants & Engineers, Inc. as a multi-client service and is intended for the sole use of the clients or organizations affiliated with clients by virtue of a relationship equivalent to 51 percent or greater ownership. Pace Synthetic Fuels Report is protected by the copyright laws of the United States; reproduction of any part of the publication requires the express permission of the Rocky Mountain Division of the Pace Company Consultants & Engineers, Inc. The Rocky Mountain Division has provided energy consulting and engineering services since 1955. The Division's experience includes resource evaluation, process development and design, systems planning, marketing studies, licensor comparisons, environmental planning, and economic analysis. The Synthetic Fuels Analysis group prepares a variety of periodic and other reports analyzing developments in the energy field. ROCKY MOUNTAIN DIVISION THE PACE COMPANY CONSULTANTS & ENGINEERS, INC. GENERL MANAGER JERRY E. SINOR MANAGING EDITORS AGNES K. OUBBERLY RONALD L. GIST CONTRIBUTING EDITORS TREVOR R. ELLIS MICHAEL L. GREGG JOE J. LETO GEORGE N. ONARA RHONOA J. PAXSON PAUL 0. ROLNIAK PRODUCTION STAFF SHIRLEY A. JOHNSON EUGENE L. JOJOLA REBECCA N. PRYOR WELANA WENOORFF 650 S. CHERRY ST. DENVER, COLORADO B0222-1883 (303} 321-3919 TELEX: 45-0577 PRMO DVR MICROFICHE COPIES AVAILABLE CONTACT ANY PSFR STAFF MEMBER CONTENTS HIGHLIGHTS ..............................A-i I. GENERAL ENERGY POLICY AND FORECASTS National Energy Policy Needed . 1-1 Synfuels Contributes Little In "World Energy Outlook . 1-4 LEA Presents Policy and Programs of Member Countries . 1-9 OTA Report Stresses Need For Major Effort To Reduce Oil Imports . 1-10 RESOURCES Applications of Geostatistics To Energy Minerals ...................115 Federal Land Energy Resource Data Published . 1-17 INTERNATIONAL Japanese Involvement In Synthetic Fuels Significant ..................biB World Bank Sees Methanol As Opportunity For Developing Countries . 1-19 GOVERNMENT Synthetic Fuels Corporation Announces Plan To Assist Three Projects . 1-22 Synthetic Fuels Corporation Outreach Initiative Described . 1-23 Synthetic Fuels Corporation Elects Officers . 1-23 Energy Preparedness Act Mandates Description Of Presidential Authority In Energy Crisis ....... 1-23 Congressional Research Service Report Looks At Synfuels Industry Problems . 1-25 Hodel Confirmed As New Secretary Of The Department Of Energy . 1-25 GAO Report Faults DOE For Not Performing According to Statute . 1-25 ECONOMICS Change In Methods Of Costing Synfuels Plants Proposed . 1-28 ENVIRONMENT DOE's Health Effects Research and Analysis Program Looks At Synfuels . 1-29 Clean Air Act Waivers Granted In North Dakota ................... b29 RECENT GENERAL PUBLICATIONS . 1-33 COMING EVENTS . 1-34 II. OIL SHALE PROJECT ACTIVITIES Paraho-Ute Project Is Described . 2-1 Board Approves Colony Reclamation Plan . 2-4 Rundle Oil Shale Tested By TOSCO . 2-5 CORPORATION Paraho Development Corporation Relocates Its Main Offices ...............28 TOSCO Forms A New Oil Shale Group . 2-8 GOVERNMENT SVC Approves Draft Targeted Solicitation For Oil Shale 2-9 DOD Contracts Geokinetics To Refine Shale Oil 2-9 DOE Awards Contracts For Eastern Oil Shale Processes..... 2-10 ENERGY POLICY Energy Interaction Council Discusses Oil Shale ....... 2-12 ECONOMICS Comparative Economics Of Colony And Union Oil Shale Projects' 2-13 TECHNOLOGY Retorting Oil Shale By Electrical Resistive Heating 2-19 2-25 Continuous Oil Shale Miner Described Grouting Oil Shale Mines With Spent Shale ........ 2-25 Index To Oil Shale Symposia Proceedings Issued 2-29 INTERNATIONAL Yaamba Joint Venture Signs Contracts For Oil Shale Feasibility Study 2-31 ENVIRONMENTAL Draft Report Summmarizes Results Of Cumulative Impact Study 2-32 NOSR #1 and #3 - Final Programmatic EIS Issued ...... 2-35 AMC/API Comment On Prototype Oil Shale Leasing DEIS 2-36 Oil Shale Environmental Advisory Panel Charter Is Renewed 2-37 WATER Water Applications Related To Oil Shale 2-38 RESOURCES Oak Ridge Assesses Chattanooga Shale ......... 2-39 BLM Examines ERTL Claims ............ 2-42 SOCIOECONOMIC Impact Funds Requested By Colorado Local Governments. 2-47 STATUS OF OIL SHALE PROJECTS 2-48 RECENT OIL SHALE PUBLICATIONS .......... 2-56 III. OIL SANDS PROJECT ACTIVITIES GNC, Chevron Proceed With Tar Sand Project 3-1 Cedar Camp Tar Sand Project Is Proposed 3-4 Enercor Rainbow Project Outlined In PDEIS 3-7 ENPEX Project Described ........ 3-13 CORPORATION Suncor To Increase Tar Sands Reserves 3-15 GOVERNMENT U.S. and Canada Sign Tar Sands Agreements 3-16 Final Operating Regulations For Tar Sands Are Issued 3-16 II ENERGY POLICIES Tar Sands Mining Evaluated . 3-18 ECONOMICS Results of Natomas Feasibility Study Are Discussed . 3-22 TECHNOLOGY Oleophilie Sieve Process Tar Sands Outlined . 3-27 RESOURCES Western Kentucky Tar Sands .......................... 333 STATUS OF OIL SANDS PROJECTS . 3-36 RECENT OIL SANDS PUBLICATIONS . 3-55 IV. COAL PROJECT ACTIVITIES Status Of Coal Projects Applying To The SFC For Assistance . 4-1 Ashland Withdraws From The Breckinridge Project .................. 41 Hampshire Energy Project Postponed . 4-1 Activities At Sasol One, Two, and Three ..................... 4-2 ANR Discussing A Second Phase Of The Great Plains Project ............... 4-7 CORPORATION C-E Lummus Active With Two Coal Conversion Processes . 4-9 GOVERNMENT GAO Analyzes Government Involvement In High-Btu Gasification . 4-10 The New Federal Coal Leasing Regulations . 4-11 ENERGY POLICIES Second Congressional Hearing On The Use Of Methanol As An Alternative To Gasoline ........ 4-14 ECONOMICS - Costs of Producing Methanol And Medium-Btu Gas By UCG . 4-19 Combined Cycle Plant Economics Using Air and Oxygen Blown Gasifiers . 4-26 TECHNOLOGY Use of Battelle Treated Coal To Produce Low-Sulfur Fuel Gas . 4-34 Status of Direct Methanation Research At GRI . 4-38 Coal Liquefaction Using Basic Nitrogen Heterocyclic Solvents . 4-42 INTERNATIONAL Coal Conversion Activities In West Germany . 4-45 ENVIRONMENT Wastewater Treatment For The Great Plains Project . 4-53 / Ill RESOURCES 001 Bans Coal Leasing To Railroad-Affiliated Energy Firms 4-62 Powder River Basin Leasing Activities ...... 4-62 Green River-Hams Fork Region Leasing Activities. 4-64 STATUS OF COAL PROJECTS ......... RECENT COAL PUBLICATIONS 4-118 iv V. APPENDIX Energy Emegeney Preparedness Act of 1982 .......... 1 SFC Draft Targeted Solicitation for Oil Shale Projects ....... 5-5 Opinion of the DOl Solicitor Concerning Leasing of Federal Coal to Railroads 5-31 Glossary of Terms Relative to Geostatistics .......... 5-36 HIGHLIGHTS• General Accounting Office Suggests Net Energy Assessments Be Used By DOE The General Accounting Office (GAO) released a report which recommends that the Department of Energy (DOE) improve its data base and perform a net energy analysis before funding projects. According to GAO: "decision making that spends scarce taxpayer resources on the basis of inconsistent, unvalidated, and low- quality data constitutes an inefficient management of public statutory require- ments of Public Law 93-571 and title II of Public Law 96-294 and DOE's explicit promise to the House Committee on Government Operations to implement NEA." A review of GAO's report including methodology for a net energy analysis is on page 1-25. SF0 Selects Three Projects For Support At their Board meeting in December, the Synthetic Fuels Corporation announced that three projects from Phase II of the Second Solicitation had progressed to the point that the Corporation will sign letters of intent with the projects before the January board meeting. These three are: First Colony peat-to-methanol project in North Carolina; the Santa Rosa oil sands project in New Mexico; and the Calsyn heavy oil conversion project in California. The major provisions of the letters of intent proposed for the three projects are discussed in the General Section on page 1-22. Two Coal-Based Projects Suffer Setbacks Although three projects were selected for SFC support, two coal-based projects that applied to the SFC for assistance have experienced major problems. On November 22, 1982, Ashland Oil announced it was withdrawing from the Breckin- ridge Project in Kentucky. Further information on Ashland's decision can be found in the article beginning on page 4-1. In other developments, the four remaining sponsors of the proposed Hampshire Energy Project near Gillette, Wyoming, announced on December 8, 1982, that they were postponing the start of construction of the project. As described on pages 4-1 to 4-2, the project had recently achieved several significant milestones, but had been unable to attract additional equity sponsors to replace Standard Oil Company of Ohio. National Energy Plan Necessary For Economic Recovery And Security Our present recession is due in great measure to our dependence on imported oil. The article on Page 1-1 gives suggestions to improve both our economy and energy security. OTA Also Stresses Need For Government Energy Policy The Office of Technology Assessment (OTA) recently released a report to assist Congress in addressing several options that could reduce our dependence on imported oil. One important point presented in the report is that the market place cannot be relied upon to decrease our dependence on imported oil and that the government must become involved. The report is discussed on page 1-10. SYNTHETIC FUELS REPORT, DECEMBER 1982 A-i HIGHLIGHTS World Energy Outlook Sees Synfuels Contributing Little To World Energy Supply In the second "World Energy Outlook" the amount of energy that will be derived from synthetic fuels in the near future is judged to be minimal. The report sees the present oil glut as short term with a tight oil market developing in the late 1980's. A discussion of the study is on page 1-4.