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" 36 372 :3 RUEDI DAM AND RESERVOIR, COLO. has not kept pace with demand during the past decade. It is predicted in the Cameron & Jones report that domestic production of petroleum will continue to increase until the period 1965 to 1970 and then will begin a ~adual decline. It is stated in the report that the reason for this declme will not necessarily be that the industry carulOt locate new sources of petroleum but rather that the cost of oil from alternative sources, such as oil shale, will be less than the cost of locating and producing petroleum from new sources. The wIdening gap between demand and petroleum production in the United States has been filled with imports from foreign sources. It is stated in the Cameron & Jones repOli; that this practice can probably be followed through 1965 without the nation becoming overly dependent upon oversea oil. It was concluded that t.he 1960-65 period would be a logical time for initial commercial development of the oil shale industry. Development of t.he oil shale industry is expected to proceed in the following four distinct phases: phase I, experimental; phase II, protot.J:pej phase III, primary expansion; phase IV, secondary expanSIOn. The experime-ntal phase started about 15 years ago and is now in its final stages. Durlll[[ t,his period methods have been develupeu for each step in the production of shale fuels. The prototype phase wonld involve the first commercial develop- ment of an oil shale industry which would probably be located III the Grand Valley-De Bcqne area. The objective of the prototype phase would not be. to produce large quantities of oil, bnt to firmly est..blish t.he technology and eCDnomics of shale fuels before making the large capital ill\'estments re{luired for shnle oil to contribute significantly to overall oil supply. Existing refineries, oil transporta- tion facilities, and local labor' would probably be utilized insofar as possible during this phase. After operation of the prototvpe development for a sufficient period to demonstrate the soundness of initially adopted mining and retort- ing met.hods or to make improvements in t.he methods, it is antici- pated that the oil shale industry would be expanded. Refining fa- cilities would be establislwd in the local area, additional pipeline facilities for transporting oil would be constructed, and means of processing and utilizing the shale oil by products would be dm'eloped. The primary expansion would probably occur during the W65-1970 period and would be located along the Colorado River between Rifle and De Beque and in the Parachute and Roan Creek arMS. The gl'Owth of the oil shale industry following the primary ex- pansion period would be rapid. In the Cameron & .Tones report it was estimated that by 197;' shale oil production would rench 1,250,000 barrels pe,r day nnd thnt a locnl popuh1tion increase of 340,000 would be supported by (,he oil shale development und related industries. About SO percent of the shnle oil production would be from the area . along; the Colorado Ri,'er between the Rifle and De Beqlle and in t.he adjacent, Parachute and Roan Creek arens. The remaining 20 percent. of the prorluctioIl would he from the. Piceance Creek area t.o t.he nort.h nnd from northeastern Utah. Ammonia and sulfur would probably he the principal byproducts.