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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />~ <br /> <br />~~~')it seems likely that a shale oil market exceeding 500,000 <br />barrels per day will exist. <br />The other major market for shale oil from Phase IV <br />probably will be in the Middle West, Petroleum and <br />petroleum products now come to this area, largely by <br />pipeline, from Texas, Oklahoma, the Rocky Mountain area, <br />and Canada. Production in the area is small compared with <br />demand. The output of a 1200 mile, 500,000 barrel per day <br />shale oil pipeline to the Chicago area should be easily <br />absorbed 10 or 15 years from now. <br />Local demand for shale oil products will have increas- <br />ed several-fold on account of the increase in population <br />and the level of industrial activity. This demand will be <br />in the range of 50,000 barrels per day, <br />We anticipate significant changes in the technology <br />as a consequence of Phases II and III. The methods used <br />for Phase IV production will require less investment per <br />unit of production, will make better use cf the raw <br />material, giving higher yields of superior products and <br />most likely, will utilize the lower grade shales not now <br />considered economical. However, the probability of using <br />in-situ combustion, atomic explosions or some other revo- <br />lutionary method during this period seems remote. <br />We believe that refining technology and economic con- <br />ditions will improve such that in the new refineries built <br />during Phase IV, the crude shale oil will be hydrogenated <br />directly rather than being coked before hydrogenation. <br />This step will result in a significant increase in the yield <br />of liquid product and, of course, will eliminate coke as a <br />-23- <br />