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<br />'. <br /> <br />-- <br /> <br />Wed"J,!, <br /> <br />Interior spurs shale development <br /> <br />IContinut'd rrom pagl' I) <br />(('nt prnlutvp<' leasinfi pro- <br />~ram are scheduled 10 be <br />known <br />If the mdus!r\' is \0 t'xpand <br />the report said dt'Clsions or <br />support faclhlit''i - new waler <br />din>rsion proJects. power <br />generalHln and Iransmjs~llIr <br />facilitif;'S. reservoirs. hlghl'ia~'~ <br />and {'nlire n{'\\ tOI'''ns - must <br />l"X'rnademlhe next few years <br />:\Ioreover. the rep<:lrt said <br />the 5.120.acre limitation on <br />present lease size would ha\"t' <br />to Ix> abandoned to encoura~e <br />dc>\'elopment of shale in Utah <br />and Wyoming. where Ihf' <br />ImO\\1l deposlts ar{'n', as rich <br />as those in Co\,)radu <br />It call('lJ for mcreas('d !:lod <br />ttadt's betw{'{'n the ~O\'t'rn- <br />menl and oil companies to <br />"block up" adequate tr;lels for <br />shale develnprnlc'nt. and reC(lm. <br />mended a c1anfication of laws <br />to permit leaseholders tn us!' <br />off.site prOp<'rty for such pur- <br />poses as spent shalli' disposal <br />and con!>tructinn of !>upP".rt <br />facilities. <br />"" major key toacceleratt"d <br />oil shale development is the <br />rate at which public lands 3rt" <br />leased and tne provisions that <br />pertain to them," the report <br />said "Howe\'er. a decision to <br />implement an accelt'rated <br />schedule must be mad" short!v <br />if significant results are to bE- <br />realized in the tlmt' frame <br />under coo.';ideration in Ihis re- <br />port. thrau!!:h 19':lO" <br /> <br />f-:rO.....o\IIC '\'n::\iIVES 10 <br />lower the risks of shale de\'el- <br />opment. such as low interest <br />loans. increased deplt'tion <br />allowanct's. aecelerated de. <br />preciation, tax credits nnd re- <br />duced rovalties wen' discusqod <br />briefly In Ihl" report and dis. <br />carded In fa\'or of price floor <br />~uarantl"i's and government <br />purch.'lseconlracts. <br />~ price floor would guar. <br />antee a minimum price for <br />shale oil. If the price of oil <br />dropped below the minimum. <br />the federal govemment would <br />tlt'gin buying shale oil ,d the <br />guaranl('{'d price. <br />But oil company profits <br />under that scheme could still <br />fluctuale with tht' market. the <br />(('purt rt'asonl.'fi. and therefore <br />tilt' purchast' l'onlract incen- <br />tive would be even be-tlt'r fur <br />Ih!' 011 cnmp;~ni!'s It ('ould be <br />murt' ('astly fur the til~payer, <br />[lIlI'ie\'cr. <br />The purchase agr{,l"ment <br />concept. fa\'ored abo\.e all <br />others b\" the framers of the reo <br />~rt. would makt' the gO\'t'rn- <br />ITK'nl a major purchaser of <br />shale oiL The pritt' would be <br />set at an agreeable Jew'l and <br />remain fixed regardless of <br />....-hat lhe regular Oll market <br />did, <br />tn recent months. go\'t'rn- <br />ment officials lI.n'e speculated <br />that 3 lowering of :"oliddle East <br />oil prices could ha\'e a de\'as- <br />tating dfect on oil shale de\'el- <br />opment. <br /> <br />TilE REPORT nt:YiS the <br /> <br />govem~nt price guaranl('{'s <br />as ~"iential 10 ue\'e!opmenl of <br />the industry <br />The rrport said tht>re is <br />enough water to handlt' e\"en <br />the most 3cce!cr,ltl'{j gro.....th of <br />the- oil shale indlJstr\". but Ihe <br />nghl to use Ihat water is in <br />doubt. <br />While there is a 13~q:e <br />amount of ~rotlnd',\"atl'r in the <br />oil shale region. the report said <br />that ....ill bt' qUlckh' consumed <br />during initial development <br />stages Surfal'e waters will <br />supply most of Ihe needs of a <br />future Oil shale industry. It <br />said <br />COlwersionnf the use of that <br />....ater for Oll shale and olhl"r <br />rompt'tingellergYUSf'ssuch as <br />coal J;.'lsiflc;'ltion would reqllire <br />dl\.t'rtin~ It from many present <br />~es-chll'flya~ricultllrp <br />'liEW lH\lS and rl's.'n'oirs <br />would hav!' to be In opt'ratlun <br />b"thf'f'ar!,'1980stoacCllmmo. <br />d.1te the expansion envISioned <br />in the report. ThiS \\uuld in. <br />clude unbuilt waler prOJe\.ts. <br />some of which are C'onlro\'er. <br />sial. like West Olvidt'. Yellow <br />Jacket and Yamp,). the reporl <br />said <br />Other major problems ex, <br />pected to be caused by a rapid <br />expansion of oil shale dl.'velop- <br />menl incllldE'd scrious .....ater <br />and air qualilY degradation <br />and the po"sible breakdo.....n of <br />the social fabric in rural areas <br />becau.<;e of rapid urbanization <br />Intl.'rior Dep..1rtml"nt official <br />Harry Johnson. chairman of <br /> <br />the task force. minimized the <br />~{'port's significaoce- Tuesday. <br />saying it Nntained no policy <br />choices. It was on1\- one of <br />many prt'part'd at FE.-\'s re- <br />'luest. he said, <br />But an rEA spokesman ft'lt <br />differently, saying the reports <br />',\'l'ft" the '"heart'. of Ihe re. <br />:-;ourceeslllOate-scolOmg out of <br />lhelnterior Department. <br /> <br />0040 <br />