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<br />View from the in~ide
<br />As indu~I'" <,ees It, the leaSlnR 01 public lands is a ft'sponse
<br />to the ine\'itable. Oil-shale e\pcutives point out that the
<br />oil-shale dt'pmil'> 01 th(' ,\1ountain We...! are probabl)' the
<br />.....orld's larg{'q h\'drocarbon resource-and \'f'1 very rilllp is
<br />known about the environmental impacls lhal miRhl he
<br />caused bv d{'\'(>lopmg them, or the CO<,I<, re,>ulling trom lhe<of"
<br />impacts. or even about tht-'ir commercial viability. Ttw\'
<br />emphasize that although known It:''chnologll''<' will be used in
<br />the leasing program, thew t('chnologies have ne\,pr been
<br />tried on J commercial ,>cale.
<br />Indu'>tr, ,>ouree.. also slrE'SS that the iedefal gO\'t'rnment
<br />hdS ownli'd 80 percent oj the oil-..h...!e dt'pmil'> lor a long
<br />lime, and has done nothing with them-unlil no..... a timE' at
<br />national ('risi... And. the\" sa\', a national cri..is db...olulE>lv
<br />demand~ somE> re..pon..e on the part oi the iedt'r.)1 govern-
<br />ment.
<br />"I think iI's prpltv mu('h like the Ancipnt Marinf'r," sav...
<br />Dole at Colon..... "Energ... energv eVl'rvwherp .)nd not J drop
<br />to use." And. ht' adds. the iedf'rJllt'a..ing program is onh'
<br />planning 10 l('.)\t' a liUlt' mort' than 30.000 acrE'S 01 thp nearlv
<br />l1-million-acre area-an .'iniinitesimal amount" oi the total
<br />oil-shalt, region.
<br />As lor thp term.. 01 the leasing program, indust!') has its
<br />own economic (oncerns. In parlicular, indu..trv t'''perts point
<br />to the competition invol....~,d. Tht' program's rritle.. haw said
<br />that competlllve bidding preclude.. all but thl' large~! oil
<br />companies. with thp best-known tNhnologles. irom public
<br />oil-shalt' ttact.... In th(' indu..lfV'S vie..... compC'lit!v't' bidding
<br />provides a good hedge against gO\t'rnmem..giveav....av..... and
<br />the.... point 10 tht' $210 million bid bv Standard Oil ot Indiana
<br />and tht' Cult Oil Co. for Ihe richt'...t oil-...halt' ttact, Colorado
<br />tract C-a. Thi.. bid ea...ih toppt'd those of sevt'n other hot
<br />conlendl"" for this prime site.
<br />And With competitivt' bidding bv privatt' industrv, ".1\..
<br />Pior,ht'imer oi Paraho. "The Interior Df'pl. i.. going to obtain
<br />the hjgh~'...t pric(' that the govetment could ('\P~'ct to get:' He
<br />adds: "\\'holl industry i.. t,,'ing to do i... to get into this thing to
<br />make mom'v". and irom indu..try'.. standpomt. tht' t'conom-
<br />ics oi oil shale are clouded v\;th un(t'rtamtit'...
<br />One ke\ ('\ampll' pain led oul b, indu..tn. e...pt'rts i.. that
<br />..ince thNt' nl"er ha.. bt"f'n a commf'fClal..halc' plant built. no
<br />one knO\" il II \\i11 co"l 56 a barrel or S 16 or .. 10 dt"vt'lop
<br />shale oil. And ..inH' tht' co..ts art' unknown, the\ tel'l tht'
<br />leasing prowam cannot be a "gin:>awav."
<br />The samt" economic qut'stion mark i.)ct'.. companlt'~ that
<br />will dt'vefop on pm'ale land, For example, Dolt' 01 Colonv,
<br />which is mm pl,3I1ning 10 build a commercial plant on rHl\alt'
<br />land lhat will pron'.... b6 tim~'.. as much ..hale ,1'0 its ..emi-
<br />....orks plant. sa,... '.\\'e are perrecth willin~ to rl"k a \et\
<br />large ..um 01 mone, that our CO'" e"llmale" art' rlghl '"0 I
<br />think that ,\hat \\10' are doing in our parlicular lO..taoct' I" In
<br />the counl""<' bt"..t interest..:.
<br />Other oil-;.hal~' {'\{'culive'.. t'mpha..izt' thai the' Ipa..ing
<br />program ha~ ...everal built-in ri..k.. ror indu;.trl. for instance.
<br />Piorzheimer points out thaI "When \OU ...ubmll a bid, vou
<br />
<br />28 rxECUII\'( WI~t IU'CH"'A.RI.. EtlITIO' f..h'~~n. 1'l~~
<br />
<br />have to present a \'erl prelimina" development program for
<br />Your lease. When Ihe government accepts the bid on this
<br />basis. it doesn't necessarily mean it accepts your plan. In 3
<br />"ears, .liter three bonus installmenb, vou must submil a
<br />definitive de\elopmt'nt plan. Jt the governmenl turns il
<br />dm\n, lhen you can't dpvt'lop the I('a...e as you lhought vou
<br />would and vou can'l gt.t ,our mone\ back. So the induslt\,
<br />mu...t takt' this m.k and go Im\ard in the expectation that all
<br />interest group... v\ill bp rt'asonable olbout the way tht" lea..e is
<br />10 be de\t"lopt'd:'
<br />Piorzheimer add.. thai a (ompa", will run inlo t"....en grealt'r
<br />tinancial hazard.. ii II i... notlt'admg to\\ard a commercial plant
<br />bv tht' Hllh vear oi its least". In this ca..e, he e"plain.... the
<br />compam will ha\'e to ..tart paving advance minimum rmal-
<br />tie.., which can run into millions at dollar.. and which will not
<br />be repaid until the compan\ has started aclual production.
<br />"So this," he ..avs, '.i.. a ..\rong incentlvl' 10 get inlo produc-
<br />lion:' ProrzhPlmer also ..t"('.. Iht' deductions and credits
<br />allO\H'd bv the program a.. IOcenth't'S. for example, he sa\<;.
<br />"Some oi tht' deductions aJlm\ed tor development are ..pt'-
<br />cilicallv dl'signpd 10 speed it up."
<br />AnOlht'r mdus"" ..ourct' points oul that throughout histot\,
<br />the iederal gO\'t'rnment has givf'n such incentives to get new
<br />industrit's stolfted. for e\amplt', when tht' railroad.. came
<br />acro..~ the United States. tht.v '\ere given PVI't\' other to\\n-
<br />ship-a trt'mt'ndous inCt'nti\e to build. Thus the oil-shalt'
<br />industry ieC'ls thaI. slmilarl~', it' the lederal government leel.. it
<br />i~ in tht' bl'st intere<ols oi the pt'ople at tht" United Stales to
<br />dt"velop a good dome..tic c'nt'rg~' "uppl~', ..uch incf'nti\'('~
<br />should ht' given 10 bring uil shale on much more rapid"
<br />
<br />Zeroing in on the feds
<br />
<br />,\'1mt 01 tht' It'a~ing program's crilics sa\' that tht" oil
<br />companies developing ...hale do run ri..k<;. And tht'v agret'
<br />Ihat inct'ntiv~'... are nt'ces..at\' to ..tlmulale thl' dt"velopmt"nt or
<br />a npeded t'nl'tg\ re..ourn'---but tht"v do nOllike Ihe amounts
<br />or Iprm... allm\ed bv the iederal It'as..s.
<br />One 01 thl'se critics. Vim Wtight 01 the Colorado Op~'n
<br />Space Council. bC'liE',t,.. that the fault hes nol with the oil
<br />compaOlf''', but With thl' tedNal government. "I iet'ltht' oil
<br />compaOlP" havt' bt'en hont'..l to thl'" point," she sa\'s. "The"
<br />\\ant to make a prollt on oil ..hale-but WE' ju<ol don't havt' to
<br />glH' il to them. And it'... not in human naturt" iortht"m to gi\t'
<br />awa\ lht'ir pO\\er."
<br />In the end. the It'a<;mg quesllon boil... do\\n to tht' same
<br />e..~t'nce a.. tht. othf'r qut"..tions. ..\s most sourceo;" trom
<br />indu<olrial 10 go\ernmt'ntal to en\lronmental agree, in the
<br />ract' 01 a nalional enl'rg' cri<,i';'. 0,1 ...halt" mu...t int'vitabh bt,
<br />dt'\'t'lopt'd. The que..tlon... at hm\. whert' and WIth V\h.lt
<br />gmt'rnmenl m\ol\eml'nt have ral...t'd a debatE" oi nalional
<br />proportIons. >,om", ob"NH'r... call1he tt'dt,tal prolohpe pro.
<br />gram a "giH'awav"; otht'r~ ..,1\ it is vital to gt'tthe oil-..hal{'
<br />mdustr, on it.. II'et; and In his announcement oi the leasing
<br />program. Intt'nor St'cretat\' Morton statt'd tholl, m his opin-
<br />ion, '-the pOlential beneiih oUl\\eigh the unol\oidable co..ls
<br />,}nd n..k... mvolved:'
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