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36 3983 RUEDI DAM AND RESERVOIR, COLO. has not kept pace with demand during the past deeade. It is predieted in the Cameron & Jones report that domestic produetion of petroleum will continue to increase until the period 1965 to 1970 and then will begin a g-rad ual decline. It is stated in the report that the reason for tills declme will not neeessarily be tJmt the industry cannot locate new Sources of petroleum but rather that. the eost of oil from alternative sourees, such as oil shale, will be less than the cost of locating and prodllcincr petroleum from new sources. The widening gap between demand and petroleum production in the United States has been filled with imports from foreign SOllrce8. It is stated in the Cameron & Jones report that this practice can probably be followed through 1965 without the nation beeoming oved;y dependent upon oversea oil. It was eoncluded t.hat the 1960-65 period would be a logical time for initial eommercial development of the oil shale industry. De,'elopment of the oil shale industry is expeeted to proceed in t.he following four distinct phases: phase I, experimental; phase II, protot.):t'e; phase III, primary expansion; phase IV, secondary expansIOn. The experimental phase started about. 15 years ago and is now in its final stages. Durmg this period methods have been developed for each step in t.he productIOn of shale fucls. The prototype phase would invol\'e the first commercial develop- ment. of an oil shale industry which would probably be located 111 the Grand Valley-De Beque area.. The objeet.ive of the prototype phase would not be t.o produce large quantities of oil, but to firmly establish t.he technology and economies of shale fuels before making the large capital investments required for shale oil to contributo significantly to o,'erall oil supply. Existing refineries, oil transporta- tion faeilities, and local labor would probably be utilized insofar as possible during this phase. After operation of the prototype development for a sufficient period to demonstrate the soundness of initially adopted mining and retort- ing methods or to make improvements in the methods, it is antici. pated that. the oil shale industry would be expanded. Refining fa- "ilities would be established in the local area, additional pipeline facilities for trnnsporting- oil would be constructed, and means of processing and utilizing the shale oil byproduets would be developed. The primary expansion would probably occur during the 1965-1970 period and would be located along the Colorado River between Rifle and De Beque and in the Parachnte and Roan Creek areas. The growth of the oil shale industry following the primary ex- pansion period would he rapid. In t.he Cameron & .Tones report. it was estimated that by 107:) shale oil production would reach 1,250,000 barrels per day and that a local population inerease of 340,000 would be sllpported by the oil shale developmeut and related industries. About 80 percent of the shale oil production wOllld be from the area along t.he Colorado River between the Rifle and De Reque and in t.he adjacent Parachute and Roan Creek area~. The remaining 20 pe.rcent of t.he production would be from the Piceance Creek area to the nort.h and from northeastern Utah. Ammonia and sulfur would probably be the principal byproduets. --I