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402.5 is RUEDI DAM AND RESERVOIR, COLO. diesel, and other fuels equin,lent to the highest qllality products manufactured from petroleum. E c0l1o-mic8 Many statements have been made regarding ~,he competitive position of shale oil products when pI:odnced eommeremlly. All are based on estimates of cost., usually derIved from p,lot-plant dat.1. Smee shale oil is not produced commercially in this country, there is a certain degree of uncerta.inty in appraising its economic attrnctivene!3s. Carefnl engineering studies of the larp:e-scale applicat.ion of the new methods developed for oil shale utilization indicate that shale oil may cost no more, and perhaps less, than new domestic petroleum. It is estimated that crude shale oil eould be produced and saId profit- ably for a wellhead price of no more than $2.,0 per barrel. By com- parison, the posted prices of Rocky Mountain area crude oils range from $1.81 ta $3.10 per barrel. Quality and location determines the price level for a specifie erude oil. The investment for shale oil production facilit.ies of signifieant out- put is sizable. A Q5,000-bauel-per-day plant may east from $30 mil- lion to $50 million depending on locat.ion, retorting process selected, and the degree of refining eonducted at the proonctlOn site. In addi- tion, pipelines must be provided to move the oil either to existing trunk pipelInes or to a market area. 1Vhile t.he minimmn investment for economical production cost i~ high, the unit investment. seems reasonable compared with current. ex['loration and development costs for petroleum. One est.imator (4,) places the investment in new and replacement petroleum produc- tive capacity in the United States between 19,5 and 1960 at $7,500 per daily barrel. Shale oil capaeity certainly is less than this figure. Why 7/0 commercial shale oil production? Since the liftinil" of 'Vorld War II rest.rictions, there has been no shorta!!"e of petroleum prodncts for the American eonsumer. Unt.il 1948, the Umted States produced more oil than it consumed and was a net exporter of petroleum and petroleum produets. As foreign erude oil became available in quantity at low east, we have gradually increased imports until, on balance, we are a net importer to the ext.ent of 1[, to 20 pereent of our petroleum demand. Shale oil is not being produced eommerciu.Jlv beea.use there is no market for additional oil supplies. The N a,tional Petroleum Council estima.tes that we now' could increase petroleum production from pres- ent SOllrces by at least. 2 million barrels per day, were there a. market. This production is available with little additional investment, but it c'ft.nnot compete with foreign ilnports. Owing to sha.le oil's large inItial investment and the necessity to ut.ilize new teclmology! production On a commercial basis will begin only when presently de,'eloped petroleum prodnetive capacity is being used to the maximum practical extent and there is protection from eompetition by imported oil. Growth of tile shale lJldu....try It/hI' 19(~'.~; \Vhile the water requirements for t,he f'xpansion of the indust.ry nfter IlliG are not. considered in this report, it should not. he implied t.hat. f:,'T'owt.h win stop at this point.