REPORT ON ENERGY R&D

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-299-1-14-4
• Release Decision: RIFLIM
• Original Classification: K
• Document Page Count: 28
• Document Creation Date: January 11, 2017
• Document Release Date: October 4, 2010
• Sequence Number: 14
• Publication Date: January 18, 1974
• Content Type: MEMO

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MEMORANDUM - tCTION - 6584
NATIONAL SECURITY COUNCIL
January 18, 1974
MEMORANDUM FOR: SECRETARY KISSINGER
FROM: DAVID D. ELLIOTT
SUBJECT: Report on Energy R&D
On the occasion of the President's meeting with his Foreign Intelligence
Advisory Board (PFIAB) in October, he asked for views on an appropri-
ate FY 75 energy R&D budget. In response, Edward Teller and
John Foster authoried an energy report (Tab C) which offers an example
of such a budget and also reviews the possibilities and problems asso-
ciated with several energy areas.
Information copies of the report were sent to Dr. Ray and Mr. Simon.
RECOMMENDATIONS:
i. That you sign the memorandum summarizing the Pk'i .- A13 report
for the President (Tab I);
That you sign the memorandum for Admiral Anderson and the
contributing members of the PFIAB (Tab A).
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MEMORANDUM W W uxtzvi.,n A.ON 6584
THE WHITE HOUSE
MEMORANDUM FOR: THE PRESIDENT
FROM: HENRY A. KISSINGER
SUBJECT: Report on Energy R&D
In response to your request, your Foreign Intelligence Advisory Board
(PFIAB) has submitted a short report (Tab C) on the prospects for R&D
to help in the solution of our energy problems and has offered an example
of an appropriate FY 75 budget (Tab B). This energy R&D budget is
summarized below and contrasted to the proposal of Chairman Ray.
PFIAB's
Su ested Budget
Chairman Ray's
Proposal
Reduced Consumption
$ 5 million
$ 30 million
Improved Efficiency
105
136
Oil, Gas, Coal
660
563
Nuclear j~',. is siuu
530
73?.
Fusion & Other Energy
Sources
170
217
ment
er Develo
M
30
48
p
anpow
$ 1, 500 million $ 1, 726 million
Although somewhat different in detail, the thrusts of the two proposals
are consistent. An exception is the even greater weight given to oil,
gas, and coal R&D by PFIAB. (The existence of such a difference may
indicate the desirability of frequent reviews of the adequacy of support in
this area.)
The PFIAB report also examines both the near-term and more distant
promise of oil discovery and improved efficiency of recovery, oil
extraction from non-conventional sources, enhanced utilization of coal
and gas, nuclear generation, and geothermal and solar energy.
You may be particularly interested in highlights relating to improvements
in domestic oil production and the acceleration of oil exploration.
We now extract one-third of our oil deposits, but new (fire
drive) and old (e. g. , hydrofracture) techniques for secondary
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recovery might enable us to extract up to another third --
effectively doubling the domestic supply. Some of these
methods are proprietary, and we need to consider how to induce
cooperation among companies.
-~ Most continental shelf exploration has occurred at depths less than
100 feet. Accelerated prospecting, search at greater depths,
coordinated use of scarce drilling equipment, and faster develop-
ment of rapid drilling techniques may lead to the discovery of
great additional oil supplies in a relative short time.
In connection with management and manpower issues, the report (1) suggests
that consideration be given to recruiting the top management for the Energy
Research and Development Administration as a team to insure both ex-
cellence and compatibility; (2) urges that the fullest utilization be made of
the highly competent AEC laboratories; and (3) draws attention to a possible
storage of scientific manpower to carry on a vigorous energy R&D program
in the 1980's and 1990's.
The Board was not able, in the time allotted, to draw useful comparisons
between US and Soviet energy R&D efforts, but intends to follow up on this
question.
I have sent a memorandum to PFIAB expressing your appreciation for
their useful effort. Information copies of the report have been forwarded
to Mr. Simon and Dr. Ray. No further action is required.
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THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR
Admiral George W. Anderson, Jr., USN (Ret.)
Chairman, President's Foreign Intelligence Advisory Board
SUBJECT: Report on Energy R&D
The President has asked me to convey his appreciation for the analysis
and thoughts in the Board's report on The Energy Problem and for the
example of an appropriate FY 75 energy R&D budget.
The President has noted your recommendations regarding the man-
agement, priorities, and technical manning of the U. S. energy R&D
effort. The material in this report will 'be a useful reference ,in
addressing the extremely important energy issues which confront us.
The President wishes particularly to thank Dr. Teller and Dr. Foster
for applying their talents to these questions.
Henry A. Kissinger
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 20 High temperature gas turbine
15 Topping, bottoming cycles
30 MHD
TOTAL PROJECTED EXPENDITURES (in millions of dollars)
Technology
-105 Improved efficiency
5 waste fuels
10 Automobile
5 ;Submarine tanker
20 ,Energy transmission, storage
20
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1975 ENERGY R&D BUDGET
'Secondary recovery, drilling
Control oil spills
g0 Stimulation
150
20
30
30
30
20
Oil. Gas, Coal
In situ processing
Clean coal combustion
Particulate precipitation
Low BTU gas
High BTU gas
Low to High BTU conversion
This low figure corresponds to the intention to make minimal
use of regulation.
Can lead to a contribution of more than 10% in the short run.
These two items are related.
We have an agreement to cooperate with the Russians.
More important with regard to waste disposal.
Should depend on cooperation of Detroit.
Important alternative to additional Alaskan pipelines.
Help in better energy management.
This program is likely to be the biggest contribution in the
short run.
The amount is modest compared to the importance of the issue.
The main contribution should come from the private sector.
This is a critical issue in which little research has been
done.
The development of cheap sources of gas and better exploitation:
of residual oil. .
hale
il
s
Important In coal gasification and vitalfor o
Two topics on reconciling energy requirements and environmental
standards.
Conservative approaches connected with coal gasification.
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Oil, Gas, Coal (Cont'd)
20
Gas to methanol
30
Liquefaction (standard)
I
30
Liquefaction (advanced)
40
Underground coal mining
50
Strip mining
20
Environmental animal exp.
40
Environmental studies
530
Fission
120
Reactor safety
80
Uranium enrichment
20
Uranium mining
120
HGTR
20
LWBR
I
30
020 + CANDU
.40
Thorium
80
LMFBR
20
Advanced breeders
170 Fusion + Other
60 V Fusion, using magnetic
confinement
10 Laser fusion
30 Solar heating and cooling of
buildings
10 Ocean, Photo-Bio
60 Geothermal
30 Manpower
Approaches to substitutes for oil.
Page two of budget
Required to make mining acceptable and profitable.
Needed to meet environmental objections.
Needed to relax environmental constraints without
serious health hazard.
Vain future source of electricity.
Insure that not a single accident occurs.
Probably novel methods will be cheaper.
Present scarcity of. fuel by exploiting poorer ores.
Hopeful methods to utilize abundant thorium.
t?'
Presently very popular; should be continued to exploit
past investment.
Main line to attain controlled fusion by slight expansion
of present research.
New and imaginative approach; will not move before the
year 2000.
Could save 10% of oil requirements
Exotic methods to use solar energy.
Alternate source of electrical energy.
feeded to insure technical capabilities beyond 1980.
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1P 1P
THE WHITE HOUSE
WASHINGTON
PRESIDENT'S FOREIGN INTELLIGENCE ADVISORY BOARD
December 7, 1973
Dear Mr. President:
At our meeting with you on 4 October, we briefly discussed the
utilization of federal funds for energy R&D. You requested that
the Board submit its recommendations on the dollar-amounts
which could be meaningfully applied to individual programs
comprising the total energy R&D effort. You also inquired
parenthetically what the Soviet Union and other highly developed
societies are doing in this field.
The enclosed paper was written by Dr. Edward Teller, with the
assistance of Dr. John S. Foster, Jr. It discusses major areas
for the application of R&D funds and includes a projected energy
R&D budget for FY 1975 amounting to a total of $1. 5 billion. It
also-di-s cusses a potentially critical shortage of scientific man-
power and proposes a unique low-cost solution for meeting the
problem.
In light of the prospect that Congress may now approve an energy
research and development agency in this session, I believe the
following recommendations are particularly important:
-- The senior staff of the energy R&D program should be recruited
as a team. This will ameliorate the problem of professional and per-
sonnel differences which so often hamper major efforts of this kind.
-- Many of the senior personnel for the energy R&D agency will
have to come from private industry.
-- In designing the research programs, greatest priority should
go to short-range programs with a payoff established before 1980.
This still permits emphasis on imaginative new programs.
-- Recruitment of technical manpower for the emerging needs
of the government laboratories should receive early attention.
We are unable to adequately answer your question with respect to
what other nations are doing in the energy field. We have levied
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0 IV
a requirement on the Intelligence Community for continuing
information on specific energy R&D programs being undertaken
abroad, as well as for information on the impact of energy on
foreign economic and diplomatic policy. Your energy message
of April 18, 1973 has anticipated the great present need. It
should now be followed up by a plan for cooperation with our
allies, particularly in research. The State Department has been
taking initial steps in this direction. We suggest that you encourage
a rapid follow-up on this action.
I have taken the liberty of sending a copy of this report to the
Chairman of the Atomic Energy Commission, Dixie Lee Ray, and
to the Administrator of the Federal Energy Office, William E.
Simon.
Respectfully yours,
*
. Anderson, Jr.
George
Admiral, USN (Ret.)
Chairman
The President
The White House
Washington, D. C.
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 C.Q'!ua ris
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i V
THE ENERGY PROBLEM
Reasons and Effects of the Enei^g,~Shortage.
Oil has become the most widely used energy source because of its avail-
ability and easy transportation. This in turn has led to a development of
an infrastructure which depends on oil. Thus an oil shortage necessarily
has painful and worldwide consequences. Just such a shortage is developing.
While the per capita energy consumption is increasing in the United
States the main reasons for the shortage lie outside the United States. One
is the rapid recovery of Western 'Europe and of Japan and the increased energy
demand that has gone with this recovery. Another is the anticipation of the
increasing energy demands in the developing world. Greater care in the use
of energy can help, but this is merely a palliative. The predictable increase
of energy requirements will almost certainly create a severe shortage of oil
before the end of this century.
Since domestic production of oil'and gas has not been available in
sufficient quantity using conventional methods, the United States has increasingly
turned to foreign imports. The adverse effects of continuing to do so, both
in a financial sense and in a political sense, are becoming obvious.
The question of Timely Response-
The actions and solutions which we consider can be subdivided into short
range,'medium range, and long range plans. Without trying to be precise, I want
to consider the planning for the 1970s as short range planning, the planning
for the 1980s and 1990s as medium range planning, and the planning for the next
century as long range planning. All'three are necessary, but each has different
characteristics.
Short range pla,is and fiscal,political and regulatory in nature. At
the same time questions of management have to be settled in the short term
and elements of technology will play an important part in making the appropriat3
choice. Decisions concerning the short-range plats are not only the most
urgent,.'but probably also the most difficult..
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Medium range plans are connected with technical developments where the
solutions are either available or at least can be anticipated with reasonably
high probability. While the lead-time in technology is necessarily. of consider-
able duration, medium range plans can become effective by proving (even before
the year 1980) that new and relatively inexpensive energy sources will become
available. In case this can be demonstrated, the anticipated price of oil
may decline and it will be in the interest of the oil-rich countries to sell their
oil before the new energy sources are fully developed.
The long-range planning is concerned with technical solutions which are
desired, but are difficult. In many cases even their feasibility is in question.
Furthermore, the question whether and to what extent the long-range solutions
Will become necessary depends on the success achieved in the medium range.
Important examples of this last category are the massive use of solar energy
(in contrast to. the short-range possibility of heating and cooling small
houses by solar energy), the development of fast breeder reactors, and the real-
ization of economic controlled fusion. From a scientific and technical point
of view the solutions of these problems are the most exciting, but they cannot
be expected to solve our,present urgent problems. This planning should be pursued
and the corresponding research should be supported as an insurance for the
future. On the-other hand, no crash program on long range technologies seems to be
justified. Correspondingly, these problems will not be discussed in great detail.
The Question of Management.
The success of the whole program depends primarily on the'excellence of
the people involved in it. While it is impossible to give a general desription
how to select these people,-and how to operate the system, a few remarks might
prove useful.
The first task is :o secure excellent ieadership. Half a dozen people in
top positions can make sure that the staffing is of high quality on all levels.
It seems necessary for -:he President not only to selE'ct the members of this
top echelon, but also to make the appointments in consultation with the President's
top administrator and ii subsequent consultations with the candidates on the
jobs serving immediately below that administrator. iiy the proper formation of
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this leadership group it may be possible to insure the essential smooth
cooperation between its members and a proper subdivision of the complex task
which they have to accomplish.
It is an important question whether the bulk of the people who will serve
in the organization shall be drafted or whether preference should be given
to those who are eager to serve. The answer is not obvious tome, but I tend
to favor the alternative of voluntary service.
Of all. the existing governmental agencies the AEC has the most firmly
established history in imaginative and massive research producing novel
results. It seems, therefore, appropriate to use the experience of, this branch
of the government as a model. The manpower of the AEC may be considered as one
of the sources from which to draw the personnel for the energy administration.
This contingent will have to be balanced by people drawn from the oil and coal
industries and from corresponding governmental agencies.
It is of great importance to delegate most of the actual research work
to government laboratories. This has proved effective in the work of the
AEC, and also in the USGS. The best results are produced when the laboratories
are entrusted with the planning of their own work, as well as with the execution
of these plans. The central agency in Washington has the extremely. important
task of supervision, of making the funds available, and of balancing the long-range
objectives. This type of operation has the double advantage of on-the-spot
expertise--and a reasonable measure of competition between the different laboratories.
The central agency can make sure that this competition does not degenerate into
uncontrolled du lication.
-Finally attention must be given to the transfer of technology from the
government laboratories to industry.. This may be initiated by Washington but will
have to be executed by the people directly concerned. A transition phase of a
joint endeavcr (which might he.- started early in the game) may be an effective
procedure.
Accelerated Exploration for Oil.
Exploration for oil is the way in which additional supplies can be made
available in the shortest possible time. In the United States the most hopeful
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additional discoveries are likely to be made on the continential shelf. So
far most explorations have occurred at a depth no greater than 100 feet. The
search ~Lftd be intensified at greater depths and there is a conside
probability that substantial amounts of oil will indeed be found. Furthermore,
additional exploration is needed throughout the world and such exploration is
the best early hope to bring about a change inthe_present worldwide shortage.
There are, however, several problems which will have to be faced at the same
time.
The problem of oil spills has made it difficult to proceed with
exploration on the continental shelf surrounding the United States.. The
solution of this problem lies in part in the reliably enforced re ulations that
will make oil spills very improbable. A second technological aid lshe
. _..__ _~_...---~-.... -----
development of methods to clean up oil spills in the
occur.. Research on this topic is badly needed and'should give proper confidence"
which will allow us to proceed with the exploration.
Another problem is the scarcity of drilling-equipment which could worsen if
fre-
steel shortages develop. Coordination between the oil companies of the
world may help. This could also have an effect to offset the impact of OPEC
and more particularly the impact of the Arab boycott.
Undersea exploration throughout the world is an even more ambitious
undertaking and one that is badly needed. The technological expertise of the
U.S. added'to the expertise of our allies could bring about a most welcome
change. In this connection the political question of territorial rights
extending three miles, 12 miles or further from the shoreline 'will play an
important role.
One special case of great interest is the Persian Gulf. Approximately
one-half of the Gulf 'is closer to Iran than to any ether country. Apart from
the international ques-;ions ti~ntioned in the previous paragraph, our friendly
relations with, the Ira,iians should. make it relatively easy to open up this
territory. Because th-2 area is so rich in oil the exploration may take a
relatively short.periol and in less than a,year higMy favorable results may
be obtained. It is, of course, of great importance to obtain agreements
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whereby one could guarantee that any oil discovery will remain available at
some reasonable price far a period like 10 years. Beyond that time I hope
that there will be other energy sources available and the worst of.the shortage
may be over.
A strong reason to advance such drillings is to stake out claims in
view of the developing arrangements of sea-bottom usage. Joint work by the
Western industrialized countries with full support from the governments could
have considerable leverage,
One additional technical question is the development and de
loyment of
'pid drilling techni ues Fortunately, such techniques are beginning to become
available. Their rapid and general implementation and further development
would be particularly important on the continental shelf where the time spent
in drilling is a major factor in determining the cost of the exploration.
possible Improvements in Oo-uesLic 011 Production.
According to present methods of our domestic oil production we are recovering
only one-third of the oil of which we know. Two-thirds remain under the surface,
(the percentage that is available for cheap pumping in the Middle East happens
to be much higher).
Oil companies are engaged in improved recovery methods. One very promising
procedure-that is being developed is the "fire drive". Air is pumped into the
Q U field from one well, the oil is ignited, and the product is pumped out from a
neighboring well. Thus, the fire front is driven from the first well toward
the second. The heat generated decreases the viscosity of the oil. The carbon
dioxide produced in the burning is, driven ahead of the flame, gets dissolved
and probably makes an-even greater contribution to the decrease in viscosity.
This method added to tie older. techniques of hydrofracturing, use of explosives
and use of surfactants will result in more oil which can be removed. Optimistic
estimates would allow z removal of the second one-third of the underground oil,
caving altogether onli one -J the riginal de -if unrecovered.
The work carried cut b several oil com anies is pro rietar Thoucht
should be given t
e could induce the oil companies
to cooperate on this pt-oblem which is of obvious national importance.
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Our known recoverable reserves at $3.50 per barrel are less than 40 billion
barrels. The additional amount that could be made available from U.S. sources
by the methods mentioned (improved secondary recovery and new discoveries) may
well be 300 billion barrels producible at the wellhead. This amount is almost
as'great as the known Arab reserves.
The methods of improved oil production are becoming effective in a gradual
manner. Therefore, in this case we have a contribution to the energy resources
which could in part have a short term impact. A considerable fraction, however,
is to be expected in the medium term.
Solar Heating and Cooling.
The idea to use solar energy has been accepted with enthusiasm by the
public and the politicians. The energy source is ample, inexhaustible and
--completely clean. In this case we are faced with the peculiar situation that
a part of the energy could be made available almost at once, while other
app.; ications -t,-411111 probably not become economical in the short tern? or medium
term.
The difficulty with solar energy is that it is dilute. Its massive
application requires methods to concentrate. the energy and these methods are
expensive. On the other hand the wide distribution of the energy makes it
possible to employ it in heating and in cooling of houses, provided the
structure is not more than three stories high.
The method is relatively simple. It essentially depends'on heating water
and using the hot water to store the energy. Air conditioning can likewise be
accomplished without using electricity, for instance, by employing interaction
of ammonia (used, of course, in a closed cycle) with hot and cold water. The
method-appears to be financially attractive in the l,)wer half or the lower
two-thirds of the United States. Considering this limitation and considering
also the restriction tc. low buildings, one can expect that this method could.
eventually replace 10% of our fuel requirements. By 1980 we can hardl expect-
more more than 5%. Difficulties will be encountered due .o the inertia of the buildin(I
industry. However, the popularity of solar heating is so great that one might
hope to overcome these difficulties. Otherwise, the technology is "state of the
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art" and the main effort should be directed toward faster production and
wider acceptance of the product.
Proposals have been made to generate electricity by concentrating solar
light in the southwestern United States. The capital investment needed for
this undertaking is probably three times as hi the c 'tal inve ment._._
for Fuclear reactors..... Improvements are not likely to occur rapidly, partly
because the usual methods?of concentrating solar energy (the use of mirrors
and of the greenhouse effect) are inherently expensive and partly because.
novel methods (direct photoelectric generation and the imitation of the photosyn-
thesis in plants by chemical methods) is truly adventurous.__One cannot expect
that these methods will pay off before 1930 and it is much more probable that
economic benefits will occur only in the next century
Conventional Coal Gasification and Coal Liquefaction.
In this section I shall discuss the mining of coal and its subsequent
conversion into gas or liquid fuel.
The'most ample supply for these processes (particularly for low sulphur coal)
is found in the Rocky Mountain area. Its distance from our industrial centers
is a slight disadvantage due to the transportation costs of coal. In case of
local coal gasification or coal liquefaction, this disadvantage-is decreased.
The cheapest method of coal production is strip mining. Objections of
environmentalists can be met in part by rehabilitating the vegetation following
the mining operation. In arid regions this rehabilitation may be difficult
and expensive. Selective prohibition, however, should depend on local
conditions, particularly on meteorological conditions.
It is estimated that coal gasification by the Lurgi process (burning the
coal in oxygen at high pressure in the presence of water) will produce high
BTU gas at approximately $1.5 or million BTU.
More advanced technologies already under development might lower this
price to one dollar. This might be cheaper and it would certainly be more
reliable than so:ne.of 1he planned foreign purchases. If air is used instead of
oxygen, a clean low BTU gas will be produced at two-thirds of the price (70~ to
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$1 per million BTU). Although its transportation costs would be too high for
distributed use, this Sas could be produced from highs sulfur coal at power
plant sites where it would be an excellent fuel. These processes would yield
cheaper gas than is obtainable from abroad.
It is relatively inexpensive to transform the obtained gas into a liquid
consisting chiefly of methanol. It is claimed that methanol burns in a much
cleaner way in cars than any conventional oil. An objection to this statement
might be found in the production of small amounts of harmful formaldehyde. This
point requires engineering research and biological research. The retooling
of cars enabling them to burn methanol is relatively minor. One disadvantage
is that the energy in this fuel is less than that of gasoline per unit volume
of fuel. Therefore, cars will have to be filled up more frequently or bigger
tanks will be required.
.It is also possible to polymerize the gas and obtain a product similar to
gasoline. This procedure is being followed in South Africa, who have produced
for some time approximately one-tenth of their gasoline needs in this manner.
The cost of sulfur free. fuel is approximately $6 per barrel, as proved in
engineering practice. The price holds for South Africa where coal is cheap
and the capital investment has been mostly written off.
Improvements of coal liquefaction may be obtained by dissolving the coal
in an organic liquid, freeing it of its ash content and from its sulfur content,
and hydrogenating the coal without first gasifying it. The hydrogen probably
has to be obtained from a coal gasification process. There is some expectation
that this process will turn out to be less expensive than the one practiced at
present in South Africa. Even so, it will be difficeelt to produce oil in
this way for $6 per barrel in the U.S.
In the process just described one may stop short of hydrogenation and simply
precipitate the coal from the solution after it has been purified. This would
give a solid fuel more expensive but cleaner and having higher energy content
than the original mined coal. Other methods of cleaning up coal have also been
proposed.
Of the processes described above, standard coal gasification, the production
of methanol, coal liquefaction as practiced in South Africa and coal purification
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are reasonably well known and might give some contributions at a substantial
cost before 1980. The other possibilities should be considered as medium range
solutions.
While the fuel obtained in this manner may be rather expensive it could
eventually be made available in great quantities.
In Situ Coal Gasification:
It has been suspected for a long-time that coal.gasification can be carried
out underground much less expensively. The main process, burning the coal in
oxygen under pressure and in the presence of water,does not necessa"rily require
the prior removal of the coal from the ground. Experiments of this kind have
been carried out, particularly in Russia. They were usually performed in coal
mines and they were unsuccessful, partly because the mines were shallow and a
sufficient pressure could not be maintained, and partly because the fire burned
out of control.
A new and hopeful process would consist in the exploitation of deep and
thick coal seams. The 'depth may be between 500 feet and 3,000 feet, the total
thickness at least 50 feet. Deposits of this kind are found in Wyoming, Montana
and other areas.
A considerable number of one or two-ton conventional high explosives would
be detonated within the coal seam. The process is to reduce the coal-bearing
layer to rubble with approximately 25% void space. Oxygen would be pumped down,
the coal would be set on fire and an appropriate amount of water poured over it.
The rate at which oxygen is made available will control the burning. The head
of water provides the pressure. If the burning is started at the top of the
formation and the gas formed is drawn off from the button, a uniform flame
front and rather complete burning is expected.
Pilot operations should start simultaneously iri several places since success
depends on various factors: the depth and composition of the deposit and the
nature of the material occurring together with the coal which may affect both
the burning process itself and the distribution of the products, the latter
being influenced by the catalytic action of materials occurring in the coal bed.
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 No Objection to Declassification in Full 2012/10/15: LOC-HAK-299-1-14-4
Considerable work is being-performed on thinner coal beds where the
burning proceeds in a horizontal direction and a sizable fraction of the coal
is left behind. This method gives low BTU gas at a cost probably less than 50:
per million BTU. The most important fact is that the relevant thin coal seems
to have a wide distribution throughout the world.
It is estimated that the in situ process may cost as little as 504 for
a million BTU. The amounts available would be very large, the objections
against strip-mining would not apply and a really satisfactory solution of the
gas problem may be at hand,
Unfortunately, the process is untried, the performance of various formations
may be quite different and a development time'of several years must be anti-
cipated. Sizeable production can not be expected even. in the best case before
the early 1980s. On the other hand, a proof of the functioning of this method
could have a decisive effect on the world market.
The relatively inexpensive and abundant gas which would be obtained could
be also converted into methanol or polymerized into a substance resembling
gasoline: Therefore, it situ coal gasification, if proven, could have a truly
world-wide impact and may solve a major portion of the energy problem.
Stimulation of Tight Gas Formations.
Prior to the availability of the products, from in situ coal gasification,
some additional gas may be found, particularly on the Continental Shelf.
Furthermore, we.have sufficient known additional-gas reserves in tight formations
which will not produce gas by conventional methods. It is probable that gas
can be produced from these by extensive hydrofracturing. The estimated cost is
between 504 and 804 per million BTU.
Experiments have Leen carried out on gas stimulation by nuclear explosives.
This method is practically proven and could go into.full production by 1978.
Contributions can be expected at earlier times. Thi,; method could provide us
with an adequate gas supply for approximately 1.0,yea?s at a price similar to
the one given for hydrofracturing.
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 No Objection to Declassification in Full 2012/10/15: LOC-HAK-299-1-14-4
In comparing the two methods one should note that hydrofractuuring on
the scale proposed has not been tried while nuclear experimentation is
available. On the other hand if nuclear gas stimulation is to proceed,
political opposition will have to be overcome and some technical problems must
be worked out, In order to overcome the political opposition it is necessary
to maintain a perfect safety record and to minimize radioactive side effects.
We are very far along on the road to demonstrate that both these problems
can be solved. However, the political opposition is vigorous and an educational
campaign, as well as excellent performance, will be necessary to overcome it.
In view of the importance of the question and the unavailable. uncertainties
of the cost predictions both methods should be explored.
The Role of Oil Shale.
According to present knowledge the United States possesses the richest
oil shale deposits. This oil shale contains approximately 15% hydrocarbons
in a solid forth. Our single biggest deposit is in the Piceance Basin in the
northwest corner of Colorado, containing approximately twice as much hydro-
carbon as all of _the Middle East.
There are three methods by which this oil shale could be exploited. I
want to designate these as the conventional method, the improved method and
the nuclear method.
In the conventional method the shale is strip-mined, or mined from shallow
deposits. The shale is then retorted. Air is introduced into the retort from
above; the flame is progressing downward. As the flame approaches a layer
the volatile hydrocarbons escape and are sucked out from the bottom of the
retort. They are then condensed at normal pressure and processed in a manner
which will effectively eliminate the sulfur contained in the fuel. The estimated
cost of the procedure ;s $6.per barrel. The advantage of the procedure is
that it is tried and reliable.
The conventional iiethod has also some disadvantages. One is the relatively
high cost. Another is that only the shale close to the surface-can be economically
exploited. This rcducirs the available amounts, The third and perhaps most
serioLs objection is teat the 85% residue which is left over after the retorting
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 No Objection to Declassification in Full 2012/10/15: LOC-HAK-299-1-14-4
V
constitutes a major environmental nuisance. If shale is to be used as an
important resource in solving the energy problem, WE. will be left each
day with thousands of tons of shale on our hands. Areas covered by shale are
extremely difficult to rehabilitate.
The improved method is a form of in'titu processing. First shale is
removed underground from a room of perhaps 30' x 30' x 15'. This shale is
conventionally retorted. Then long holes are drilled into the roof of the
room, high explosives are placed in the holes and the roof is caused to
collapse. A rubble chimney is thus formed with approximately 25% empty spaces.
Then this chimney is treated like an underground retort. The volatile
hydrocarbon being sucked off from the bottom of the zone, pumped to the surface
and treated. The same process on a bigger scale is also considered.
The advantages of this method are: reduced cost, $4 to $5 per barrel of
de-sulfurized oil (which is fully competitive at present prices);'-greater
amounts of available shale, and a reduction of the shale brought to the surface
by a factor 4.
The Occidental Oil, Company is exploring this procedure. One of the potential
difficulties may be raised by the presence of ground water.
The nuclear method is similar to the one described above, but carries the
process one step farther. A nuclear explosive of perhaps 100 kilotons is
exploded under the oil shale at a depth of approximately 2,000 feet. The
explosion-blows a hole of 200 feet in diameter. This hole takes the place of
the room excavated in the previous method.. The'roof collapses without any
further application of high explosives, and a hugh rubble chimney is formed
of an approximate height of 800 feet. One may then proceed with the retorting
as in the previous method.
This procedure has thus considerable advantage,,.. It can exploit a very
great fraction of the shale .that is underground including deposits not rrm;neable.
The estimated cost is somewhere between $2.50 and $I. per barrel. And finally,
no shale is brought to the surface and, therefore, r:o major environmental. nuisance
is encountered.
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 . ~I3
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V
The difficulties are also great. All the development still lies ahead
of us. We have to be extremely careful about complete containment of each
nuclear explosion, and the ground water problem may become more serious because
of the greater extension of the rubble chimney. Finally, political and
emotional objections will be predictably powerful.
The exploitation of oil shale may well become the best method of solving
the major portions of the energy crisis in the relatively near future. One can
easily understand the dimensions of the promise of oil shale by stating that
the eventual value of the oil shale in the Piceance Basin will in all probability
exceed a trillion dollars.
Massive exploitation of this oil shale will not occur before the 1980s. The
establishment of a relatively low production price of oil from this resource may
-have a-.profound effect on the world market.and this.effec-t,may-occur, as-research
succedds, by the later 1970s.
Other Fossil Fuel Su lies.
It is important to'realize that a great variety of coals and hydrocarbons
exists underground and may be exploited with appropriate techniques. Two
particularly extensive deposits occur in Canada. One is a field of coal and
shale-like substance in New Bruns:^.ick. The other is a well-known tar sand deposit
near the Athabasca River in Alberta, Canada. The recovery method must be suited
to the nature of the deposit and in each case a new technology may have to be
.developed.
In New Brunswick one may attempt to use a recovery method similar to under-
.ground coal gasification and involving water. On the other hand, one might
consider an approach similar to the one considered for the oil shale in the
Piceance Basin in Colorido which is retorting in the absence of water. We
probably are at the very beginning of the research that might lead to practical
use.
The circumstance teat these rich deposits are in Canada rather than in the
United States would indicate that we might.consider research leading to their
exploitation with a lower priority. On the other hard, the energy shortage
is a world-wide phenomenon, and cooperative research would probably
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be in the interest of Canada, the United States, and other energy-poor
countries.
The Problem of'ElectricjjL-
Today 25% of our fossil fuel consumption is used to produce electricity.
There is every reason to find alternative methods (i.e. not using fossil fuels)
_tQ produce electric energy, To the extent that this can be done in an economical
fashion, it would be useful to increase the use of electricity and correspondingly
to reduce the burning of fossil fuels. Of course, new types of electrical
generation cannot be introduced in a very short time and the increased applications
of electricity will also have to occur in a gradual manner.
One must realize that a good solution of the problem how to generate
electricity in a manner that is safe, clean and inexpensive (particularly with
regard to the fossil fuels) is the smaller part of the energy problem. It
remains, however, an important portion.
More Efficient Production of Electric_i_ty_.
To the extent that fossil fuels will continue to be used in generating
electricity it is important to use these fuels in the most efficient manner.
This will mean savings in fossil fuels. It also brings about considerable
reduction in the so-called thermal, pollution.
There are in principle two ways in which the efficiency of the generation
of electricity can be improved. One is that in'converting the heat energy
produced by the fossil fuel into electricity one should start-at a.higher
temperature. The other is to reject the spent thermal energy at a lower
temperature. The first may be accomplished by a "topping cycle", the second
by a "bottoming cycle". The latter is important %,& en the exhaust has a temperature
of 600?F or r,,ore .
Topping cycles c2.n use gas turbines, provided naterials resisting high
temperatures can be u