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Senator Moss. You say this is tied in largely with the need for land use planning in the States and by the Federal Government, is that true?
Mr. LOESCH. Yes. I think it is. And I agree, Mr. Chairman, there is quite a dichotomy between the current actions of the Department and the energy problem which confronts the country as a whole.
Of course, I should point out to you that the issuance of a preferential right lease really has little or no bearing on meeting the energy problem because our experience also that the percentage of production off of preferential leases is quite small. Producing preference right leases make up approximately 5 percent of the total number of outstanding coal leases.
In other words, the problem of holding for speculation applies with even greater force to the preferential leases than it does to the competitive leases.
Senator Moss. Well, this committee is now considering and is very near the mark-up stage on a surface mining bill that will apply particularly to coal. Is this going to delay further the leasing of coal by the Department ?
Mr. LOESCH. I suppose it depends, Mr. Chairman, on what standards the bill provides. It seems to me that it would be possible that the bill would cause further delay. If the State required standards were such as to discourage the proposed operator.
Senator Moss. Of course, the impact, I guess, would be on the operator because he is the fellow that has to file the plan and post the bond and things of that sort.
Mr. LOESCH. Right.
Senator Moss. But if he can't get any coal leases to begin with, he can't draw up his plan.
Mr. Loesch. That is very true. That is so. I don't see how that would have any—as I consider it, this is a new idea to me but as I consider it, I don't see how that bill would affect the situation.
Senator Moss. Thank you.
I must not monopolize all of the time. My colleagues have some question. I am sure.
Senator ANDERSON. I want to commend the Secretary for very good testimony. You have been given a great many questions and you have handled them very well.
You mentioned the question of coal. Isn't there a vast difference in the way coal is mined?
Mr. LOESCH. Yes, there certainly is, if I got the question. There is a vast difference in how coal is mined. Of course, there is a great clamor these days about strip mining which is by far, and particularly in the West where the coal seams are thick and broad, by far the most efficient way of mining coal.
But also the most dangerous if not properly managed to the environment. The underground coal mining methods in use today, of course, are very different from those our fathers knew, requires huge expenditures by the operator for modern machinery,
Senator ANDERSON. Well, a great many mines are now operating where the original person mining in the area was several generations before.
Mr. LOESCH. Yes, sir. In my State and I believe in yours, Senator, there are a number of small family-owned coal mines which meet a simple, local, more or less residential demand.
Senator ANDERSON. Also Dawson has a coal mining area that has been leased for a large number of years and it is still going. I think this question of royalties pertains to that situation.
Mr. LOESCH. Of course, the policy has always been on the oldest of Federal coal leases, where production is going, those leases are always. and always have been automatically renewed.
Senator ANDERSON. Well, I think the leasing program has many differences.
Thank you very much.
Mr. Secretary, I do want to compliment you on a very fine and detailed answer to questions concerning the committee. I think you have given us a good statement for the most part. Just one
or two clarifications. Your answer to question 2, what are the principal goals and objectives of the Government with respect to management of each resource and you listed those 1, 2, 3: No. 1, to assure orderly and timely resource development: No. 2, to protect the environment; and No. 3, to insure the public a fair market value of return on disposition of its resources.
Then you go on in great length to tell us the delays and the dificulty in obtaining environmental reports on various and sundry leasing propositions.
Wouldn't it be better to combine No. 1 and 2 and say that the Department of Interior's major goals and objectives are to insure orderly and timely resource development compatible with due protection to the environment or something? Because I think you are so tied in with this, as we all know, with the need for having EPA's reports and environment analysis about every resource development plan that is proposed, I think they are inseparable. This is my point. Wouldn't you agree?
Mr. LOESCH. Well, I think that is true, Senator Jordan.
, which is enitomized in the National Environmental Policy Act, has necessarily caused us to do a lot of solving in the Department and to develop new techniques and new requirements for selling.
I think in an effort to carry out the letter and spirit of that law, we have tended to make protection of the environment a separate objective.
But I think the national requirement of this country for large increasing amounts of energy does require that we consider the orderly and timely development of energy resources as compatible as may be with the protection of the environment, if that is what you are getting at.
Senator Jordan. Well, I think they are inseparable. I believe it is a fact of life that we do have to use these resources and develop them wisely and well, but in consonance with the protection of the environment' insofar as possible. Sometime perhaps something is going to
have to give a little bit one way or the other, but that has to be one of our main goals.
Mr. LOESCH. Well, I think so. Let's relate that to the Secretary's pipeline decision which seems to be unpopular in some quarters. It is certainly my opinion that the Department has knocked itself out finding ways in which the construction of that pipeline will be done to the least possible degradation of the environment.
It is this sort of effort that we are being required to make and should be required to make across the board in the question of all energy resources development.
I would be the last to say-I get impatient once in a while, of course, about the problems that we run into that we didn't used to have to meet, I guess, in energy development, energy resource development, but I would fully agree we didn't do a lot of things before that we should do. It is my expectation that we are doing them now.
Senator JORDAN. I think that is right. In some instances there are simply going to have to be a trade off, whether we have development or no energy
Mr. LOESCH. Right.
Senator JORDAN. That decision is going to have to be made to the best advantage of perservation of our resources in the best way that we can, consistent with the overall needs of the country.
You went through all of the sources of energy and the thing outstanding in your presentation to me was the fact that all of the fossil fuels, oil, gas, coal, Outer Continental Shelf, the drilling, onshore drilling, all are under some kind of a leasing system, is that correct?
Mr. LOESCH. Yes, sir. The only energy source or resource that isn't under some kind of leasing system is uranium.
Senator JORDAN. That is what I was leading up to. Even geothermal steam, while it is not a fossil fuel, is a mineral energy source and it has its own leasing system under the act of 1970.
Mr. Loesch. Yes, sir.
Senator JORDAN. So standing alone as an energy source is uranium coming under an altogether different procedure for its development?
Let's speculate about that a little bit. Do you have a better control of those energy sources that come under a leasing system than you do uranium which comes under the mining act of 1872 ?
Mr. Loesch. Yes, sir, I don't think there is any doubt about that.
Senator JORDAN. I notice you make some recommendations of various leasing acts in order to give you a better management control. What amendments would you recommend to the mining act of 1872, either its amendment or repeal in order to give you a better handle on it as you presently have on other sources ?
Mr. Loesch. Well, Senator Jordan, the administration's mining act, proposed mining act, S. 2727, sets up a system which, while keeping the location pattern skeleton, writes in the kind of controls that the Secretary could use to have the management handle that he needs.
Of course, what I am speaking of, there is written into that act the provisions that would allow us to require land reclamation after the mining operation is completed or even during its operation, the kind of environmental concern we have over access and so on.
If that is what you are getting at, I think the administration proposal under the mining act would provide us with the tool that we need.
Senator JORDAN. I think you have to get some better control over the energy sources, uranium especially, mined under the mining act of 1972. I am not at all sure that the recommended administration bill does all of that, but we will take a good look at it.
For the past 10 years that I have been on this committee we have talked repeatedly at every session of the Congress about the two great sources of energy that are yet undeveloped.
I am speaking now of geothermal resources and oil shale. I was pleased to see in your statement that you expect to let the first geothermal lease this year and that you are also encouraging the leasing of oil shale lands for production.
How close are we to actual oil shale leasing and the production that we would expect to follow ?
Mr. LOESCH. We can't say, of course, how close we are to commercial production of fuel from oil shale, but if our plan continues to keen on track from a time standpoint, as it now is, we would hope the first sale of oil shale leases would be late this year, December of 1972.
I think you are probably aware, Senator Jordan, of the sort of failsa fe plan that we concocted in the Department for oil shale leases.
Essentially this consists of a prototype operation which would put up for sale two sites, two tracts in each of the three principal oil shale States, Colorado, Wyoming, and Utah. We hope this will determine that is that the program will determine the practicability at this point in time of the major oil shale development. Whether we succeed or not is going to depend. I believe, in large part on the attitude of industry toward this. But based on the nominations that were made for the tracts eventually selected and other tracts, we have good reason to believe that the industry is greatly interested.
I think there are going to be several points during the development of this program at which we will have major questions to face. Environmental considerations are serious in the oil shale business because of the necessity of disposition or handling of very large waste material volumes.
It is my personal belief that in the type of country in which the oil shale is situated, this problem can be managed not to the detriment, but to the eventual benefit of the local environment.
But we will have the same objections as are raised, for instance, in the forestry field, to clear cutting. Because for a time things are likely to look kind of bad in a particular place. I think the question will arise when we hold the sale as to whether or not the bidding is adequate, the bonus bidding is within the values that the public should expect.
I personally feel quite clear in my mind that we ought not to worry about that at all in this prototype operation because it is my view that if the prototype program gets off the ground and results in substantial exploration, technologically, of production, that it will beneficiate all the rest of the Federal lands, not to speak of private lands with oil shale resources and that the eventual return to the Government by the public and the eventual development of the resources will be most well worth it, even if we didn't get any money for these tracts.
But I must tell you I think I am perhaps in a minority in feeling
Senator JORDAN. Turning now to coal, did I hear you correctly that you knew of a 500-foot coal seam some place?
Mr. LOESCH. I am advised, Senator Jordan, that in Wyoming there is an area which has 500-foot coal seams in it.
Senator JORDAN. Well, I have heard some tall stories from my friends in Wyoming, but I never heard of a 500-foot coal seam.
Mr. Loesch. This came to my attention a few months ago when we had an application for a lease of some coal which lies—the top of it lies approximately 3,000 feet underground.
The question was whether we could figure out a way to develop that coal in place. Because if it were mined the way underground mining is conducted, because of the thickness of the seam, we could only recover 15 percent of the available coal. They couldn't leave enough pillars, under the room and pillar method, they couldn't leave enough pillars and enough supporting structure to get out a significant portion of the coal. So I don't know. I never measured it, Senator, but I am advised there are such seams.
Senator JORDAN. Well, I am advised there are some marvelous coal seams in Wyoming and I saw there what I didn't know was possible. I saw a self-contained cooling system for a mammoth coal generated powerplant, where the water was recycled.
Now, I always assumed you had to have a Columbia River or a mammoth lake or something as a cooling apparatus for that kind of a plant. But here is a self-contained plant. Granted it takes some of the efficiency of that plant in order to recycle and cool the water. I suppose very much like it takes to cut down on your power to have an air-conditioning unit in your automobile that is self-contained.
Has the Department done any experimentation in self-contained cooling units for coal plants, and, if so, it seems to me it would open up great new areas of coal mining that are not close to water.
Mr. LOESCH. I am not aware, Senator. I do know technologically they are developing and in fact have developed systems which I didn't know there was one that was a completely closed system.
I am aware of recycling systems which use a small percent of the water, but retain and use over and over again a very large percentage of it. What the Department may be doing in the Bureau of Mines or somewhere else, I don't know. We can furnish that for the record, if you would like.
The Bureau of Mines is not conducting any basic research on "self-contained" cooling units for power plants. Although such technology is available, the specific choice for a cooling system depends on many technical and economic factors (the following 2 articles were submitted for the record and are retained in the Committee files: R.M. Jimeson and G. G. Adkins, “Waste Heat Disposal in Power Plants," Chemical Engineering Progress, Vol. 67, No. 7 (July 1971), p. 61-69 and K. A. Oleson and R. R. Boyle, "How to Cool Steam-Electric Power Plants," Chemical Engineering Progress, Vol. 67, No. 7 (July 1961), pp. 70-76.
Senator JORDAN. I am tremendously impressed with those great low sulfur content coal deposits in the Rocky Mountain States. It seems to me that is a source of energy that we should be turning to more and more.