any requests to buy governmentowned uranium "must be accompanied by evidence that the applicant has made a reasonable effort to buy natural uranium and that it is not available on the required schedule or at a price not exceeding that being used as a basis for the AEC charge." The revised policy statement differs from the original in AEC's nowstated preference for the sale of natural, instead of enriched, uranium. In the new statement AEC also sets at least an outside target date of July 1, 1973, for when it will lift present restrictions on the enrichment of foreign uranium intended for domestic use.
SHALE OIL:
Another Colony Partner
AEC's Sapirie (left) and Kerr-McGee's Fryar First U.S. toll enrichment contract
URANIUM ENRICHMENT:
Kerr-McGee Signs Up In two notable developments in the nuclear fuel supply area: Kerr-McGee Corp. and the Atomic Energy Commission have inked the first domestic uranium toll enrichment contract for the production of fuels for a nuclear power plant; and AEC has issued a revised statement of its uranium supply policies. The toll enrichment contract provides for AEC to enrich uranium hexafluoride feed material supplied by verr-McGee. The company will use the enriched uranium to fabricate fuels for Omaha Public Power District's Fort Calhoun (Neb.) nuclear power unit 1. The pressurized water reactor being built by Combustion Engineering is scheduled to go on stream in 1971 with an output of some 450,000 k w ( e ) . Toll enrichment is provided for in the landmark 1964 legislation authorizing private ownership of special nuclear material, including enriched uranium, which was a major step toward the Government's objective to turn over more responsibility for nuclear industry development to the private sector. The 1964 act provides for toll enrichment beginning Jan. 1, 1969; an end to the present practice of AEC's leasing special nuclear materials for power reactor fuels after Dec. 31, 1970; and mandatory ownership of special nuclear materials used for power reactor fuels by July 1, 1973. AEC's first toll enrichment contract for power reactor fuel was signed June 22, 1967, with a Swedish company, pro-
viding enrichment services for up to 30 years. Under the Kerr-McGee contract, deliveries of the enriched material will be made during the period June 1, 1969, through Dec. 1, 1973, and will involve an estimated 114 tons of enriched uranium. Enrichment of the feed material will range from about 1.6 to 3.05% in uranium-235. Based on charges established in September 1967, the cost for the enrichment service is estimated at $9.4 million. Toll enrichment service will be performed at AEC's gaseous diffusion plants in Oak Ridge, Tenn., Portsmouth, Ohio, and Paducah, Ky. KerrMcGee officials tell C&EN that the enriched U F 6 will be converted to U 0 2 pellets at the company's Cimarron, Okla., facility. Published in the Sept. 7 Federal Register, the new AEC policy statement relating to uranium supply through June 30, 1973, is a revision of the proposed statement issued for public comment last Nov. 9. In the revision, the commission reaffirms its preference for toll enrichment in AEC facilities of privately procured uranium over the sale of either enriched or natural uranium from government stocks at this time. Under certain circumstances, however, it is willing to sell government-owned uranium on a single transaction basis. The price will be based on $8.00 per pound of U 3 0 8 in concentrates. In other situations, AEC says that, generally, it will give preference to the sale of natural uranium for toll enrichment rather than direct sale of enriched uranium. But it stipulates that
Open secrets, closed mouths, and a wide divergence of opinions continue to cloud prospects for early development of oil shale deposits. Rumors are getting stronger and stronger that Atlantic Richfield is about to become the fourth partner in Colony Development, the most ambitious effort to date to find the key that will unlock the riches underneath large portions of Colorado, Utah, and Wyoming. The latest report has it that agreement was reached with Atlantic Richfield weeks ago but that announcement may be months away. Neither Atlantic nor Standard Oil (Ohio), the chief partner in Colony, will confirm or deny the agreement. Sohio says that it is talking seriously with "a major oil company," but says that it has not accepted anyone yet. Colony Development was formed in 1964 by Sohio, Oil Shale Corp. (TOSCO), and Cleveland Cliffs Iron Co. The combine built a semiworks plant at Parachute Creek in Colorado's Piceance Basin. Early failures in TOSCO's retorting process resulted in disagreement on how to proceed. In 1966, Sohio ceased active participation in the project. The other two partners continued off and on to operate the mine and pilot plant. The entry of a new partner could heal the rift that has developed between Sohio and TOSCO. As TOSCO president Hein I. Koolsbergen put it last June, a fourth partner would "provide a fresh view and a management concept that is not tied to the past." The differences between the two companies is not limited to process details but extends to their views on the prospects for early development of oil shale. "We are ready to go," Mr. Koolsbergen said in June. The TOSCO process is ready for commercial development, he insisted, and the only thing holding it up is the lack of agreement on how to proceed. Sohio SEPT. 16, 1968 C&EN 17
Colony Development's shale oil prototype plant Awaiting Interior, healing a rift
vice president Richard C. Sauer is not so bullish. In a letter to Interior Secretary Stewart Udall this month, he cautioned against optimistic technical and economic projections. A plant cannot be built today to yield a 12% or higher rate of return on the required investment, he concluded. Given a start this year, Mr. Koolsbergen estimates, a plant could be operating at partial capacity in 1970 and at its full capacity of 55,000 barrels of shale oil daily in 36 months. Cost of the plant: $140 million. TOSCO says that the company's process could produce oil for about $1.60 a barrel before by-product credits or $1.25 a barrel after by-product credits. Criticized for the lack of "urgency" in its oil shale report, the Interior Department also appears to be spurring research on oil shale development. The department has just selected three federal tracts for leasing to companies who want to conduct experiments. SILVER:
Enough for Everyone There is sufficient silver to meet the world's industrial need, 200 experts on the metal heard at a seminar on silver sponsored by the American Metal Market in New York's Roosevelt Hotel last week. Enough silver, that is, when secondary sources such as U.S. Treasury sales, the melting down of U.S. and foreign coins, and the liquidation of speculator holdings are counted as potential supplies. Silver from these secondary sources will be needed to bridge the gap between 18 C&EN SEPT. 16, 1968
world production and consumption of silver in coming years. The present silver market "is totally dominated by speculators/' Francis H. Wemple, vice president and treasurer of Handy & Harman, explains. The current price of silver is $2.25 a troy ounce. "On the basis of an analysis of supplies and industrial demand, the price probably ought not to have gone above $1.80," Mr. Wemple adds. Ralph L. Wilcox, manager of silver sales, American Smelting and Refining Co., presents his forecasts of the size of this gap for the next five years. World production of silver will reach about 270 million ounces in 1968, according to Mr. Wilcox. Production, spurred by high silver prices, should grow by 4% a year to 335 million troy ounces by 1974. Consumption, on the other hand, will reach 360 million troy ounces in 1968. At a forecast annual growth rate of 2.5%, world silver consumption in 1974 should be 417 million troy ounces. Mr. Wemple reasons that even if the gap reached 200 million ounces a year for the next five years it could still be filled. The required 1 billion ounces between 1969 and 1973 could be obtained from sale by the U.S. Government of 300 million ounces, demonetization of coin amounting to 300 million ounces, salvage and miscellaneous supplies of 150 million ounces, sales from the Indian government of 100 million ounces, and the liquidation of speculative holdings of 150 million ounces. Echoing the belief that there is really no silver shortage, Walter Frankland, Jr., executive director of the Sil-
ver Users Association (SUA), points out that vast amounts of silver are overhanging the market: • The U.S. Treasury has 300 million ounces and is selling 2 million a week. • There are 300 million plus ounces in speculative holdings. • Outstanding U.S. coins contain 1.7 billion ounces of silver. • Millions of ounces of demonetized coins of other countries can be obtained. • Other foreign hoards, including 5.5 billion ounces in India, could come into the market. Last year the U.S. consumed about 145 million ounces of silver, according to Mr. Frankland. The end uses (in millions of ounces) were photography, 45; electrical and electronics, 35; silverware and jewelry, 25; brazing alloys, 17; batteries, 10; dental uses, 4; mirrors, 3; missiles, 1; and miscellaneous, 5. Mr. Frankland asked that the Treasury remove the ban against private melting of old silver coins. Robert A. Wallace, Assistant Secretary of Treasury, says that in his opinion there is slim chance that the Treasury will permit private melting of old coins. There is the problem of who makes the profit on melting coins, the Government or speculators. "Hoarders have been a problem and the Treasury isn't particularly anxious to help them," he explains. Mr. Wallace also says that the U.S. accounts for most of the world gap in silver. He estimates that of the 1.7 billion ounces of silver in U.S. coins in circulation, 500 million to 1 billion ounces can be recovered. The remainder would remain in private hands. Ralph Wilcox Measuring the gap
Treasury's Wallace
