Land Utilization Issues for Development of Piceance Basin Oil Shale

by David Rubenson, Richard Y. Pei

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This Note examines the effects of federal leasing policies on the costs and lead times required to extract Piceance Basin oil shale from surface mines. It shows that man-made boundaries, and the associated industry fragmentation, will increase the cost and lead times required to extract oil shale with surface mining. Due to the large level of effort required to perform a definitive cost analysis, the authors have chosen to utilize a parameter known as the stripping ratio to measure surface mining costs. This parameter is defined in Sec. II. This section also contains a description of a model for calculating this parameter. The model is exercised in Sec. III to determine if the large projects and mine-expansion options discouraged by man-made boundaries have significant effects on the cost of surface mining. The final section reviews these results and suggests land utilization strategies that may mitigate the adverse effects of lease boundaries.

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