The Valley of Opportunity: A History of West-Central Colorado
BLM Cultural Resource Series (Colorado: No. 12)
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Chapter XI:

"While it lasted the boom looked like the 1849 California Gold Rush. Then the government changed its rules and our paper millions evaporated over night."

—Uranium Prospector, 1958—

Mining, with fortunes made and lost almost overnight, was once the glamour industry of west-central Colorado that had by 1920, lost much of its shine. The Panic of 1893 decimated the state's silver industry, which never regained its status as the basis of Colorado's wealth. Silver towns, like Aspen, languished as did coal mining camps that depended on the smelters for markets. Some precious metals camps, however, were not as terribly affected. The Gilman-Eagle area, for example, prospered from its mines because of the high lead and zinc content of local silver ores. Zinc mining continued into the mid-1970s. Other semi-precious minerals found in the area were also extracted. Vanadium and uranium mining experienced an up and down existence from 1920 into the 1970s. During the 1950s a Uranium boom, reminiscent of the gold and silver rushes of the nineteenth century, occurred. Furthermore, oil shale, a mineral previously undeveloped, became significant, both regionally and nationally during the early twentieth century.

Throughout the years from 1920, west-central Colorado's mines have shared many experiences with other area industries. Foremost, the increasing presence of the Federal government has shaped regional mining activities. From the Mineral Leasing Act of 1920 to the Atomic Energy Commission (AEC) of the 1950s, national policy, made outside the region, directed and controlled mineral exploitation. Furthermore, economic troubles during the 1920s and 1930s affected mining in west-central Colorado, as did national recovery programs. World War II and post-war national priorities continued to fashion regional mineral extraction activities. Despite growing Federal involvement in area mining, much of the industry's history remained the story of the individual or small group enterprises.

Single efforts started in the years immediately after World War I when miners attempted to revitalize the region's sagging precious metal industry. A general feeling that great strikes were yet to be made, served to drive prospectors on. [1] In camps such as Aspen, a few individuals continued to work the mines after World War I, hoping to discover a new bonanza. These efforts continued in the Roaring Fork Valley throughout the 1920s and 1930s and into the 1940s with no success at all. [2] In 1927, Holy Cross City, the once famous camp near Tennessee Pass, experienced a last flurry of mining activity. This small boom went on only six months and by the summer of 1928, the town was abandoned once again. [3]

The depression decade brought new efforts to revive precious metal mining in west-central Colorado. Along the Colorado River near Mack, Colorado, a few people tried their luck at placer mining, with limited results. [4] Other attempts at revitalization came from Congress. Edward Taylor of Glenwood Springs convinced the legislature to declare a moratorium on annual assessment work for claimholders. This allowed miners to maintain their claims without having to do at least $100 worth of annual work to keep them valid. [5] Taylor, and the entire Colorado Congressional delegation, tried during 1934 and 1935, to persuade President Franklin Roosevelt to re-instate bi-metallism as the nation's monetary standard. This program, by making silver into legal tender for paper money at a fixed ratio value to gold, was the same type of cure sought by the Populists and "Free-Silverites" in the election of 1896. Taylor and others felt such a change would not only help the nation recover from the Great Depression but would also lead to reopening of silver mines in Aspen and elsewhere. Roosevelt did not feel that such a program would help the country and he refused to go along with Taylor and the Coloradans. [6] This was the last serious attempt to re-establish the silver industry in the west-central part of the state and because of its failure, regional precious metal extraction never again enjoyed the position it once had in the area's economy.

The only silver mines able to maintain profitable operations throughout the twentieth century were those that had ores high in base metal content, located in the Eagle Valley. From 1917 to the end of World War II, the Empire Zinc Company operated mines at Gilman. These mines became one of America's largest sources of zinc. [7] During the decade 1931 to 1941, the mines not only produced considerable quantities of that metal, but also some 65 percent of the state's silver and 85 percent of Colorado's copper ore. [8] In 1940, alone, Eagle County mineral extraction was valued at $4,278,866. [9] Demand for zinc and copper during the second World War led to expansion of mining activities at Gilman. This increased work made that locale Colorado's number one zinc producer. [10] Mining continued into the 1960s and in 1966, the town of Gilman, which housed the company's miners, had a population of nearly 9,000. [11] However, during the 1970s, as the deposits became exhausted, the operations closed down.

Other minerals were commercially exploited in the years after 1920. Limestone quarries, primarily in Garfield County, were used to produce cement for local markets. The gypsum deposits along the Eagle River were not so fortunate. By 1949, these rocks remained unexploited, as did many of the clays in the area. [12] However, other minerals were commercially mined and/or refined in west-central Colorado.

One of these minerals was Gilsonite, found in Utah, but processed in Colorado. As the "good roads movement" gained momentum in the 1920s, demand for this paving material grew. Barber Asphalt continued to operate its mines near Dragon, and Watson, Utah. A refinery for the hydrocarbon was constructed near Fruita, Colorado. After the 1939 abandonment of the Uintah Railway, which had provided transportation, Gilsonite was hauled from the pits to the plant by truck or slurry pipeline. The processing plant remained in operation for many years after World War II and added to the locale's economic base. [13] From 1920 on, other hydro-carbons also brought business into the region.

Coal was one attraction. Coal mining in much of west-central Colorado had ended during World War I when Colorado Fuel and Iron Company closed their operations in Pitkin and Garfield Counties due to lack of markets. This closure affected nearly all mines. [14] However, the smaller mines, many independently owned, continued to produce. During 1922 and 1923, labor strikes in the state's major coal fields led to increased prices and generated work at these lesser collieries, especially those around Grand Junction. By the middle of 1923, the labor disputes were settled and eastern slope miners went back to work. Without the artificially created markets, west-central Colorado's coal mines lost business and became part of a nationwide coal depression. [15] Other reasons for this downturn in activity included decreased industrial need for coal and an oversupply of the fuel in areas closer to the industrial centers of the East and Mid-west. This meant that any west-central Colorado coal mines that remained open did so to supply local markets. One such mine was the Hunter near Grand Junction. It was in production as late as 1934, at which point it became the Grand Valley's oldest mine in continuous operation. [16]

After World War II, with a growing trend toward natural gas and oil to fuel America's homes and factories, coal became even less popular. However, during the 1970s the Coal Basin Mine, originally opened by John C. Osgood in 1900, again was producing. This revival may be short lived due to environmental requirements for air quality which restrict users of coal and require expensive equipment to clean exhaust gasses. [17]

Another energy source, oil, caused great excitement in west-central Colorado during the 1920s. Throughout the region, speculators tried to convince investors in the future of oil drilling in that part of the state. The boomers' promises were given some credence because of an oil boom occurring at Rangely, Colorado, during the same time. Also a general, nationwide excitement caused by new discoveries in Texas and Oklahoma, led many area residents to believe that black gold was available to anyone who would look for it. [18]

The boom started in 1921, when prospectors found signs of oil at Garmesa. Thirteen wells were drilled but most proved to be dry holes. The "boomlet" passed and Garmesa returned to its former role as agricultural and pastural land. [19]

Four years after the Garmesa episode, a group of "Oklahoma" oilmen appeared at Rifle, Colorado, proposing to drill wells along Mamm Creek. The town was excited by the possibility of an oil bonanza and during the visitors' stay, many townspeople envisioned themselves prospective millionaires from the black gold. However, one day the four oilmen disappeared. It turned out they were a gang of bank robbers "casing" Rifle's financial institutions. This group, the Fleagle Gang, were later captured and brought to justice in Lamar, Colorado. [20] So ended oil excitement in west-central Colorado, but not energy development.

Natural gas proved a more reliable source of wealth for the region, especially in the years after World War II. The 1920s and 1930s witnessed limited development of the area's natural gas supplies. The few wells that did exist were mostly capped because there was only a small market for the product. Furthermore, the few wells in operation were inefficient, with considerable waste at the pump head. [21] It was not until the 1950s, with increased home heating needs, that gas wells became valuable. The conversion of many factories from coal to natural gas provided another outlet for the fuel. Public Service Company of Colorado became one of the region's leading producers of natural gas during the 1950s, pumping it out of the Book Cliffs. [22]

By the 1960s, national demand for the fuel continued to expand, and interest was paid to regional gas fields. Meanwhile, scientists were searching for new, peaceful uses for atomic power. The marriage of the atom and gas was referred to as Operation Plowshare and as part of Operation Plowshare the Rulison Project was conceived. The architects of this policy turned their attention to quantities of natural gas trapped in rock formations thousands of feet below the surface. [23] They reasoned that by placing a nuclear charge in those stones and detonating it, the trapped gas would be freed. As an experimental site the scientists chose a location on the mountainside above Morrisania Mesa, near Rulison, Colorado. After long preparations, a 40 kiloton bomb was exploded on September 10, 1969, some 8,431 feet below ground. The blast did free natural gas, however, it also radiated the gas making it unsafe for use. Because of this problem, the well was capped and now only a small building over the wellhead marks the spot. [24] Three years later plans were announced for another nuclear experiment north of Rifle, but it was dropped. Colorado voters became so opposed to such uses of nuclear energy that during the 1970s, an amendment was added to the state constitution prohibiting future blasts. [25]

Nuclear materials were also mined in west-central Colorado. Extraction of vanadium began in the area during the 1890s, in the Sinbad Valley and at Gateway. However, the deposits were of limited value compared to elsewhere in southwestern Colorado and little development work was done. [26] A few years later in 1909, vanadium was discovered north of Rifle, Colorado. Between that year and 1922, the find was publicized but nothing was done. [27] Part of this was due to a lack of local processing facilities. In 1903, radium plants had been established in Denver, but most of America's raw production was sent to Europe for refining. [28]

This situation changed in 1922, when H. K. Thurber organized the Vanadium Corporation of Colorado to operate the Rifle Mine and he built a processing plant at that town. Two years A. H. Bunker founded the United States Vanadium Company and bought out Thurber's operation. [29] In 1926, with the mill in production, Union Carbide and Carbon Company purchased the Rifle facilities and operated U.S. Vanadium as a subsidiary corporation. This business continued until 1932, when the mine was shut down. [30] In 1929, the Garfield Mine, also near Rifle, was located by the Garfield Vanadium Corporation. That company built a small mill near the mine, but by the mid-1930s they, too, had ceased operations. U.S. Vanadium then leased the Garfield claims. [31]

The depression of the thirties was partially responsible for a decline in mining activity. Vanadium's primary use was as a strengthening alloy for steel, and as America's output dropped during the Great Depression, so did the market for vanadium. Another factor was new dependence on foreign supplies of that metal and radium. The Shinkolobwe Mine in the Belgian Congo became the world's largest source during the 1930s. [32] Again, Congressman Edward Taylor, in an effort to aid his district, campaigned in Washington to get Federal help for Colorado's radioactive mineral processors. [33]

His pleadings did little to influence national policy, yet relief for west-central Colorado's vanadium millers occurred anyway. The outbreak of World War II in 1939, led to American re-armament and subsequent weapons sales to the allies. Steel was a critical raw material in the process of gearing up for war. To toughen that metal, vanadium was needed. Starting in 1939, the Rifle Mine was re-opened after being idle for six years. [34] After the United States joined the war, in 1941, output at the mine and recently rebuilt mill increased. During the war, the Federal government built housing for workers on the north edge of Rifle and this community became known as "Vanville." [35] Operations at these facilities (mine and mill) continued until 1948, when production again was suspended. [36] By the late 1950s, demand for the metal made it profitable for Union Carbide to reopen the mines and build a new (the present) processing plant west of Rifle, Colorado. Construction started in 1958, and by 1960, the plant was turning out refined vanadium and small amounts of yellow cake (uranium). [37]

That latter substance became a much sought after mineral in the post-World War II world. Wartime technological developments placed new emphasis on the potential of nuclear power. In August of 1939, Albert Einstein, world renown physicist, warned President Franklin D. Roosevelt about the possibility that Germany might develop an atomic bomb. This led to frantic American efforts to do the same. These experiments were known as the Manhattan Project. In August, 1945, the awesome power of the atom was demonstrated when "A-bombs" destroyed two Japanese cities. From that point on, interest in uranium, the raw fuel for nuclear weapons, was assured. [38]

The United States jealously guarded its atomic secrets in the years immediately following the Second World War, especially from Communist countries such as Russia. At that same time, a non-military conflict between America and the Soviets began; it was called the Cold War. Neither side let the other have advantages and an arms race ensued. In 1949, Russia successfully exploded her first atomic bomb and the race grew more intense. [39] The contest to build nuclear weapons led directly to increased Uranium mining activity in west-central Colorado.

The area had witnessed two previous "U-bombs" but that of the 1950s was, by far, the largest. As mentioned, during the 1890s the Sinbad Valley had been the center of excitement over radioactive materials. Later, in 1913, Gateway experienced a similar phenomenon. Some claims made in that rush were worked on and off over the years, much the same as the vanadium operation at Rifle. [40]

In 1947, the recently formed Atomic Energy Commission (AEC) opened an office in Grand Junction to act as supervisory agent over nuclear material mining throughout the Colorado River Basin. For the next few years little happened. This was due in part to a Congressional investigation of the AEC, led by Senator Bourke B. Hickenlooper of Iowa. His panel found the agency to be mismanaged and suggested steps be taken to protect and encourage American Uranium development. [41]

Once this report was issued, while the Cold War intensified, AEC planners decided to take steps to foster domestic radio-active fuel production. In 1951, a program was started. It guaranteed prices for ore, gave bonuses to discoverers and offered development loans. All this was done because the Atomic Energy Commission was the sole legal customer of Uranium in 1950. [42] Because the AEC's Operations Office of the Division of Raw Materials, the formal name for the Grand Junction Compound, was near America's Uranium deposits, that city became the nerve center of a rush reminiscent of the gold rushes a century before. [43]

The lure of instant wealth attracted thousands of people to the Colorado Plateau in the early 1950s. Often they were normally sensible individuals who were caught up in Uranium fever. [44] The prospectors needed any help they could get from the AEC because of the high costs of exploration and mining. Otherwise, it would have been impossible for the "little guy" to have participated in the boom. [45] Another problem prospective "U-kings" faced was the physical characteristics of uranium ore. While it was detectable with a Geiger counter, its deposits were in small pockets or pods like placer gold. Discoveries might give first appearances of being valuable but after further exploration, prove to be too small to be mined profitably. [46] Also, like gold or silver strikes, uranium claims often were litigated between rival interests. [47] Most participants found disappointment and returned to their everyday lives. [48]

Despite these problems, the adventurous set out and a few struck it rich. Among them was Vernon Pick, a tenderfoot with a Geiger counter, who discovered paying deposits. His Delta Mine proved rich and its success piqued the public's interest. He established offices and built a home at Grand Junction where he received many would-be "Uranium magnates" and gave advice. Pick's word about various areas and prospects carried weight and he became recognized as a leader of the rush. [49]

Prospectors spread throughout western Colorado and Utah, as well as into New Mexico and Arizona. Their hunts touched many tracts of public domain. Caught up in a get rich quick psychology, and unconcerned with the environment, these uranium hunters left many scars on the land in the form of prospect holes and dump piles, very similar to goldseekers before them. [50] In some cases the lure of wealth became too much, even for AEC employees, who used confidential knowledge to stake private claims. [51] To further the boom, Warner Brothers produced a documentary film, entitled Uranium Fever, on the rush in 1954. [52]

The rapid expansion of nuclear activity did effect west-central Colorado and especially Grand Junction. As headquarters of western Atomic Energy Commission operations, the town also experienced a boom. In 1950, there had been only 4 known Uranium ore bodies in the United States, but by 1954, there were 25 and some 1,000 producing mines. The output of these excavations all funneled through Grand Junction. [53] In 1950, the city's mining related industries were almost non-existent except for the AEC, but 4 years later, city business directories listed 15 uranium companies, 40 mining companies, and 19 mine supply services. [54] Even the AEC compound grew dramatically. In 1947, 11 people worked there but by 1954, over 1,400 were in the agency's employ. During 1955, total production topped 1,500,000 tons of ore. [55]

The boom continued unabated for two more years. In 1957, AEC officials decided that present production levels were adequate and ceased discovery subsidies. The next year, 1958, disaster befell the industry when on November 28th, the AEC announced that no more uranium oxide (ore) would be purchased from deposits not already developed. This stopped the rush dead in its tracks, much like the silver boom had in 1893. Paper millionaires were wiped out overnight. In the final analysis, only a few individuals had the success of Vernon Pick. Others returned to their old jobs, poorer but wiser for the experience. [56]

The Atomic Energy Commission was the only uranium market into the 1960s, and as such, controlled production. As late as 1960, processing of radioactive materials continued to be the largest mining activity in Grand Junction. [57] However, by 1965, the AEC's grip over the ore was relaxed and private buyers, mostly large energy (oil) companies, helped revitalize the industry. In 1967, the AEC reinstituted its development incentives program and for the rest of the decade a new boom occurred. This time it was large corporations using teams of engineers and geologists that found uranium, not the lone prospector with his Geiger counter. [58] Not only did the U-boom of the 1950s boost west-central Colorado's economy, but it also left problems for the future, such as tailings dumps. Nevertheless, the Uranium rush did lead to new interest in other mining pursuits. [59]

One activity of this nature was oil shale extraction which had an up and down career ever since the late nineteenth century. Oil shale was an industry filled with problems and misconceptions over the years. First among these was that the rock contains oil. Actually, the stone holds partially bituminized matter that, under heat, will yield an oil-like substance, Kerogen. In other words, when shale oil is retorted (separated from the rock) man is finishing a job nature started—the formation of crude petroleum. [60] In Colorado, most shale, or organic marlstone, is of various shades of brown with a velvety luster. [61] It occurs in beds that range in size from a fraction of an inch to 80 feet thick. [62] The Mahogany Zone is foremost of west-central Colorado's shale deposits, and is estimated to contain 70 to 90 billion barrels of oil. [63] This outcropping is part of the Green River Formation which runs from the Roan Cliffs near Rifle, Colorado, north and west into Wyoming and Utah. Included is the Piceance Basin. Broken by the Colorado River, these deposits are also found on Battlement and Grand Mesas. [64]

To be profitable, efficient methods of retorting the shale had to be found. While the material was easy to mine, thousands of tons had to be processed each day to make shale oil competitive with oil from wells. The lack of an efficient method of refining has been the greatest single problem faced by west-central Colorado's shale oil operations. [65] Technology developed in Britain during the nineteenth century was found lacking in Colorado, as early experiments proved. [66]

oil rig
The oil shale boom during the 1920s saw construction of retorts like this one belonging to the Oil Shale Mining Company on Dry Creek near DeBeque, Colorado. Photo by U.S. Geological Survey.

American Oil Shale Refining Company had its retort on Parachute Creek, north of Grand Valley, Colorado. Photo by U.S. Geological Survey.

The United Kingdom first started development of a shale oil industry in the late seventeenth century. In 1694, three Englishmen distilled oil from rocks. [67] Their success went unnoticed for many years because oil was not in great demand at the time. Over the next 150 years, England experienced the Industrial Revolution and by 1850, this period of rapid technological change was completed. After new factories developed, the country's petroleum needs increased both for manufacturing and domestic uses, such as lighting. In 1850, James Young invented a process to retort oil from shales found deep underground in Scotland. [68] While expensive, Young's methods did supply a necessary product and other Europeans copied the Scottish system during that decade. [69]

U.S. citizens learned from Young's experiments and the 1850s witnessed the first American shale oil boom. Along the eastern seaboard, deposits were found and used to meet the nation's growing petroleum needs. In the West, early Mormon settlers distilled oil from rocks they found in eastern Utah. [70] In 1859, the shale boom ended when oil was discovered at Titusville, Pennsylvania. These fields more than met market demands at a lower cost than retorting shale, so the boom ended. [71] A pattern was starting to form in which interest in oil shale was directly linked to crude oil supplies. When natural oil deposits diminished, oil shale received attention, but when supplies were plentiful retorted oil (shale) was ignored.

Oil shale was well known in west-central Colorado when the first Euro-Americans arrived to settle during the 1880s. The Utes told these newcomers about the "rock that burns" found around Rifle and Parachute Creeks. [72] The Ute stories fascinated many of the newcomers who believed that they had found coal or some other combustible material. Mike Callahan, for whom Mount Callahan was named, settled along Parachute Creek in the early eighties and built himself a house. Intrigued by the attractive blue-gray rocks around his ranch, he decided the use them to build his fireplace. After Callahan's abode was completed, he invited his neighbors to a house-warming party. During the festivities a fire was built in the fireplace, and as the evening progressed, it began to smoke and then burn. Before the conflagration could be stopped, the entire building went up in flames. Mike Callahan had "discovered" oil shale. [73] His find went unnoticed or improperly identified. Other enterprising souls in the vicinity started to mine the "lignite coal" (oil shale) and sell it as fuel. [74]

By 1890, the rocks were correctly labeled by geologists and area residents began to wonder if some system to extract the oil could not be found. To encourage development they founded the Parachute Mining District in 1890, under placer mining laws of the time. The Parachute District was the largest mining district ever established in Colorado, covering over 15 square miles. The organization maintained itself until 1935. [75] During the nineties, further work was done on shale oil development. T. E. Bailey built an experimental retort near the head of the West Fork of Parachute Creek. He used the Scottish retort process. Bailey's operations continued into the twentieth century. [76]

The 1910s witnessed increased oil shale activity in west-central Colorado. Beginning in 1913, the United States Geological Survey (USGS) started intensive work cataloging the quality and extent of the deposits and determining their economic potential. [77] The USGS's first reports were published in 1914 and 1915. These led to further work by the government. In the latter year, Dean E. Winchester, a professional geologist, was chosen to head the investigations. [78] The reports issued under Winchester's direction stimulated public interest in the resource and also led to creation of the Naval Oil Shale Reserve. This tract of 27,000 acres was set aside on December 16, 1916, by decree of President Woodrow Wilson. It was done because of a continuing fear that national defense would be in jeopardy if the Navy ever ran out of fuel oil. [79] The fact that World War I was raging in Europe and supply lines from the United States depended on ocean transportation, further convinced the government of the wisdom of shale oil development.

As early as 1908, President Theodore Roosevelt warned the nation of an impending oil shortage. As the Industrial Revolution in America was nearing a climax by 1900, and new demands for petroleum grew, it was generally feared that domestic crude oil supplies would soon be exhausted. [80] Because of these predictions, and the intense USGS surveys, many private individuals also became interested in shale oil during the 1910s.

In 1910, dozens of prospectors started to examine the Parachute Creek region in search of oil shale. The next year a claim was recorded with the Parachute Mining District's secretary and it appeared as if a "boom" was underway. [81] Government surveys intensified this interest and after 1915, a full-scale rush was in progress. [82] The events were well received by all Coloradans, who saw an opportunity to develop their state even further.

Colorado's Governor, Oliver H. Shoup, became a great supporter of shale oil. This official stance was echoed by State Geologist R. D. George who not only promoted the idea but also experimented with retorting processes. State sponsored distillation research was carried out at both the Colorado School of Mines in Golden and the University of Colorado at Boulder. [83] To help defray these costs, Federal monies were given to the state for those experiments. [84]

All the government publicity on oil shale, coupled with the retort experiments, gave credence to a belief in the future of the mineral. 1915 marked the take-off point for the shale oil boom in west-central Colorado. In the Parachute Mining District alone, almost 50,000 claims covering 12,000 acres were filed by 1928. [85] Towns such as DeBeque or Parachute were becoming household words as shale oil corporations were formed and began campaigns to attract investors. Between 1918 and 1923, over 100 such companies were founded. [86] The public was anxious to speculate and "oil" was a magic word in those days. The automobile was growing in popularity and it needed gasoline, as did other inventions. Promoters played on these factors as well as using typical tools of the trade by making outlandish promises of wealth, while capitalizing on people's desires to get rich quickly. Oil shale also offered a degree of certainty not enjoyed by oil well drillers. There were no dry holes. Indeed, by 1920, the country went wild over oil in any form. [87]

By that year, even the major oil companies looked seriously at shale oil. Union Oil Company of California began, in the early 1920s, to buy shale lands for development. Eventually Union acquired over 18,000 acres of west-central Colorado. Standard Oil of New Jersey (now Exxon) also entered the rush and purchased 24,000 acres. In 1941, Standard sold its property for five dollars an acre or less. Union held on to its land but by the 1960s, they were not producing shale oil. [88] The lack of feasible and inexpensive retorting technology led to discouraging results.

coal miners
Even during the oil shale boom, coal mining remained a major economic force in west central Colorado. These miners, at the South Canyon Mine, Garfield County, Colorado, are glad to pose for the camera in 1916. Photo by Garfield County Public Library.

Distillation of shales in west-central Colorado was based on Scottish retorting techniques. In 1917, the first commercial retort was installed by the Oil Shale Mining Company at the head of Dry Creek, 22 miles west of DeBeque. It was built using European designs but proved unworkable due to caking problems, where the shale stuck to the inside of the heating vessel, and limited capacity. While local shales were rich, running as high as 60 gallons of oil to the ton, compared to an acceptable 25 gallons, the early retorts were incapable of processing more than five or ten tons a day. To make operations profitable, 100 tons a day was considered optimum. Experiments continued into the 1920s, [89] however, other problems arose to plague the infant industry.

Foremost were the fraudulent claims promoters. Many of the stockjobbers sought to line their pockets at public expense. Often these companies did not have clear title to any shale land yet they accepted investor's money on the pretense of phoney land holdings or supposed future purchases. After passage of the Federal Mineral Leasing Act of 1920, the promoters assured the public that "special deals" had been worked out with the Department of the Interior to get shale tracts. By 1922 and 1923, investors became skeptical, especially after published warnings by the government concerning stock frauds and bogus titles. Enthusiasm for oil operations dropped further when the Teapot Dome scandal became public. This affair involved the unlawful use of Naval Oil Reserves in the Teapot Dome region of Wyoming. All these events had slowed shale oil development greatly by 1924.

Accidents at the mines also cooled interest in shale oil during the twenties. On July 31, 1921, the Schuyler-Doyle Mine tramway collapsed, killing seven and injuring three others. The operation closed down. Other area workers demanded safer working conditions. [91]

The final blow to the first oil shale boom came with discovery of new oil fields in Texas and California. The apparent shortage that stimulated activity in west-central Colorado evaporated in the face a market glut. [92]

Nevertheless, the government continued to be interested in oil shale as a future source of petroleum. It was felt that unless America developed its own oil, the nation would be left at the mercy of foreign producers. [93] In 1924, stern warnings issued by Interior Department officials, read; "The past history of the petroleum industry in this country reveals an astounding disregard for the conservation and efficient utilization of a valuable and irreplaceable resource." [94] Because of such attitudes, Washington continued to fund research in mining and distillation methods. From 1925 until 1928, the Bureau of Mines ran experimental retorts on the Naval Oil Shale Reserve. [95]

Private individuals also worked on shale oil problems during the twenties in an effort to make the industry commercially viable. Among those were Harry L. Brown, founder of the Index Shale Oil Company. He had started operations 14 miles north of DeBeque in 1918. A few years later, Brown discovered the medicinal value of his product and started to market patent medicines along the Western Slope through the offices of the C.D. Smith Drug Company of Grand Junction. Eventually Brown went out of business. [96] Others also found limited commercial uses for shale oil including road oil, sheep dip and soap. [97] These markets were not large enough to make oil shale profitable and by the end of the decade, most of the companies ceased operations.

The first boom did leave marks on west-central Colorado. Oil companies bought up many area ranches for the mineral rights. [98] In one ranchers view, it was the shale oil excitement and abuse of the range that crippled Parachute Creek's stock raising. [99] Despite this, the boom did cause many new roads to be built, which, because of the terrain would not have been built otherwise. [100]

The Federal government played an important role in encouraging the first oil shale boom and in the eyes of many, its involvement caused the end of the rush, due to the Mineral Leasing Act of 1920. This law allowed the Secretary of the Interior to lease designated tracts of Federal minerals, such as coal or oil shale, for development rather than having private individuals claim the land under the Mining Act of 1872, like gold claims were handled. Congress hoped to control and conserve oil shale much the same way Forest Reserves protected timber resources. However, confusion caused by the 1920 law led to many problems. [101] Passage of the act started court battles that continue to the present.

During the 1920s and 1930s, holders of claims staked under the 1872 act fought Interior's attempts to invalidate their filings. When they sought to gain patents to their land, officials of the Department found various reasons, such as lack of required assessment work, why title should not be granted. Problems about applicability of provisions of the 1872 law, written for hard rock mining, cropped up and as the conflict intensified, new actors joined the fray. Congressman Edward Taylor publicly stated that the Mineral Leasing Act did not properly cover shale lands and the 1872 law should be valid. Because of these uncertainties over patents, west-central Colorado claimholders took their cases into the courts. In 1930, the United States Supreme Court upheld patentee rights under certain conditions and ordered the Interior Department to issue title. [102] While this was a victory for some, other legal battles over oil shale continued until June 1980, when the High Court again ruled in favor of the claimholders. [103]

The 1930s marked further declines in oil shale progress. The public was weary of the talk and lack of results by the time of the Great Depression. [104]

With the outbreak of World War II in 1939, and subsequent active American participation after Pearl Harbor in December 1941, the Federal government, and others, took a new look at oil shale's potential. Fears of inadequate or interrupted supplies led to new experiments with the resource in west-central Colorado. [105] Starting in 1942, Union Oil Company reactivated their facilities and continued to look for efficient methods of reduction. Their plant remained in operation until 1958. [106] The Federal Bureau of Mines also built a new plant at Anvil Points, near Rifle, Colorado. The facility was part of a national program to develop synthetic fuels under the Synthetic Fuels Act of 1944. This operation worked on all phases of shale oil production, from mining to refining. [107] Anvil Points remained as a demonstrations plant into the 1970s.

Bureau of Mines officials hoped to attract private companies to cooperate in joint experiments at Anvil Points after World War II. However, America's major oil producers were hesitant to work with that Federal agency because of patent problems. Due to the fact that tax monies were used, any new inventions or processes, became part of the public domain and thus, could not be protected by patents. If no such security was assured, the opportunity for profit by sale of the technology was minimized. By 1954 and 1955, the major oil companies requested that Anvil Points be closed down. [108] In that latter year, Senator Estes Kefauver, famous for his investigations of organized crime, accused the petroleum industry of attempting to dictate Federal action. [109] Despite this, the Bureau of Mines closed the Rifle facility in 1956. [110]

In the early 1950s a new company joined the search for practical, profitable oil shale retorts. The Oil Shale Corporation, known as TOSCO, hoped to develop methods of distillation and then sell the technology to larger petroleum companies. TOSCO investigated shale oil factories in Europe, as well as what had been developed in the United States. Until 1960, it seemed as if the company's research was limited to the laboratory. However, some promising new ideas caught the attention of Standard Oil Company of Ohio (SOHIO) and in 1964, TOSCO and Standard Oil jointly formed Colony Development Corporation to carry out actual field experiments along Parachute Creek. [111]

During the 1950s, while TOSCO was at work on various retorting methods, nationwide attention was again focused on west-central Colorado's oil shale fields. Readers' Digest and other national publications ran articles about the region's shale resources. [112] At the same time, a comprehensive plan for the Grand Valley was prepared by graduate students of Cornell a comprehensive plan for the Grand Valley was prepared by graduate students of Cornell University. It called for a city of nearly half a million people on Battlement Mesa and an extensive system of new highways to and from the mines and plants. Cornell's effort listed a lack of adequate water supplies to support the city and refineries as the primary problem facing future shale oil development. [113] This was just one of many plans put forward after World War II to utilize the billions, if not trillions, of barrels of fuel locked in the mountains.

The 1960s witnessed more efforts at finding workable distillation techniques and ways to fully develop the resource. From 1962 until 1964, the U.S. Bureau of Mines offered Anvil Points as a plant site to anyone who would take part in a joint experiment. In 1964, Mobil Oil accepted, and for two years Anvil Points was again active. [114] Colony Development, then owned by Atlantic-Richfield Oil (ARCO), Standard Oil of Ohio (SOHIO), TOSCO, and Cleveland Cliff Company, also continued its work into the late sixties. However, discoveries of petroleum of Alaska's North Slope dampened enthusiasm for Colorado shale oil. [115]

The next decade, with the ever increasing American dependence on foreign oil, led to still another flurry of activity in oil shale country. The Federal government was encouraging development by making the land easier to lease. In 1964, the Bureau of Land Management's Multiple Use Act was passed and in 1976, the Federal Land Policy and Management Act (FLPMA) was signed into law. Both pieces of legislation attempted to make it easier for companies to plan for long range use of Federal lands. [116] Despite encouragements, such as leases being granted in 1974, in order to establish production of up to five million barrels of oil a day, there was, in 1980, no commercial shale oil marketed from west-central Colorado.

The seventies, and a new emphasis on domestic oil supplies, was also the decade when problems were encountered by prospective producers. The environmental protection movement, that gained momentum during the previous ten years, blossomed during the 1970s. New concerns for the environment led to tighter restrictions on all mining activity. Oil shale felt the power of those protecting the land, as the environmentalists fought in courts to prevent development of that energy supply in west-central Colorado. [117] Other problems still remain. The disposal of spent (processed) shale, as well as a lack of sufficient water, are questions yet to be resolved. [118]

Exxon's Battlement Mesa development just south of Parachute represents the latest development in the oil shale industry of the Grand Valley. In May 1982, Exxon announced its pull-out of oil shale, creating unsettled futures for the occupants of these houses. Photo by F.J. Athearn.

Because of these dilemmas, area residents remained unconvinced that oil shale will be a primary business activity in west-central Colorado's future. Each spring they brace for the "annual oil shale boom." [119] As if to refute this skepticism, Exxon announced plans during the summer of 1980, for a 5 million barrel-a-day shale oil facility near Parachute, Colorado. In May, 1982 Exxon announced that it was shelving all plans for the Colony Project and subsidiary operations like the proposed La Sal Pipeline to Casper, Wyoming. Citing cost estimates double those of 1980 and a glutted world oil market, Exxon concluded that commercial production of shale oils was not only too expensive, but not necessary at this time. The western slope was shocked by the cancellation of the five billion dollar proposal, and Parachute, which was a booming shale town, was suddenly left without means of support. Despite resident's cynicism, mining, and particularly energy development in the form of uranium or oil shale, has been an important contributor to the region's economy, especially in the years since the end of World War II. In 1960, mining was the second largest employer in Mesa County. Farming continued to lead the area's economy, but in the post-war years, tourism experienced new growth and revitalization so that by 1960, it ranked third. [120] The period since 1945 was a time of both continuation and change for west-central Colorado.

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Last Updated: 31-Oct-2008