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pressurized hydroretorting technologies has resulted in oil yields of up to 54 gallons per ton.

However, beneficiated shale, which is very finely ground, must be briquetted in order to be processed in a moving-bed technology. Pressurized hydroretorting of beneficiated shale in a fluidized-bed with an inert solids material will allow direct processing of the beneficiated shale. The inert material (sand) in the bed will aid heat transfer promote uniform mixing, and hold the beneficiated shale in the fluidized bed for sufficient residence time.

Eastern oil shales such as Tennessee Chattanooga shale contain significant quantities of strategically important metals such as vanadium, molybdenum, nickel, chromium, and manganese. Recovery of these metals from spent oil shale could reduce our Nation's dependence upon imports of these metals while providing important environmental benefits. Techniques for recovering strategic metals from hydroretorted shale should be investigated.

HYCRUDE Corporation recommends $1.5 million in FY'87 for continuing the research program on expanding the data base for moving-bed hydroretorting of Eastern oil shales, for investigating fluidized-bed hydroretorting of both raw and beneficiated Eastern oil shales, and for investigating the recovery of strategic metals froin spent shale.

Beneficiation Research:

In the beneficiation process, oil shale is finely ground and a high proportion of the inert mineral matter is separated from the organic rich portion of the shale. Beneficiation produces a greatly enriched feedstock, which can be retorted by conventional means, or by hydroretorting for even more dramatically increased oil yields. Because the feedstock is enriched, the capital cost for the retorting process is reduced.

Beneficiation can increase the number of Eastern oil shales which can be considered for retorting. In addition to the richer shales of Alabama, Indiana, Kentucky, Michigan, Ohio and Tennessee, leaner deposits in West Virginia, Illinois, Pennsylvania and New York can be enriched to the point where retorting is viable.

Fundamental research is now being conducted on beneficiation of Eastern oil shale and on moving-bed hydroretorting of beneficiated shales. A three-year research effort was initiated as a part of the eastern oil shale program mandated by Congress in FY'85. The beneficiation characteristics of various Eastern oil shales will be investigated, and the hydroretorting oil yield will be determined.

Additional research activities which should be conducted in the area of eastern oil shale beneficiation include:

* Determination of the separation characteristics of

ern oil shales as a function of particle size, and the efficiency of various floatation agents.

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Identification of strategic metals present in the effluent
streams from the beneficiation process and determination of
the technical and economic feasibility of metals recovery
techniques.

Assessment of the effects of water recycling on the
beneficiation process.

* Investigation of concepts for sulfur removal from the

beneficiated oil shale.

* The biological removal of nitrogen and sulfur compounds is

currently being investigated for coal. The microbial
removal of sulfur and nitrogen from oil shale would result
in a higher quality oil product and a cleaner product gas
stream. Microbial denitrification and desulfurization from
the product shale oil should also be investigated.

HYCRUDE Corporation recommends $1.5 million in FY'87 for continuing oil shale beneficiation research.

Novel Concepts Research:

As a result of the eastern oil shale research program established by Congress, awards will be made to investigate novel concepts which have the potencial to improve the economics or environmental impact of eastern shale retorting. The continuing support of novel concepts research will ensure the development of state-of-the-art retorting technology. Some promising novel concepts are discussed briefly below.

* By supplying the activation energy for the formation of oil

from shale through radiation (at ambient temperature and
pressure), it is possible to achieve a dramatic increase in
oil yields with donor solvents. This concept has the
potential to be integrated with beneficiation because the
beneficiated product is in a slurry which can be processed
directly by radiation donor solvent treatment.

Microbial in-situ recovery of shale oil may provide a low
cost method for oil recovery because the capital costs
required for mining, reclamation and retorting would be
eliminated.

Replacement of the lockhopper systems from high pressure
operations on solids, such as spent shale extraction from
the retort, would provide substantial savings. Research on
continuous techniques for the removal of solids, such as
dissipating the pressure through a properly designed
discharge pipe system, should be conducted.

Catalytic retorting of oil shale can provide a technique
for increasing oil yields. Doping of raw shale with
catalysts has previously been shown to enhance resource

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recovery. This concept needs to be investigated utilizing
beneficiated oil shale where the potential for greater
yield enhancements exists.

The use of spent oil shale use for the production of cement
will provide a method for utilizing the spent shale,
thereby reducing spent shale disposal concerns.
Preliminary testing has indicated that a viable product can
be developed.

HYCRUDE Corporation recommends $2.0 million in FY'87 for continuing novel concepts research.

Support Research:

There are a variety of fundamental support research activities which should be undertaken to provide researchers with thermodynamic, chemical and physical properties data for Eastern oil shale. These data are necessary to improve the understanding of oil shale retorting and will aid in the assessment of results obtained in the other eastern oil shale research program areas. Several examples of support research activities are discussed below.

* Reaction kinetics modeling is essential to an understanding

of eastern oil shale retorting and, in specific, oil loss
mechanisms. Knowledge of the mechanisms of oil production
will lead to new techniques for increased oil recovery from
the shale. kinetics modeling can allow research to address
areas such as product quality and product mix, oil
production versus gas production.

Research concerning the primary reaction products of
eastern shale retorting is necessary for an understanding
of the oil shale resource and effects of variations with
the shale deposits on retorting products. Process research
does not indicate what the primary reactions (which result
in a release of oil products from the shale) are because it
measures product stream components after secondary gas
phase reactions. Knowledge of these primary reaction
products will vastly improve the results of kinetics
modeling efforts.

Research on physical, chemical and thermodynamic shale
properties should be conducted. Research to define
mechanical properties such as particle integrity, crushing
characteristics and thermal properties such as specific
heat and heats of reaction is necessary for efficient
process design.

HYCRUDE Corporation recommends $1.6 million in FY'87 for continuing Eastern oil shale support research activities.

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Environmental Studies:

In addition to the environmental process research, it is necessary to conduct environmental studies. These studies should address topics such as the seasonal availability of water.

Baseline data on existing point sources of sulfur and nitrogen oxides should also be gathered.

The results of these studies will provide direction for retorting process optimization (i.e. water consumption and/or product gas desulfurization and denitrification).

HYCRUDE Corporation recommends $1.6 million in FY'87 for continuing environmental studies.

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Senator Evans. Thank you very much.
Mr. Webb.

pt In exami note thathirds of thority fo

STATEMENT OF DAVID O. WEBB, SENIOR VICE PRESIDENT, POLICY AND REGULATORY AFFAIRS, GAS RESEARCH INSTITUTE

Mr. WEBB. Thank you, Senator Evans. I am David Webb, vice president of the Gas Research Institute. I appreciate the opportunity to appear before you today to present GRI's views and the fiscal year 1987 budget recommendations for gas-related research in the Department of Energy's fossil conservation and renewable programs.

GRI supports the need to reduce expenditures as Congress intended when it passed the Gramm-Rudman-Hollings bill. Therefore, the GRI recommendation is for a $121 million core program for gas-related research in the DOE budget. This recommendation is approximately 11 percent lower than the fiscal year 1986 congressional appropriations of $135 million for these same projects.

Central to GRI's recommendation is that the gas industry through GRI is planning to commit $161 million of gas industry funds to associated near-term research in these same areas, which more than matches the DOE budget recommendation.

Even though GRI is not a Government contractor and does not accept Federal funds, GRI cofunds many of its research programs with DOE. Therefore, the actions of Congress on the DOE budget do have a direct impact on the gas industry's and GRI's research programs.

In examining the fiscal year 1987 budget request, I think it is important to note that the proposed $12.1 billion DOE budget assigns $8.2 billion or two-thirds of the funds for defense activities. At the same time, new budget authority for the combined research in fossil, conservation, and renewable energy R&D is reduced by 74 percent from $717.5 million in fiscal year 1986 to only $186 million in fiscal year 1987.

To further illustrate this dramatic policy shift, the proposed DOE fiscal year 1987 budget request for the strategic defense initiative program is $604 million-three times the new budget authority for the combined fossil, conservation, and renewable solar programs.

This does not represent sound national energy policy. If Federal energy R&D funding continues this downward spiral, in a few years the Nation will once again find itself faced with rapidly rising levels of oil imports. Terminating ongoing energy R&D programs invites severe problems in meeting future energy demands.

The urgency and necessity of maintaining a viable Federal energy R&D program becomes self-evident when we examine where the United States is projected to get the major portion of its energy supplies during the next 25 years. In 1984 the United States received 90 percent of its energy from fossil fuels. GRI's projections indicates that in the year 2010, the United States will still meet more than 75 percent of its energy needs from fossil fuels. Yet, the DOE budget has proposed to assign less than 2 percent of its new budget authority in 1987 for research in fossil, conservation, and renewable energy.

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