The Waterbury Democrat., 1943-11-27

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 Bear Lake; and (2) the conclusion of new agreements between the U.
 s. and Canadian governments,
 covering postwar disposal of the
 oil and the War Departments in-
 vestment nj developing the field, pipelines. refinery and access roads, nearly all of which are on Cana dian territory and blanket or com- pete with Alaskan resources.
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 Should the normal Wells field turn out to be one of the biggest pols on the North American conti- | nent, as has ben predicted by some 1 oil interests, 1t will relieve the War Department from one of its most embarrassing scandals.
 In three days of public hearings before the Senate Truman Commit tee Investigating the war effort, fol- lowing several months of secret in- vestigations, the whole fantastic story of the Canol project has been disclosed in sorry detail.
 PATTERSON PROTESTS
 Under Secretary of War Robert Patterson beligerently fdefends the Army's handling of the project as necessary to national defense and as considered essential by the joint chiefs of staff, who have ordered the work completed regardless of cost. From 8 neconomic point of view, however, Canol-deriving its name from telescoping of Cana dian Ou-haS now been shown to be almost indefensible.
 Up to November 1, over $89 mil lion had already been spent, but the end is not yet in sight. Before it is completed, enXt year, it is esti- mated that the total costs will be $134 million - for waterways, pros pecting, moving a refinery from Texas to Whitehorse, a four-inch pipeline from Norman Wells, and for storage and distribution lines. For this investment, the Army will eventually get, out of a devel- oped crude production of 5000 bar rels 8 day at this time, a high octane gasoline production of only 479 barrels a day, which is noth- ing. The pipeline won't be con- pleted till next February, the re- f1nery till spring. If everything goes well. there may be usable products by July 1. Until then, and even afterward, the bulk of the petro- leum products used in Alaska will have to be supplied by tanker. The whole enterprise is a tre- mendous gamble with public funds. That being the case, what are the chances of getting any of the money back?
 BAD BARGAIN? The oil rights are owned by 1m- perial Oil of Canada, which is 5l per cent owned by Standard Oil of New Jersey. The Armys contract with Imperial provides for the sale of the first million and half bar rels of crude at $1.25 barrel at the well. After that, the Army will pay only 50 cents & barrel to cover cost of producing the oil, putting the re- maining 75 cents in another pocket to ertire the War Departments in- vestment of SIT million in drilling and developing the producing field.
 This would take about 13 years, at present rates of production, but if production were brought up to merely the present potential of the field, 10000 barrels a day, by the building of another, bigger pipe line to Whitehorse, the time would be reduced to two years. Refined products, 1t Is estimated, can be produced at Whitehorse at about $6 a barrel, as against $550 a barrel cost for delivery by tanker from the States. So, it's still 8 bad bargain.
 The Army's contract now runs until only six months after the end of the war. For the other millions going into pipelines, refinery, and so on, the Canadian government now has first option to buy at the then appraised value. If Canada does not eexrcise the option, the properties may be sold privately at not less than value. So there is a long chance that most of the money may be recovered. And if the Nor man Wells field turns out to be an- other East Texas, then the invest ment will be as good as the War Departments other "boner'' in building the Alcan Highway itself.