The daily monitor leader. [volume] (Mount Clemens, Mich.) 1942-19??, 1943-11-30
. BEHIND THE SCENES
IN WASHINGTON .

II Will relieve the War Depart
ment from one of its most en-
barrasslng scandals.
In three days of public hear
ingS before the Senate Truman
Committee investigating the war
effort, following several months
of secret investigations, the
whole fantastic story of the Can
oil project has been disclosed in
sorry detail.
PATTERSON PROTESTS
Under Secretary of War Rob
ert Patterson belligerently de-
tends the Army'S handling Of the
project as necessary to national
defense and as considered essen
tial by the Joint chiefs Of staff,
who have ordered the work COM
pleted, regardless of cost. From
an economic point of view, how
ever, Canol-doriving its name
from a telcScoping of Canadian
Oil-haS now been shown to be
almost iHdefenSible.
Up to Nov. /, over $50 million
had already been spent, but the
end is not yet in sight Before
it is completed. next year, il is
estimated that the total costs
Will be 1874 million-for water
ways, prospecting, moving a re
finery from Texas TO White
horse, four-inch pipeline from
Norman Wells, and for storage
and distribution lines.
For this investment, the Army
will eventually get. out Of de-
veloped crude production of g.
600 barrels a day al this time a
high-octane gasoline production
Of only 40 barrels a day, which
is nothing The pipeline won't
be completed till next February,
the refinery till spring If every
thing goes well, there may be
disable products by July / Until
then, and even afterWard. the
bulk Of the petroleum products
used in Alaska Will have TO be
supplied by tanker.
The whole enterprise is a ire
mcndous 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
Imperial OIL Of Canada, which
Is 81 per cent owned by Stand
ard Oil of New Jersey. The
Army's contract with Imperial
provides for the sale OF the first
million and a half barrels Of
crude al SIPS a barrel al the
well After that, the Army VIII
pay only so cents a barrel 20
cover cost OF producing the oil,
putting the remaining IS cents
IN another pocket TO retire the
War Departments investment of
SIT million in drilling and de-
veloping the producing field.
This would take about IL
years, at present rates OF pro-
ductIon. but if production we're
brought up 70 merely the present
potential Of the field, 10000
barrels day, by the building Of
another, bigger pipeline to
WhjtehorSe, the time would be
reduced 20 two years. Refined
products, Il IS estimated, can be
produced at WhitehorSe at
about SIS a barrel, as against
$3.50 a barrel cost for delivery
by tanker from the States. So,
it's still a bad bargain.
The Armys contract now runs
until only six months after the
end Of the war. For the other
millions going into pipelines, re-
fInery, and SO on, the Canadian
government now has first option
10 buy at the then appraised
value. If Canada does not ex-
ercise 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
Norman Wells field turns out 20
be another East Texas, then the
investment will be as good as the
lNar Dnrn ~ GU. nthnA ..An.,o,.,