The Wilmington morning star., 1943-11-27
Edison Reports
BY PETER EDISON

| BY stroke of the widest kind of pros
pector's luck, one of the War Departments
worst scandals-the $134 million Canol oil de-
velopment project in Northwest Territory, Can
ada-may be- converted into a postwar bo-
events, which would make heroes out of pub
lie figures who might otherwise be court.
martialed, may be known soon. following dis
closures on % the real extent Of the Norman
Wells oil fields, just under the Arctic Circle,
east of the Alaska Canada boundary in the
vicinity of Great Bear Lake; and 90 the
conclusion of new agreements between the
U. S. and Canadian governments, covering
postwar disposal of the oil and the War De-
partment's investment developing the field
pipelines, refinery and access roads, nearly
all of which are on Canadian territory and
blanket compete with Alaskan resources.
Should the Norman Wells field turn out to
be one of the biggest pools on the North
American continent, as has been predicted
by some oil interests, 1t will relieve the War
Department from one of its most embarrass-
| ing scandals.
| In three days of public hearings before the
Senate Truman Committee Investigating the
war effort, following several months of secret
investigations, the whole fantastic story of
the Canol project has been disclosed in sorry
detail.
Under Secretary of War Robert Patterson
belligerently defends the Arny's handling OF
the project necessary to national defense
and as considered essential by the joint chiefs
of staff, who have ordered the work COM
pleted, regardless of cost. From an economic
point of view, however, Canol-deriving its
name from a telescoping of Canadian OIL
has now been shown to oe almost indefensi-
BILE.
Up to Nov. 1, over $50 million had already
been spent, but the end is no. yet in sight.
Before it is completed, next year, it is esti-
mated that the total costs will be $134 mil
lion-for waterways, prospecting, moving a
refinery from Texas to Whitehorse, four
inch pipeline from Norman Wells, and for
storage and distribution lines.
For this investment, the Army will even
tually get, out of a developed crude produc-
ton of 5000 barrels a day at this time, a
high-octane gasoline productioo of only 479
barrels day, which is nothing. The pipeline
won't be completed till next February, the
refinery till spring. If everything goes well,
there may be disable products by July l. 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 tremendous gam
BILE with public funds. That being the case,
what are the chances of getting any of the
money back?
The oil rights are owned by Imperial Oil
of Canada, which is 81 per cent owned by
Standard Oil of New jersey. The Arny's con-
tract with Imperial provides for the sale of
the first million and half barrels of crude
at $1.25 barrel at the we'll After that the
Army will pay only SO cents barrel to
cover cost of producing the oil, putting the
remaining rs cents in another pocket to re-
tire the War Departments investment of SIT
million in drilling and developing the produc-
ing field.
This would take about 10 years, at present
rates of production, out if production were
brought up to merely the present potential
of the field, 10000 barrels d day, by the
building of another, bigger pipeline to White
horse, the time would be reduced to two
years. Refined products, it is estimated, can
be produced at WhitehorSe at about Sc a
barrel, as against $3.50 a barrel cost for de-
livery by tanker from the States. So, it's
still 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, re-
finery, and SO on, the Canadian government
now has first option to buy at the then ap-
praised value. If Canada does not exercise
the option, the properties may be sold pri-
vately at not less than value. So there is
a long chance that NEST of the money may
be recovered And if the Norman Wells field
turns out to be another East Texas, then the
Norman Wells field tulns out to be another
East Texas then the investment will be as
good as the War Departments other 'boner'
in building the Alcan Highway itself.
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