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Jan 1, 1969

By A. J. Nicol

Field experience in uranium has shown it is most economical to ram through a drilling program to obtain maximum footage per drill hour. Drift surveys can then determine the course of the holes. Using this method is generally cheaper than paying the additional cost involved in using the drilling technique and equipment necessary to maintain straight holes. Factors Affecting Direction of Bit Travel: In all rotary-drilled holes there is an interplay of forces or conditions affecting the direction of bit travel. Rarely is a straight vertical hole obtained. One of the major factors is weight on a drill string. In looking at a joint of drill stem it is hard to imagine its being quite flexible, but flexing of the steel increases when many joints are made up together, and even a slight weight added to the upper portion causes a buckling or spiraling effect in the hole. The result is that the bit deviates from the vertical.

Jan 1, 1959

Jan 1, 1959

By Daniel C. Jackling

WHAT is written here features some of the things that I would say if I were to de- liver a Presidential address during the Annual Meeting to be held this month in New York. I am aware that custom favors written rather than vocal delivery of such a discourse; and, as this accords exactly with my own preference, I assure readers that they will never be called upon to hear these remarks spoken- anyhow, not by me. My year as President is drawing to a close. As I look back I like to classify and analyze the impressions that have been left with me. It has been a delightful and fascinating experience to me personally; I have appreciated the courtesies and aids, and have been deeply gratified at the honors accorded me. Perhaps the source of greatest satisfaction is the opportunity I have had to sense more about the provinces of this Institute and about the useful functions of the profession that it represents. For 38 years I have been a member. I served two terms as Director-one in 1914-'16 and again in 1927-'29. I have been honored by selection as a Saunders Medalist. I thought I was reasonably familiar with the functions, the ideals, and the activities of the Institute. But the things that I have discerned during the past year have dispelled that conceit. I still think that, a year ago, I was as well informed as most members; but since then I have had the rare privilege of executive service and insight. That has given me a perspective that I feel can be obtained in no other way-as I think the illustrious engineers who have preceded me in office will agree. I wish that I had the power to translate to every member somewhat of the feelings of pride in our organization that a year as President cannot help but instill.

Jan 1, 1939

The Committee on Nominations, begs to submit the following as its nominees for the respective offices indicated, for the year beginning February, 1920. For President and Director: HERBERT HOOVER Palo Alto, Calif. For Vice-President and Director: FREDERICK LAIST, Anaconda, Mont District 5 SEELEY W. MUDD, Los Angeles, Calif District 6 For Directors: W: M. CORSE, Mansfield, Ohio District 3 A. S. DWIGHT, New York, N. Y District 0 R. M. CATLIN, Franklin Furnace, N. J District 1 C. H. CLEVENGER, Washington, D. C District 9 W. A. CARLYLE, Ottawa, Can District 11 POPE YEATMAN, Chairman, Committee on Nominations.

Jan 12, 1919

By Graham John Mitchell

In May, 1919, a crosscut on the 1400-ft. level of the Briggs mine, a Calumet, & Arizona property at Bisbee, Ariz., penetrated a deposit of pyrite and chaleopyrite that had replaced quartzite and limestone and was cut, especially in the quartzite, by numerous fractures. As the drift advanced through these fractured portions, they were found to be free from copper-sulfate minerals although '(sooty" chalcocite was present in the fractures and also as coatings and replacements of pyritc. Howcver, sulfate soon made its appearance in certain fractures, filled them, and began to form stalactites. Several centers of incipient growth were noted for subsequent study, observations in the drift at frequent intervals during the past 17 months affording the opportunity of determining the rate of formation of the stalactites. The one to attain the greatest growth during the period of observation measured 27 in. long and averaged 1 in. in diameter. A close study showed it to be composed of small interlocked crystals of chalcanthite radiating from a small central tube-like opening. The trielinic form of the crystals was evident with prism and pinacoid faces recognixable. Assuming that the supply of copper-sulfate solution was constant (luring the 17 months—-and such an assumption is supported by the fact that the number of drops of excess solution falling, per minute, from the tip of the stalactite at the times of observation checked closely—thc stalactite, it has been estimated, grew at the rate of 1.58+ in. per month. DISCUSSION James I?. Kemp," New Yolk City.—J. S. Curtiss, in the monogr:tpll on Eureka, Ncv., say:: that a stalactite formed in limestonc grew 5/8 in. in three weeks and continued to grow as long as it had a drop of water or solution at the lower end. Another grew at the rate of 3/8 in. in the same time. In the case cited by Mr. Mitchell, the growth was about 136 in. in three weeks. A year ago we had an instance of the formation of cubes of galena on a railroad spike. A mine in northeastern Oklahoma had been idle about two years but on account of pumping of neighboring properties, the circulation of water was active throughout the drift. A cube of galena,

Jan 1, 1922

By C. E. Shoenfelt

There was a notable decrease in drilling operations in 1940 in all of the Rocky Mountain states except Montana, where the two large fields on the Canadian border, Cut Bank and Kevin-Sunburst, were espe-cially active. The expanding markets for Montana natural gas made necessary the more intensive development of such fields as Rowdoin, Cedar Creek and Devon. While there were no important oil and gas discoveries in 1940 in any of the Rocky Mountain states, a few small pools were opened, which may constitute separate areas but may prove with later development to be extensions of old fields. Some of the old fields were extended and deeper pay zones were discovered in others. These have given the areas greatly increased oil reserves and therefore are just as important as the discovery of new fields. The more important of the developments in 1940 are given, by states, in the following paragraphs. Colorado Hiawatha Field, Moffat County.—The Mountain Fuel Supply Co. began the development at Hiawatha of its oil reserves, which were discovered in about 1929, and late in the summer oil began moving from the field by truck to the shipping point at Rock Springs, Wyoming. The Hiawatha field of northwestern Moffat County was discovered in 1927 by the Sormir Petroleum Co., with the completion of No. r Florence Wilson for 4,5,000,000 cu. ft. of gas a day from a Wasatch sand lens at 2200 it. In later development of the field, oil showings were reported in several wells but no development of this resource was undertaken until 1940, when a test of the oil possibilities was started with the release in April of a location for No. 5-A Wilson on the S\W. SW. NW. of sec. 23-1zN-1ooW., on the east side of the field. The Well had an initial production of 327 bbl. of oil a day pumping from three Wasatch (Tertiary) sands between 2005 and 2540 ft. It was drilled to 2562 ft., where the 65/8-in. casing was cemented and gun-perforated at 2005 to 2125 ft., 2260 to 2335 ft. and 2513 to 2540 ft. At the end of the year, this well was averaging zoo bbl. of oil per day, pumping. Two other wells were drilled for oil on Hiawatha during the summer—one a small well of 60 bbl. per day and the other a small gas well. Powder Wash Field, Moffat County.—The development of the Powder Wash field in northwestern Colorado was resumed in 1940 by the Mountain Fuel Supply Co., with the release of a location for No. 2-A Musser in the CWL.NW.SE. of sec. 4-1rN-97W. The Powder Wash field was discovered in 1931 by the Mountain Fuel Supply Co. and the discovery well, No. I Musser, on C.NW. of sec. 5-IIN-97W., was completed at 2152 ft. in the Hiawatha member of the nonmarine Wasatch for-mation for an open flow of 34,000,000 cu. ft. of gas per day under a natural pressure of 685 lb. per sq. inch. Oil was discovered in the Powder Wash field on Nov. 26, 1936, in the company's No. I Carl Allen on the NE.SW.SE. of sec. 32-12N-97W. The oil production was

Jan 1, 1941

By C. E. Shoenfelt

There was a notable decrease in drilling operations in 1940 in all of the Rocky Mountain states except Montana, where the two large fields on the Canadian border, Cut Bank and Kevin-Sunburst, were espe-cially active. The expanding markets for Montana natural gas made necessary the more intensive development of such fields as Rowdoin, Cedar Creek and Devon. While there were no important oil and gas discoveries in 1940 in any of the Rocky Mountain states, a few small pools were opened, which may constitute separate areas but may prove with later development to be extensions of old fields. Some of the old fields were extended and deeper pay zones were discovered in others. These have given the areas greatly increased oil reserves and therefore are just as important as the discovery of new fields. The more important of the developments in 1940 are given, by states, in the following paragraphs. Colorado Hiawatha Field, Moffat County.—The Mountain Fuel Supply Co. began the development at Hiawatha of its oil reserves, which were discovered in about 1929, and late in the summer oil began moving from the field by truck to the shipping point at Rock Springs, Wyoming. The Hiawatha field of northwestern Moffat County was discovered in 1927 by the Sormir Petroleum Co., with the completion of No. r Florence Wilson for 4,5,000,000 cu. ft. of gas a day from a Wasatch sand lens at 2200 it. In later development of the field, oil showings were reported in several wells but no development of this resource was undertaken until 1940, when a test of the oil possibilities was started with the release in April of a location for No. 5-A Wilson on the S\W. SW. NW. of sec. 23-1zN-1ooW., on the east side of the field. The Well had an initial production of 327 bbl. of oil a day pumping from three Wasatch (Tertiary) sands between 2005 and 2540 ft. It was drilled to 2562 ft., where the 65/8-in. casing was cemented and gun-perforated at 2005 to 2125 ft., 2260 to 2335 ft. and 2513 to 2540 ft. At the end of the year, this well was averaging zoo bbl. of oil per day, pumping. Two other wells were drilled for oil on Hiawatha during the summer—one a small well of 60 bbl. per day and the other a small gas well. Powder Wash Field, Moffat County.—The development of the Powder Wash field in northwestern Colorado was resumed in 1940 by the Mountain Fuel Supply Co., with the release of a location for No. 2-A Musser in the CWL.NW.SE. of sec. 4-1rN-97W. The Powder Wash field was discovered in 1931 by the Mountain Fuel Supply Co. and the discovery well, No. I Musser, on C.NW. of sec. 5-IIN-97W., was completed at 2152 ft. in the Hiawatha member of the nonmarine Wasatch for-mation for an open flow of 34,000,000 cu. ft. of gas per day under a natural pressure of 685 lb. per sq. inch. Oil was discovered in the Powder Wash field on Nov. 26, 1936, in the company's No. I Carl Allen on the NE.SW.SE. of sec. 32-12N-97W. The oil production was

Jan 1, 1941

By A. J. Griest, P. D. Frost, H. A. Robinson

The flow characteristics and uniform elongation of alpha-beta titanium alloys in the solution-treated condition were shown to be markedly affected by the solution temperature. Two classes of alpha-beta alloys were distinguished, based on the effect of solution temperature on the uniform elongation. Martensitic alpha-beta alloys, which are relatively weakly beta-stabilized, showed decreasing values of uniform elongation as the solution temperature was initially increased. However, after solution-treatment at still higher temperatures in the alpha-beta field, the uniform elongation of these alloys was again high, and often attained its maximum value. Nonmartensitic alpha-beta alloys, which are more heavily beta-stabilized, showed a continuous decrease of uniform elongation with increasing solution temperature. The behavior was rationalized in terms of the alpha-beta ratio and the alloy content of the beta existing at the solution temperature. The data indicate that in commercial practice close temperature control may be required to get maximum uniform elongotion, and hence, maximum potential formability, in solution-treated sheet. Bend-test data also were obtained for the solution-treated conditions. A MOST important objective of current titanium research is the development of age-hardenable alloys with superior formability in the solution -treated condition. Alpha-beta titanium alloys have been shown to be amenable to high-strength aging treatments after solution-treatment in the alpha-beta field.' However, heat-treatment data on the properties of solution-treated sheet, such as uniform elongation, minimum bend radius, and flow properties, which have a bearing on the potential formability, have not been widely available. This paper presents only the most significant results of a research program conducted at Battelle for the Air Force in an effort to develop sheet alloys that can be formed readily as solution-treated and subsequently aged to very high strengths. Data for 10 compositions representative of the more than 25 alloys studied in this program are presented. A primary objective of the paper is to demonstrate the pronounced dependence of the flow characteristics and uniform elongation on solution-treatment temperature. This effect is believed to be vitally important in the commercial heat-treatment of age-hardenable titanium sheet alloys. Experimental Procedures Melting and Fabrication—The nominal and actual compositions, beta transi temperatures, and rolling temperatures of 10 of the 30 alloys studied are presented in Table I. Stock :€or two of the alloys, E (Ti- 8Mn) and J (Ti-6A1-4V) was obtained from commercial heats. The remaining heats, except D and I, were double melted as 10-lb heats in a consumable-electrode furnace. Melting stock was 120 Brine11 hardness sponge. The oxygen and hydrogen analyses spotted throughout the heats indicate the range of interstitial levels resulting from the melting practice used. Heats D and I were melted as 20-lb ingots with the same grade of sponge. These ingots were cut in half and one portion used in the present evaluation. The ingots, which were about 4 in. diam and 4 in. in height, were upset forged and drawn at 1750°F to sheet bar 5/8 in. thick by 2 1/2 in. wide in such a manner that the top of the ingot corresponded to the top of the sheet bar. Slabs of the sheet bar, 5 1/2 in. in length were scalped to 1/2 in. thickness and rolled at the temperatures indicated in Table I to approximately 0.055 in. sheet. Elongation during rolling took place at 90" to the original forged length. The fabrication procedure used is described in some detail since the experimental heats showed considerable directionality in mechanical properties. The rolling procedures for the commercial heats were unknown, but were such as to produce essentially isotropic properties. All heats, as rolled, showed microstructures typical of alpha-beta alloys worked in the alpha-beta field; that is, the structures consisted of equiaxed alpha particles in a beta matrix. Heat Treatment— The effects of solution and aging heat-treatments on the properties of the alloys were evaluated uSing longitudinal and transverse tensile and bend coupons sheared from the sheet. Two or three solution-treated conditions were evaluated for each alloy. In addition, the alloys were also tested after annealing at 1200°F for 4 hr and furnace cooling. The solution-treated and annealed conditions were those in which the alloys might be expected to

Jan 1, 1959

PRESIDENTS DAVID THOMAS 1871 R W RAYMOND 1872-1874 A L HOLLEY1875 ABRAM S HEWITT 1876 T STERRY HUNT 1877 ECKLEY B COXE 1878 - 1879 WILLIAM P SHINN 1880 WILLIAM METCALF 1881 RICHARD P ROTHWELL 1882 RICHARD W HUNT 1883

Jan 1, 1910

By W. H. Caruthers

ECONOMIC utilization of all by-products has long been the goal of American industry. One of the first groups that was popularly supposed to have achieved its aim was the meat-packing industry, which reputedly found a use for everything except the squeal of the hog. To the metallurgist, slag has always been the principal wasted by-product, representing a loss not only of material, but of heat. Slag does not possess many qualities that appeal to man's imagination or suggest a romantic influence on the daily life and progress of a community or nation. It is a bulky product, and space for its disposal within reasonable hauling distance of a smelter is not always available; the iron-ore smelter especially has been wont to find space for slag disposal at a premium. Therefore, the success that has been attained in recent years in finding a use for iron blast-furnace slag is notable. It has become a vital economic factor in the construction industry in areas where it is available. Its use may suggest further possibilities of an economic outlet for the slags from nonferrous smelting as well.

Jan 1, 1940

By Bedrand L. Johnson

THE phosphate-rock industry is built upon natural deposits of rocks and minerals in which the element phosphorus is present as a phoshate. The term ?phosphate rock? is a general one, applied to certain rocks of different degrees of consolidation and of diverese origin, charater and occurrence, composed of intimate mixtures of several phosphate minerals, largely submicrocrystalline, usually calcium phosphates, in commerical quantities, with various impurities. This term includes phosphatized limestones, sandstone, shales, and igneous rocks; nodular phosphates ; residual weathered phosphatic limestones ; vein phosphates ; and phosphatic sediments, both consolidated and unconsolidated.

Jan 1, 1944

By E. T. Turkdogan, W. L. Worrell

The rate of reaction of hydrogen sulfide with ferrous sulfide was studied by measuring the initial rates of sulfidation of iron strips in hydrogen sulfide-hydrogen-argon mixtures at 670°, 800°, and 900" C. The time-dependent surface sulfur activity is derived from the instantaneous rate of sulfidation with the assumption that diffusion in the sulfide layer is in a pseudo-steady state with the gas-sulfide chemical reaction. The rate of sulfur transfer from hydrogen sulfide to the surface of iron sulfide is proportional to the partial pressure of hydrogen sulfide and inversely proportional to the activity of sulfur at the surface of the sulfide layer. The derived rate equation is based on the assumption that most of the surface sites on the chemisorbed layer of iron sulfide are occupied by sulfur atoms and that the slow rate-controlling reaction is the dissociation of hydrogen sulfide on the chemisorbed layer. The experimental results are in reasonable accord with this reaction model. 1 HE slow approach to parabolic growth rate in the sulfidation of iron in hydrogen sulfide-hydrogen mixtures is a manifestation of slow approach to surface equilibrium between the gas and the surface of the sulfide layer. For example, at 800°C and Fig. 7 in Part I, the parabolic growth rate begins after approximately 1 day of sulfidation time. With decreasing temperature and decreasing partial pressure of hydrogen sulfide, the time necessary to reach gas-sulfide surface equilibrium is much longer. These observations are similar to those reported previously by Turkdogan et al.' on the oxidation of iron to wustite in hydrogen-water vapor mixtures. The slow approach to gas-sulfide equilibrium is well-demonstrated by the results in Fig. 1 where the square of the weight gain per unit area, ( g S per sq cmI2, is plotted against time for gas mixtures having PH g//>H = 1.0 with 0, 25, 50, and 67 pct Ar at 800°C. The value of 1.5 X lo-' (g S per sq cm)' corresponds to almost complete sulfidation of the iron strip (- 0.05 cm thick) to iron sulfide. The points fall on S-shaped curves. If the inflection parts of the curves are considered to be linear, thus indicating parabolic growth rate and the establishment of gas-sulfide equilibrium, their slopes would have to be the same for a fixed ratio in the gas mixture. Such is not the case, and the slopes for the "linear" parts of the S-shaped curves are lower than the value when gas-sulfide surface equilibrium is established. The subject matter of this paper is the kinetics of the surface reaction of hydrogen sulfide with iron sulfide during the early stages of sulfidation of an iron strip. EXPERIMENTAL RESULTS The apparatus and materials used were the same as those discussed in Part I. In the present experiments of relatively short duration, a purified iron strip, 5 by 2 by 0.05 cm, which was suspended in the uniform hot zone of a vertical zircon tube, reacted with a flowing gas mixture of hydrogen sulfide-hydrogen-argon. The sample was suspended from a gold chain attached to a calibrated silica spring. The amount of sulfur picked up by the iron, which formed a layer of iron sulfide, was determined by measuring the displacement of a reference point on the silica spring, using a cathetom-eter. In all cases, the degreased sample was first annealed in a stream of oxygen-free dry hydrogen for several hours to remove any impurities such as oxygen, nitrogen, or carbon which might have been present on the surface of the sample.' The rate measurements were carried out at 670°, 800°, and 900° C in hydrogen sulfide-hydrogen-argon mixtures with pH2 s/Ph2 ratios from 4 to 0.1. In a few experiments of short duration no sulfur deposition was observed in gas mixtures with (comments concerning sulfur deposition at high pH s/ph ratios were made in Part I.) Typical examples of the results obtained are shown in Fig. 2 for two temperatures and two gas compositions. With the present experimental technique, reproducible rate data could be obtained only after a uniform

Jan 1, 1969

By Clyde E. Williams

DESPITE the confusion resulting from the depression and the beginnings of recovery, important progress in all branches of iron and steel metallurgy has been accomplished during the year 1933. Research work has been intensive and highly technical, with increasing attention paid to fundamentals. Plant application of research developments has been rapid. Highly specialized laboratory methods were used for the study of iron-ore concentration methods. More attention has been given by the blast-furnace operator to the sizing of ore and the elimination of fines from the charge by the use of sinter. Combustion in the open-hearth has been placed under better control and the insulation of open-hearth furnaces has spread rapidly, with resultant higher fuel efficiency and better control of the melting and refining operations. Control of iron oxide content in the slag and the determination of iron oxide and other inclusions in steel received great attention during the year.

Jan 1, 1934

By T. Lane Carter

BEFORE describing the experience with the Chinese on the Rand and the work they have accomplished, it will be necessary, sary, first, to give a brief account of labor-conditions in the Transvaal since the war, and then to show how the necessity of importation of labor arose. As is well known, the Transvaal mines are run on the dual system of labor-that is, the rough work is done by colored laborers under the superintendence of white men. From the start of mining operations in South Africa there has been the cry of shortness of native labor, due in great measure to the failure of Kaffirs to work continuously in the mines. While he works, the Kaffir is a satisfactory laborer, but his period of service is short, averaging about nine months. People unacquainted with the Kaffir have maintained that, by offering a higher wage and better accommodation, better results would be obtained from the native workers, but an increased wage simply aggravates the trouble. The Kaffir's wants are few. While at work he spends little of his money, and before long has sufficient capital with which to buy wives and become a gentleman of leisure. Doubling the wage of the Kaffir means that he acquires a competency in half the time, so that his period of service is correspondingly reduced. In 1899, before the war, there was always a cry about the scarcity of Kaffir labor. The highest number of natives at work was in July and August, 1899, when nearly 100,000 were employed. At the outbreak of hostilities the Kaffirs were scattered far and near, many doing well during the war by working for the military authorities. On the, resumption of mining operations on the Rand a serious mistake was made. Based on past experience, it was argued that if the whole industry decided to start anew with

Sep 1, 1908

PRESIDENTS DAVID THOMAS 1871 R W RAYMOND 1872-1874 A L HOLLEY1875 ABRAM S HEWITT 1876 T STERRY HUNT 1877 ECKLEY B COXE 1878 - 1879 WILLIAM P SHINN 1880 WILLIAM METCALF 1881 RICHARD P ROTHWELL 1882 RIVHARD W HUNT 1883

Jan 1, 1910

By J. W. R. Rayner

THE conventional method of making water gas involves individual plants for the separate carbonization of coal to coke and the subsequent gasification of coke with steam. The process demands lump coke, preferably made from the best quality of coking coals. The ash in the coke should have a high melting point and the gasification process suffers a loss of efficiency when cokes with low ash-melting points are used. In Britain, these coals are generally the most expensive and they are readily available only in certain localities. The coals not suitable for making lump coke, or yielding only poor quality coke, are much more widely available and are generally cheaper. DEVELOPMENT OF ALTERNATIVE PROCESSES In Germany, processes have been developed and operated commercially for the production of water gas from very low-rank coals such as brown coal and lignites, but much less effort has been spent on processes to use coals of intermediate rank, which are widely available in Britain. The brown-coal processes use coal in the form of either dust or briquettes. The most successful of the dust-gasification methods is the Winkler process, which made a substantial contribution to German oil production during the war. It uses coal in the size range 0 to 8 mm and the fuel bed is blown with a mixture of oxygen and steam at a rate high enough to give it a characteristic boiling motion or, in present-day phraseology, at a rate more than sufficient to fluidize it (Fig. 1). Air cannot be used to provide the heat required for gasification, for vari¬ous reasons. In the first place, to make the process continuous by mixing air and steam would involve the production of a lean gas containing much nitrogen. If a separate blow were used, a large amount of potential heat would be lost because the blow gas in such a process would contain a very high percentage of carbon monoxide. Oxygen is necessary therefore and oxygen remains relatively expensive for use in gasification. In the Winkler generator, formation of clinker caused by local overheating does not occur, because of the mobility and high heat transfer of a fluidized bed. These properties of fluidized dusts have been used most successfully.

Jan 1, 1953

PRESIDENTS DAVID THOMAS 1871 R W RAYMOND 1872-1874 A L HOLLEY1875 ABRAM S HEWITT 1876 T STERRY HUNT 1877 ECKLEY B COXE 1878 - 1879 WILLIAM P SHINN 1880 WILLIAM METCALF 1881 RICHARD P ROTHWELL 1882 RICHARD W HUNT 1883

Jan 1, 1917

PRESIDENTS DAVID THOMAS 1871 R W RAYMOND 1872-1874 A L HOLLEY1875 ABRAM S HEWITT 1876 T STERRY HUNT 1877 ECKLEY B COXE 1878 - 1879 WILLIAM P SHINN 1880 WILLIAM METCALF 1881 RICHARD P ROTHWELL 1882 RIVHARD W HUNT 1883

Jan 1, 1910

By Walter J. Mead

By American tradition, if not by rational decision, publicly owned natural resources have been transferred to private industry for processing. The process of transfer requires specific determination of the price which the patentee, buyer, or lessee must pay to the government in exchange for the right to develop a resource, and selection of the patentee, buyer, or lessee from among several possible contestants. Pricing of natural resources owned by the government presents a set of problems quite different from ordinary commodity pricing. Natural resources in situ are not homogeneous commodities. Within any class of natural resources, specific leasable parcels will differ in value by reason of location and accessibility, as well as quality and quantity. Thus, there is no "going price;" every lease within a specific resource class will have a different value. To complicate further the pricing and buyer selection problems, competition may not be reliable. Natural-resource markets are characterized by oligopsony conditions. In a significant number of cases, as will be shown later, there has been only one bidder for a given lease, and in most lease sales the number of bidders is equal to or less than three. As a further complication, there is great uncertainty regarding the value of specific resources, even among the best-informed buyers, as well as within the leasing agency. In some instances, particularly with regard to oil and gas resources, there may be uncertainty about the presence of resources, as well as the quantity and quality of any resources contained in the tract offered for lease. In other cases, such as oil shale and some deep ocean minerals where new technologies are involved, the presence of the resource is clearly established. There may be a relatively high degree of knowledge about the quantity and quality of the resource, but there is great uncertainty concerning the cost of production. These problems in total make it difficult for the leasing agency to appraise accurately the resource to be leased, as well as for the potential bidder to calculate a bid price that will yield him a normal profit. The pricing goal of the federal government as the seller or lessee may be to capture the economic rent; that is, the price of a resource might equal its discounted present value. A required price substantially above this amount would either generate no bids, or, in the long run, would bankrupt the buyer. A price below this amount is a disguised subsidy to the lessee. A subsidy to mineral lessees, as to any other economic interest group, as a minimum should be justified by a clear showing of net external benefits from the economic activity. In the case of timber sales by the U.S. Forest Service, the Forest Service Handbook asserts that "the aim in national forest stumpage appraisal is to determine market value,"8 and "market value" is equated to "fair market value." Regarding minerals, there is no reference in legislation or regula-

Jan 1, 1976