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this leaseholder. the deposit is ore grade and we concur. On the other hand. we do not
believe it is ore if all new mine, plant storage, and auxiliary facilities were required... "
(Agricultural and Industrial Minerals, Inc., 1978, p. 11).
The conclusions of the Agricultural and Industrial Minerals. Inc. report were: (1)
the WIPP site contains 153 million st of resources of which 29.7 million st are economically
recoverable and classified as reserves; (2) the 29.7 million st of reserves may yield
4.2 million st of langbeinite and 1.8 million st of muriate (sylvite) for a total of 6.0
million st of product; (3) the total potash resource, potential reserves, and potential
products are small in relation to Carlsbad or United States totals; and (4) zone IV of the
site (outer zone) contains most (69)% of the resource tonnage. By releasing it for mining,
the long-range impact of the withdrawal is minimized.
Sandia National Laboratories, 1978
The Sandia National Laboratories (1978) report, edited by D. W. Powers and
others, restated in the executive summary that potash salts and natural gas are the only
two resources of economic significance under the WIPP site. It included reviews of all
previously considered mineral resources and appropriate references. Chapter 8 reviewed
all mineral resources in detail. Citing a paper by Foster and Stipp (1961), the chapter's
author (G. E. Griswold) stated that the Precambrian basement lies at a median depth of
18,000 ft at the WIPP site. He concluded that no development of mines is practical to
exploit possible sulfides in the metamorphosed rhyolites and tuffs composing the basement.
These resources had not been previously considered.
Sipes, Williamson, and Aycock, Inc" 1978
Sipes, Williamson, and Aycock, Inc. (1978) evaluated the hydrocarbon potential
of a single tract of land within the WIPP area. Tract ill is about 320 acres, mainly in the
north part of sec. 361'225 R31E. Proved undeveloped reserves were assigned to the
Atoka "formation" and probable reserves to the Morrow "formation." Future net revenue,
discounted 10% per anm'm. was projected at $5,566,653, and the fair market value for a
single well on this tract was estimated to be $3,507,653 as of June 17, 1977. Directional
drilling was considered feasible, requiring a horizontal displacement of 3000 ft. The
incremental cost of directional drilling was projected to be $415,945 for a drilling date of
January I, 1978.
Sipes, Williamsou, and Associates, 1979
Sipes, Williamson, and Associates (1979) developed three scenarios or cases that
were evaluated for directional drilling to obtain the hydrocarbons underneath WIPP and
to estimate the differential over conventional straight-hole drilling. The incremental cost
for drilling all 55 wells from outside of zone IV (case A) was $87,226,000. The cost for
drilling of 44 deviated holes and 11 straight holes in zone IV (case B) was $57,339,000.
Drilling all wells from zone IV as straight holes (under zone IV) or as deviated holes
(under zones I-ill) had an incremental cost of $21,790,000. Assumptions made: (I) the
primary target is Pennsylvanian rocks at an average depth of 14,750 ft, (2) well spacing
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