Management of the Naval Petroleum and Oil Shale Reserves: Maintaining a Potential
Authors: Butterfield O.R. 
Published: December 2007

The organization and administration of the petroleum and oil shale reserves of the U. S. Navy are discussed and operating problems are defined. The various methods of maintaining a reserve of oil in the ground ready to be produced when needed for the national defense are explained. These include offset production, maintenance of pressure barriers, production of invading water and gas injection. A study of the estimated subsurface migration and the control methods are presented. The author concludes that it is possible to maintain an active pool of oil in the ground for future production and that this philosophy provides sound planning for alleviating future crises in the availability of domestic supply of fuel for the nation's defense.

Introduction

The U. S. Navy's interest in petroleum and in oil shale evolves from stewardship of four petroleum reserves and three oil shale reserves. Conservative estimates place the recoverable oil from the petroleum reserves at over 1.2 billion bbl. The naval petroleum reserves in Alaska comprise come 23,680,000 acres where the greatest oil-finding potential exists. Most of the proved oil, however, is in the Elk Hills field, Kern County, Calif., a field exceeded in quantity of in-place oil by only two other fields in the nation. At the turn of the century it became clear that petroleum would play an increasing important role in the national economy in the years ahead. It became equally apparent that the rapid conversion of the Navy's fleet from coal to oil-burning vessels would require a readily available supply of domestic fuel oil to assure its future requirements. This was also a time when the public lands were rapidly passing into private ownership and the national conservation movement was on the upswing. It was in this climate that the reserves were born. The petroleum reserves were set aside by a series of executive orders in 1912, 1915 and 1923. The shale reserves were established in 1916 and 1924. By the act of June 4, 1920, Congress directed the Secretary of the Navy to take possession of all properties within the naval petroleum reserves not subject to prior claims; to conserve, develop, use and operate the same in his discretion, directly or by contract, lease or otherwise; and to use, store, exchange or sell the oil therefrom for the benefit of the U. S. Since the reserves were established, two changes occurred which have led to controversy over their continued need. The first is that more oil has been found in the U. S. than originally thought possible. Second, the demand for oil by the armed services has increased to such an extent that the reserves have been called "insignificant" by some.

Creation of the Reserves

Origins in the Public Domain

By 1900 the public lands of the U.S. throughout the West were fast passing into private ownership. This steady disappearance of the public domain was taking place primarily as a result of legislation which enabled private persons to enter upon government lands and, upon the fulfillment of certain conditions, receive full fee ownership. Other large tracts had earlier been ceded directly by the U.S. as grants to the states in aid of public school programs, and to railroad companies as an aid for construction.

The turn of this century coincided with a growing realization of the important role which oil was destined to play in the years ahead. It was particularly apparent to the federal government that the future navies of the world were to be powered by oil. The U.S. Navy had in prospect a complete change-over from coal to petroleum and an expensive new ship construction program based on this type of fuel. As a result, the U.S. Geological Survey suggested early in the 1900's that the probable oil-bearing lands in the public domain should be permanently withdrawn from those areas open to settlement. President Theodore Roosevelt directed the USGS to inquire into and to report upon those public lands believed to contain oil. The Geological Survey's investigation was not completed until early in President Taft's administration.

JPT

P. 597ˆ