Arizona republican., 1922-06-09
HARDING SAYS
OIL RESERVE
LEASES HAVE
HIS APPROVAL
Special Executive Message
To Senate Voices Ap-
provalOf Administration
Naval Reserve Leases
IRepublican A. p. Leased Wirel

Harding in a special message to the
senate today stated that the policy
of the navy and interior departments
in dealing with the naval oil re
serves. including private leases, had
his full approval.
The President Transmitted volu-
minous report made to him by Secre-
tary Fall, regarding disposition of
the naval reserves; Mr.. Harding said
the report was not to be construed
as defense of the administration pol
icy, but to give information to the
senate in connection with the inves-
tigation recently ordered.
The Presidents message and Sec
retary Falls report were referred to
the public lands committee, which to-
day received a truck load OF papers
containing all correspondence for
years back with respect to private
leasing on the three reserves.
Secretary Fall, in a letter to the
President accompanying the report,
said that he was handing the Pres
ident the document in the sincere
belief that the contracts entered into
and the policy as formulated and as
inally carried out up to date, will
rebound to the credit of your admin
istration, both in the immediate
present and the distant future"
The President wrote that he was
sending the report to the senate with
the hope thatit might be of assis-
tance 10 the house land committee
in making its investigation under the
direction of the senate resolution.
He added that the report was COM
prehensive and gives details OF the
handling of all naval reserve petro-
leum matters UP to the present date
Il am sure ! am correct the
President continued. "in constituting
the impelling purpose OF the secre-
tary of the interior in making to me
this report. 1t is not to be con-
strued as defense of either specific
acts or the general policies followed
in dealing with the problems incident
to the handing of the naval reserves,
but is designed to afford that expla-
nation TO which the senate is entitled
and which will prove helpful to the
country generally in apprafsing the
administration of those matters OF
great public concern. I think it is
only fair to say in this connection
that the policy which has been adopt
ed by the secretary of the navy and
the secretary OF the interior in deal
ing with these matters was submitted
to me prior to the adoption thereof,
anu the poiiCy uetiucu upon dHu tue
subsequent acts have at all times had
my entire approval
Stressed Oil Losses
Secretary FAN, in his report to the
President after giving an historical
review of the creation of naval oil
reserves and Withdrawals from entry
of oil lands by executive order,
stressed the loss of millions of bar
rels of naval oils valued at millions
of dollars by drainage through adja-
cent drilled wells. He estimated the
loss sustained in this manner from
the three reserves and prior to the
present administration at e.S00,000
barrels valued at $S,S00.0 Greater
drilling activity had been noted prior
to March 4, 1921, than since, Secre-
tary Fall said. He denied that ma
rines of tae United States navy had
been called out to prevent such drill
ings for any reason whatsoever nor
had any other force been used to
preserve at any cost the oils TO the
navy department
The report went into the question
of competition existing in the Cali
fornia reserves between some of the
largest companies in the United
States, including the Standard Oil,
and pipe line facilities, affording the
navy an opportunity to dispose of it's
oil at competitive bids to exchange
crude oil st the well for fuel oil
certificates calling for delivery at
western seaports.
In the Wyoming Teapot Dome re-
serve No. 8, the report said, the sit
uation was not the same. With a
distance of 1000 miles to the Pacific
coast and 1,700 miles TO the Atlantic,
there was no competition and vir-
tually no pipe line.
Breaks Out Monopoly
The Midwest Refining company,
the report said, had, BY virtue of the
geographical situation of the Teapot,
a complete monopoly in transporting
refining and practically in the pur-
chase of all oils in this field. which
included the famous Salt Creek field
adjacent to the naval reserve from
which no outlet exists except through
this company's pipe line. As a con-
sequence. the report asserted. the oil
production from leases in this field
has been curtailed 80 per cent and
the prices received by lessees-the
government and the state of Wyo-
been very much less than
prices paid for similar oils in other
fields more favorably situated.
Under the Sinclair contract. the
Fall report disclosed that pipe line
will be constructed from the Salt |
Greek field connecting with Mid
Continent field pipe lines which come |
east, and the full capacity of the Salt
Creek and Teapot wells will find a !
market at a price obtained in the |
Mid continent, thus increasing the |
royalties to the government as well |
as benefiting the small companies |
who have not now market for their |