, 1922-04-29
RESOLUTION FOR
ADOPTED
TODAY, LEASE TO
RUN UNTIL 1912
Photographic Copy Sent
to the Senate Reveals
Long Tenn Contract on
Teapot Development

WASHINGTON, April %.
Investigation of the lease of
the naval oil reserves in Calf
Ifornia and Wyoming by the
interior and navy depart
ments was ordered today by
the senate.
The inquiry win be conducted bv
the public lands COMMITTEES OF which
Senator Smoot OF Utah, is chairman
under n resolution OF Senator La Fol.
lette, Republican, Wisconsin.
Adoption OF the resolution followed
transmission to the senate TO-DAY h.,
the interior department OF a copy OF
The lease OF tho Sinclair on inter.
ests OF n 20-year development prvii.
eye in the Wyoming reserve. There
was little discussion IN tho serate and
on n roll call demanded by Senator
Ia Toilette, the vote was unanimous.
SIS to nothing.
The resolution was broadened TO IN
clude the two California naval re-
serve and. also, at the suggestion of
Senator P~oindexter Republican Wash
tngton. to include inquiry into pfi.
vate drilling IN claims adjacent to the
naval reserves. Tho latter provision
would cove tho administration OF for.
mer Secretary J-sniels OF the navy
department.
1t has not beer defins-eiy determine
ed whom tho Investigation would be-
gin but II II expected to open next
week.
The Ia Toilette resolution called IN
on tho i,,erior department for copies
OF all leases int all other documents
and information relative to the three
reserves in California n Wyoming.
II directed the committe 10 make in.
duiry with reference to the protec-
ton OF the rights OF tie Eover1sment
and the preservation OF its natural re-
sources"
The Wyoming oil reserve lease gives
the Mammoth Oh company exclusive
rights for 20 years for 1.-THE develop
mznt aud exploitation of the Salt
Creek region in the Wyoming reserve
for both oil and gas Construction Of
a pipeline tapping other pipelines
from the mid-continent field to Chi
cago is required under the lease. Tho
Mammoth oil company is given tho
exclusive privilege of purchasing all
gas and oil developed and the govern.
ment under the lease agrees to sell all
oil and gas to the lessee.
Royalties are fixed upon production.
a minimum OF I2h per cent graduated
to rs per cent on oil from wells aver
aging owe 200 barrels n day. The
royalties on gas n from 1915 to
! 1s 20 per cent, according to prcduc-
ticn.
Purposes OF the lease recite that the
government lis desirous OF acquiring
suitable storage for such fuel oil at
points easily accessible to the United
States navy and of avoiding insofar as
possible any risks OF loss of the supply
of crude oil available from the drilling
and operating of wells located outside
OF the Wyoming reserve. :
Another purpose cited is hat the
government desires to create n COM
petitive market and to secure the best
prices obtainable for royalty oil. Ell.
change by the Sinclair interests Of
able for laval vessels is provided in
the lease. under a system OF oil ex-
change certificates and credits. The
lessee is required to deliver oil at mors
than a score OF ports.
The 20-year leasing privilege would
be extended IL oil continued to be pro
duced in paying quantities. The re-
quires the Mammoth Oil company to
bond itself for $3.50. 900 to execute tho
contract n to begin drilling the first
Continued IN Page Four)