, 1922-10-19

u 'SohihB LOT lS SCHOOLS and
omnsade sp ric1 Id al of DTf% eapoi Do ass's ss 5 S Sa a9' p In4sG59r clf Rss. rSs-
President Wilson approved this Withdrawal April 80, 1915. and it was
MIA rs somo TO we ens In NAV, Nayal s-M eseryes and 2 we're created in carfor
be- See ne dr CreauO N OF 1.-the IN res reserves a, Prior Prior to March A. 1921, 1855 wells had
estimated at the Government lost, through drainage fom these wells
o reserve lands. 6,SoO.ooo barrels Of ROYALTY oils, valued at sS.SOOOOO.
tr.,oN men Ike. ReserV tu l and IN 2 were created President Wilson's admins
of existing wells o n these reserves. under thu terms of the general ieas-
dress on t hs'e oaa d; 19aG j. P 3Se so"is S SoT1 Ey,, of the mai Navy Daniels ases, aa,
the necessity or additional legislation for the development Of these
1T therefore becomes imperative, even when viewed from
whereby HD wells m SpP be- drilled EnG' for %p protection @ese1n' ag.6 Ss 9 9To'1as
TSa4 o aa]1oen It lands nSst,o Or t suPply ol fr Governments needs.
Naval Reserves; or ROYALTY oil purchased, a be exchanged
may be sold Q r storage provided for excess oil if considered
70 III In order to bring this about boz" the Secretary suggested an amendment
to take possession OF these reserves, and TO conserve, develop. use and
ot serW uq ms Im me n n n storn ,ScreI on aT resSo o b y contract lease or
Of Of the oil and gas products thereof. and those from all royalty oil, for
The House committee took no action o this suggestion. but o
by the Senate Naval Committee $ pmto of the Naval bill. they thus
.n,., In the 9s6 latter t .5 1%, of ass1 the Secretaries seer, srs:,. of the Nay, Nav and interior
under the above provisions in the Naval Bill. for the taking OF govern
at points E%s dc" designated n%d S'f tHe Navy a in Z Hawaii Ia Ssan'Hss or f'' e" lin storage
entered i A% with it he Mammoth ana 'n' on s1V coR RPoES'9 for Of a iS d q SSR[5nSt "o oi
Naval Reserve rye No 3 the Teapot Dome Under this contract ROYALTIES
a production of fifty barrels per well and running to 10 50 SOP per Pe cent nT o On a
1t as determined by the administration that . only would the
benefit the Navy Department. but it would also increase the value of
ways of wyoming and the. Federal Reclamation Service would Increase
'"' The ' admini gPm fgd" succe sSfaiy carried en Og ont !" fs plans in con,
ing the Navy Department and the Interior Department in connection with
that there would be no difficulty in obtaining development of the Naval
Reserve through leases to individuals, yet that development without a
pipe line would but tend to gMt the oil market in wyoming, to lower
the price of the Naval oils and of other royalty oils in Wyoming, and
would not provide transportation of the Government oil Ito storage points
upon the sea coast, An individual could not handle the proposition.
The ordinary producing companies, even if they we're capable OF
utilizing millions of dollars. could not handle the proposition. The oil
monopoly in wyoming must not be made more stringent through action
The entire proposition was handled by the Secretary of TIL interior
at least three IF the great oil companies # the United States. The only
difference in the method Of handling tho matter from that utilized in
the 1ero wyoming muI ReS S" the s., Standard on o group va not consulted Go l1a. nor
"a DESTROYS of ending thu oil monopoly in wyoming. In this Gonnee-
ton of the ipe line mi the proposition as declined owing to the fact
that better propositions were made by others, and to the further fact
that the Secretary of the Interior a endeayoring to create competition
owing 0 the necessity of constructing the pipe line. tankass
royalty oil for delivered fuel oil. and creating competition in Wyoming
adopted in California had 10 be followed. Those companies capable Of
meeting the requremens had to be invited to submit propositions
1t wal determined that the proposition submitted by Mr. Sinclair
va the advantageous to the Government, and after thorough in
the Cabinet a contract was finally entered into whereby the Sinclair in.
teresss YER to develop the Teapot Dome
mediate drilling of twenty wells in DESIGNATED portions ot the Teapot
Naval Reserve and the continuance of development with diligence; for
wharfage, breakwaters and pipe lines without cash outlay to the Gov.
points designated by the Navy Department from Mexico to Canada upon
the Atlantic seaboardi or h payment Of ROYALTIES tn excess Of the vsr
basis of Mid-continent quotations for the preference right to transport
the st Creek royalty oils through NJ pipe hnei TOT Tn MAINTENANCE
Of 's As p a. fe snG of s a s0% eontqae S't ths navy Department, will have the nee.
sry tankage. wharyes. breakwaters and pipe lines constructed at desig
mated points upon the Atlantic coast 1t w mn " We Its oil axe mo 1%n c"n
ual storage here 1t is evahao and hu oil piaeeam u, mo " con
sruchon storage at strateeic poInte whore 1t is available tor or eyeTy
ming oils; competition WIN be created in wyoming oil markets; MID
State property viii be Increased mi ol production VIII pay Its tT snare
Sa I'm IDsop %S OG ma prp%E" tSo STATE Of wyoT MINI wi viii recere higher Tprrice
for IT'S royalty oil, and under the terms OF tn Mondel em y per cent mi
receive increased funds and will be able to do more in developing Recia
Federal Government increased returns for its proportion OF n Govern