, 1922-05-04
FALL MAKES
statement
SECRETARY OF The INTERIOR ISSUES
STATEMENT Which SHOWS THAT
TEAPOT DOME CONTRACT WILL
BENEFIT PEOPLE OF STATE,

CHEYENNE. Wyo.. April -.
Ih"r" was no "star chamber" seS-
sion held in connection with the
letting OF the contract for the drill
ing of tn" Teapot Dome. When it
was found that the oil in the dome
was in danger of being drained rap
idly by wells in other fields. the fed
"ral government decided that the
time had come" to act, and consc-
Q~urntly the contract for the Develop
mrnt work WAS let to the
making tn" best bid.
This is tn" essence of an official
statement received here today from
the office of Secretary A. B. Fall, OF
he Department of the Interior. and
tending to clear away much of the
misunderstanding that has arisen
over the mater.
"Whil" there are no wells within
the naval reserve known as Teapot
Dome says the statement in part,
lit was found. after a careful recent
geologic study. that the reserve vas
in danger of being drained by wells
on nearbv lands, and in addition the
government was faced with a num-
Der of asserted claims within the
reserve under the mining law. More
WYE ~ u "a |iNVh llCIi,
lying Immediately contiguous to
the Teapot Dome, and which has
been leased under the general leas-
ing act. was without adequate pipe
Line and refinery facilities, and in
dependent producers have been I'M
able to dispose Of more than 40 per
cent of the possible production of ex-
listing wells. Furthermore, COMPETE
ton was absent from the field
through lack not only Of pipe line and
refining facilities, but of competing
companies.
"Therefore, after careful consid-
Grafton. the secretary of the interior,
with the complete concurrence of the
secretary of the navy, invited and
considered proposals from a number
of prominent oil companies and indi-
viduals for the development Of the
Wyoming Naval reserve, with the ac-
companying guarantee of the con-
strnction OF adequate pipe line facil-
tiles from the field to Atlantic and
Gulf of Mexico points through con-
ncctiOn with existing pipe lines.
THE contract will bring about i'm
mediate competition in the Salt
Creek field. and will add from 40 to
60 cents per barrel to the present
prices of governmental royalty oils,
now amounting to more than 5000
barrels a day. This is secured by
an option given by the government to
sell royalty oils on a basis of mid
continent prices if and when desired.
This production lat present is but
40 pei cent Of the capacity Of exist
ing wells. which will Immediately
be raised to 100 per cent. yielding
to the government for reclamation,
state and treasury purposes approx
imately 10000 barrels of oil per
day. with an added value thereto Of
from 40 to so cents per barrel. or.
in other words, an added price over
and above that which the govern
ment and the independent producers
are now receiving OF more than
$4,000 per day. Before the contract
was approved, the Mammoth Oil
company presented to the secretary
OF the interior deeds to the United
States of all outstanding claims OF
every character in the Wyoming
Naval Reserve.
1.-THE losses from drainage in
these reserves have been enormous,
running into man millions Of dol
lars. The approval Of this contract
will enable the government to save
the remaining oil in these reserves
and exchange it for fuel oil in stor-
age for the benefit of the navy. 1t
is stated to be the policy of Secre-
tary Fall upon expiration OF existing
contracts with the shipping board to
offer the government royalty oils in
Wyoming and Montana outside OF
naval reserves for sale with the prin-
cipal object of bringing a third COM
petitor into the field with refineries
INT pipe lines. thus insuring COMPETE
ton and the highest securable prices
for government oils"
As the facts Of the case become
better known in Wyoming. it is ex-
pected that the criticism from all
quarters. except those Of the disap-
pointed bidders. will be allayed; that
the governments claim that the re-
serve was in danger OF being de-
pleted, with vast loss to the people,
will be found correct; that the TAX
ing OF steps to place Wyoming oils
in competition with the oils OF the
rest of the world, and at q higher
price than is now being received
will gain the endorsement Of all con-
cerned; and that its action in enter
ing into a contract with q responsible
company-after taking up the pro-
position with several. and securing
the best possible contract - to Sc
cure the greatest conservation and
use OF the oil in the reserve, will be
heartily endorsed by the public at
large.
"