, 1922-04-20
MID.C0NTINENT PRICES
FOR WYOMING CRUDE
Investigation Being MADE BY GOVERNMENT WILL
UNDOUBTEDLY SHOW that WYOMING CRUDE
OIL IS ENTITLED To RECEIVE same
Price AS MID-CONTlNENT CRUDE

On April l7th, George Il. Brimmer.
of this city. sent to Congressman
Mondell the following telegram rela-
tive to the oil situation in Wyoming:
Cheyenne. Wyo., April II, 1922.
"F. w. Mondell.
~. S. Capitol Building,
"Washington, d. G..
1.-THE Denver Post, of April 18th.
announces h contamination of a
contract between the government
and Sinclair interests, whereby Tea
pot Dome would be developed by the
Sinclair interests. and a price paid
for the oil equal to the mid-continent
price for crude oil, and pipe lines
would be constructed from the field
to the EAST upon the development of
oil to an average daily production of
10000 barrels. There is at the pres
ent time a differential of 60 cents
per barrel between Salt Creek crude
and m~id-continent crude. Salt Creek
crude and Teapot dome crude are
practically the same in quality. The
Sinclair contract. II as reported,
would eventually eliminate the diff
ferential now existing in price be-
tween crude of the quality Of the
Salt Creek and mi%d-continent, and
thereby give an increase in price to
the producers of forty-two and eight
tenths per cent, and give a like
increase of forty-two and eight tenths
per zen in the government and state
royalty returns upon Wyoming crude.
The construction of pipe lines from
Wyoming to the east will give us a
ready sale in the markets of the
world at the increased price for all
fhn oil that nan ha nrnHytrnI in tho
State of Wyoming. The preliminary
work of developing Teapot Dome to
an initial daily production OF twenty
thousand barrels and Of constructing
the pipe line will take n year at
least. and it is to the interests of the
government. the State of Wyoming.
and the producers, to have the pres
ent Salt Creek d~ifferential eliminated
Immediately. While | was in Wash
ington in February. Secretary Finney
advised me that the Bureau of Mines
had been Investigating for several
months past the differential existing
between mid-continental prices and
Salt Creek prices, and that from pre-
liminary reports he was convinced
that the differential in price was too
great. Secretary Finney also advised
me that he had requested early and
final report from his investigators.
This report should have been re-
ceived shortly after | left Washing
ton. The clauses inserted in the
Sinclair contract. as reported. where
, by the Sinclair interests would have
to nay for the Teapot Dome oil at the
mid-continent prices for crude indi-
Gates that the Department investiga-
ton had demonstrated that no diff
Ro-~rt,rl nh@rll await hnfu.nnn Salt
| Creek and Teapot crudes on the IL
hand and mId-continent crude on the
other hand. I suggest hat you ascer-
tain from Secretary Finney the ex-
act findings Of the department in
vestigatOrs and the conclusion
reached by the Secretary as the re-
suit of such findings. and IL such
findings and conclusions are as are
Indicated by the reported claus In
the Sinclair contract as to the price
to be paid for the Teapot Dome
crude, then I suggest that you follow
the matter UP by the Introduction OF
a resolution calling upon the Interior
Department to advise Congress
whether the investigation made by
the department showed that the diff
ferential between the Salt Creek
crude prices and m~id-continent crude
prices should be eliminated. The re-
port of the department in response
to this resolution would officially set
forth the conslusions OF the investi-
gators and would in itself have a
tendency to cause the raising Of the
Salt Creek crude prices to the mid
continent prices and the elimination
Of the differential. My idea is the
obtaining OF direct action by h De-
partment OF the Interior whereby
through the power now existing in
the department itself. 1t could force
the elimination OF the differential on
Salt Creek crude, and in the event
that the department determines that
1t cannot directly act. that then con-
gres3ional action car be taken where
by the government royalty oil would
be placed upon the open market and
enhanced values obtained would help
the producers and Increase the royal
ties Of the government and State.
Such action by the department and
Congress would supplement the &C
ton already taken by the Depart
ment toward the elimination OF the
differential through the Sinclair con-
tract, and would insure substantial
Increase in prices for crude. l also
suggest Congressional action where
BY thirty-seven and one-half per cent
OF the government royalty from Tea
not would be given to the State of
wyoming. This would supplement
results already obtained by You for
the state through the leasing bill.
GEORGE E. BRlMMER.