Evening star., 1924-01-06
ISSUES NOW INVOLVED
In TEAPOT DOME LEASE
Causes of Fight Over Oil Fields, Which
Has Brought Senate Investiga-
ton, Are Revealed.

oil supply when vitality needed. The
lease Of the Teapot Dome reserve and
the others in California is not going
to provide an adequate reserve, 1t is
said. What the government wanted
for the Navy was oil, perhaps at
time when the cost as represented in
dollars and cents would be the least
important item. Oil is a prime essen
tial for first-class Navy under mod
ern conditions. 1t is required for
speed, and Navy boats must be speedy.
Under the plan now adopted, the
Navy will receive as royalties from
the leases fuel oil. which will be
stored in the tanks. But the develop
rnent of the Diesel engine and others
| may revolutionize the Navy vessels;
: II may be that not fuel oil but gaso-
line Is the greatest need Of the Navy
In tho future. The fuel oil provided
will have had the gasoline removed.
Certainly, it Is pointed out, the air
service will need gasoline and not
fuel oil.
Navy Would Have Had More.
The claim has been made that the
Oil in Teapot Dome would be drained
away to a very great extent by the
wells on adjacent property. But IL
now appears that the government Is
obtaining from the wells profiting by
the drainage varying from 25 to so
per cent, as against II per cent
| realized under the Mammoth lease. Two
experts employed by the Senate COM
mittee have testified that that por-
ton OF the reserve lying north OF a
great fault which cuts across the
structure would eventually be Sc
riously affected and IL ought to be
leased. One of the experts on exam
fnatfon by the committee did not de-
velop any justification for leasing
the part Of the reserve south OF the
fault, in which he estimated there
are 100000 barrels of oil. OF the
100000 barrels north Of the fault
it was estimated that % per cent, o.
100000 barrels. would have been lost
If the reserve had not been leased.
II there had been a loss of 100000
barrels from the total reserve there
would still have been left $4,000. 600
barrels OF crude oil, it is contended.
for the future use of the Navy, in
stead Of a probable 1,666.o0o barrels
Of fuel oil in tankage along the coast.
While the investigation was
brought about by the leasing of
ravaf reserve No. 8, It has been shown
that the whole of naval oil reserve
No. 1, in California, has also been
leased to the Pan-American Petro-
leun Company, controlled by the Do
benny interests.
1t appears also that this company
has secured a contract for the con-
struction of tankage at Pearl Har-
Dor, Honolulu, adequate to hold
100000 barrels, to be paid for in
crude oil from the naval reserve TO
the amount of 100000 barrels, in
Guiding appurtenances in the way Of
docks and wharves, etc. This com
pany secured further contract for
the construction of tankage to be
paid for in oil estimated to call for
about 100000 barrels. Further. a
plan has been outlined in the Navy
Department looking to the construc-
tion Of tankage costing about s1o3,-
00o, 900, to be paid for in royalty oil.
Leasing Brings Criticism.
For many years the Navy Depart
ment resisted efforts to bring about
the leasing of. the oil reserves, ex-
cept in cases where drainage was
destroying the reserves. The admin
istration Of naval oil reserves was.
during the Harding administration,
turned over to the Interior Depart
ment, and former Secretary Fall ne
gotiated the leases of Teapot Dome
to the Sinclair interests and of naval
reserve No. l to the Dohenny in
tsrests.
This course was criticized imme-
diately by many members Of Con
gress and by a number of the naval
officers who had given particular at
tention to the naval oil reserves. l.
was defended by Secretary Fall and
by Secretary DENLY Of the Navy.
The investigation by the Senate
committee has covered a wide range.
and is not yet completed. When it
is, majority and minority reports may
be expected, It is said.