A federally-owned petroleum reserve in Wyoming at the center of the 1920s Teapot Dome scandal could soon be sold or leased to a private producer — nearly 100 years after its misuse sent a cabinet secretary to prison.
The federal Naval Petroleum Reserve No. 3 near Midwest and the Department of Energy’s Rocky Mountain Oilfield Testing Center in the field are getting spruced up for sale or lease, said Clarke Turner, RMOTC director.
Clark said he’s been told to prepare the facility for disposal. Six government employees and about 75 employees of contracted companies work at the facility, Turner said. He declined to comment on those employees’ job status.
Turner said he couldn’t speculate as to future of the facility, but said it’s “safe to say” leasing and selling the field will be options. He doesn’t expect the government to keep the facility.
The oil field was once the center of the Teapot Dome scandal, a 1920s oil leasing controversy that landed a member of then-President Warren G. Harding’s cabinet in prison for bribery.
Then-Interior Secretary Albert Fall leased the field’s reserves and oil in two California locations to private oil companies at low, no-bid rates in 1922. A ensuing Senate investigation unmasked the scandal, and Fall was later convicted for accepting bribes from the oil companies.
The land was put under the Department of Energy’s control in 1977 and RMOTC was established 16 years later.
Turner said the field and testing center have faced a shrinking budget for years and have lately been able to conduct fewer and fewer tests. He estimated that oil pumped and sold from the field earns the taxpayers about $5 million in annual revenue and about a tenth of that ends up as profit.
“The amount of money the government’s making doesn’t justify the government keeping it,” he said.
If the field is put up for sale, it could prove attractive to producers. The property is near the active Anadarko-owned Salt Creek oil field near Midwest.
“There’s a lot of oil left in the ground,” Turner said, adding that the government owns about 200 producing wells capable of producing a total of about 200 barrels of oil per day.
Bruce Hinchey, president of the Petroleum Association of Wyoming, said he would expect companies to have an interest in the property.
“I don’t know how much oil is left but I’m sure it’s still attractive because there’s a lot of oil in the area,” he said.
If the facility is sold or leased to a private producer, it could be a major blow to companies that in recent years have conducted research in the field.
RMOTC was established on the field in the mid-’90s and has been utilized to test such popular oil and gas production techniques as hydraulic fracturing and enhanced oil recovery. It has also been utilized as a testing ground for renewable energy.
“If they’re going to dispose of it, I’m disappointed because the testing value was something good for the industry,” Hinchey said.
Turner said he isn’t sure exactly when the government will decide what to do with the field, but said he expects a decision this spring. In the meantime, his staff will continue to repair broken pumps and pipelines and re-energize existing wells in the hope they’ll work better.
“If this [disposal] plan is approved, our job is then to do this as quickly as possible and maximize the [sale or lease] value to the U.S. citizens,” he said. “We would do it as quickly and efficiently as possible.”