Government sells scandalized Teapot Dome oilfield for $45M

AP News
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Posted: Jan 30, 2015 4:20 PM

CHEYENNE, Wyo. (AP) — A private company finally will be able to drill legally for oil at Teapot Dome, a remote Wyoming oilfield that remains best known for a political scandal that embroiled the administration of President Warren G. Harding in the early 1920s.

The Energy Department announced Friday that it had finalized the sale of the 9,481-acre Teapot Dome oilfield to New York-based Stranded Oil Resources Corporation for $45.2 million. Stranded Oil was the highest of nine bidders last fall.

Most of the easily accessible oil in the oilfield 35 miles north of Casper already has been tapped out since drilling resumed in the mid-1970s. Stranded Oil specializes in enhanced oil recovery, or recharging depleted oil fields with techniques such as injecting carbon dioxide underground.

Extensive data on the characteristics of Teapot Dome exists from decades of research and development projects at the oilfield, Stranded Oil President and Chief Executive Officer Mark See said in a press release.

"By targeting properties with known characteristics, we reduce the uncertainty and risk generally associated with oil exploration," See said.

Several aging oilfields in Wyoming have benefited from enhanced oil recovery. The technique in recent years has helped push Wyoming oil production upward after 20 years of decline.

Few oilfields anywhere have a history like Teapot Dome.

The site was once one of three federal government oil reserves that were to be left untouched except with the exception of use as emergency fuel supplies for the U.S. Navy.

In the early 1920s, Harding's interior secretary, Albert Fall, accepted $400,000 in "loans" from prominent oilmen Edward Doheny and Harry Sinclair to secretly open the oil reserves to drilling. Fall was convicted in 1929 of taking bribes and served a year in prison.

The leasing of Teapot Dome became public knowledge in 1922, but Harding died unexpectedly in 1923 before a congressional investigation could reveal full details about the scheme.

The U.S. Supreme Court invalidated the Teapot Dome leases in 1927 and the oilfield went undeveloped until 1976, when drilling resumed. The Navy transferred Teapot Dome to the Energy Department in 1977. In 1993, Teapot Dome became the site of the Rocky Mountain Oilfield Testing Center, where the government tested oil development technologies including enhanced oil recovery.

Since 1976, Teapot Dome has produced over 22 million barrels of oil and generated more than $569 million in revenue for the federal government, according to the Energy Department.

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