The US Department of Energy retained Denver-based Meagher Energy Advisors Inc. on Apr. 22 to sell Naval Petroleum Reserve No. 3 (NPR-3) in Wyoming—better known as Teapot Dome. But the bigger impact may come from the ongoing sale of the Rocky Mountain Oilfield Testing Center (RMOTC) within it.
Both divestitures represent transitions: Teapot Dome, which is named for a nearby rock's resemblance to a teapot, was created by presidential order in 1915. It became synonymous with scandal in 1923 when a US Senate committee discovered Sec. of the Interior Albert B. Fall secretly leased reserves there and in California to private oil companies.
Fall, who resigned shortly before the scandal broke, was convicted of taking bribes from executives of the two companies. The reserves were returned to the Navy in 1927, which closed the 10,000-acre field although a few exploratory wells were drilled in the 1950s and '60s.
Jurisdiction for the reserve was transferred in 1977 from the Navy to the newly-created DOE.
When an oil price plunge in the mid-1980s made major oil companies slash their research and development budgets and begin concentrating operations overseas, the industry sought federal support for more hands-on, applied field technology that independents could use, according to an Oct. 13 DOE article.
"Commercial field testing began in 1995 and many new technologies and processes with implications for drilling, production, enhanced recovery and environmental protection, reducing costs, increasing efficiencies, and renewable energy development have been tested and advanced in the time since," it said.
Neutral test environment
DOE said RMOTC provided a neutral, real-world test environment for innovative technology development, with both project risks and costs shared by partners over the years. Cost-sharing was discontinued during fiscal 2011, and all testing was then performed through 100% funds-in arrangements.
NPR-3 generated $6.3 million in revenue deposited in fiscal 2013, and production is expected to increase in 2014 as a result of continuing enhancement efforts, DOE said. The department also determined in 2013 that the reserve and the RMOTC should both be sold by Dec. 31. RMOTC's next sale of equipment will take place May 7-13 through the General Services Administration.
None of this means the federal government is moving completely away from supporting oil field technology development. It will stay involved in basic research on oil, gas, and other forms of energy through its National Energy Technology Laboratories, said Sec. of Energy Ernest J. Moniz.
"There will be more cofinancing because we're in a different world now with financial markets than we were 4 years ago," he told the US Energy Association's annual meeting on Apr. 23. "We will continue to review the entire energy innovation chain."
