The Department of Energy opened bids this week for purchases of oil from its Teapot Dome petroleum reserve in Wyoming with the apparent high bid nearly $40 a barrel.
Only 4,400 barrels of oil a day are involved, but Powerine Oil Co. of Santa Fe Springs, Calif., offered a "bonus" of $7.52 a barrel above the posted price for oil being sold privately in the area. DOE officials said the posted price currently is about $32 a barrel.
Teapot Dome is in Natrona County, north of Casper, Wyo. Oil from another government petroleum reserve, Elk Hills, in Kern County, Calif., recently commanded prices up to $41 a barrel.
Bids about to be accepted by DOE for 127,465 barrels a day of Elk Hills oil offered bonuses up to $11.12 a barrel over a $30 posted price. DOE officials said yesterday the price could be less than $30 by next month when the new contract period begins, lowering the highest Elk Hills price to $39 a barrel or less. Most of the Elks Hills bonuses were in the $5-per-barrel range.
Oil from Teapot Dome has usually brought a higher price because it is in a more oil-short part of the country and its characteristics make it more desirable for some types of refineries, DOE officials said.
Teapot Dome was the focus of a bribery scandal in the 1920s when President Warren Harding's secretary of the interior, Albert Fall, leased it to oilman Harry Sinclair without competitive bidding. Fall also leased Elk Hills to Edward Doheny without bids and it was later learned Doheny and Sinclair both "loaned" Fall large amounts of money. Fall went to jail for accepting bribes.
There is no oil production from the government's other petroleum reserve, which is north of the Brooks Range in Alaska on the shore of the Arctic Ocean.