The Energy Evolution - Hydrogen and Fuel Cells: Advances in Transportation and Power - page 34

ing for ways to enhance domestic oil supplies. In 1976, Congress passed
the Naval Petroleum Reserves Production Act authorizing commercial de-
velopment of the Reserves. Crude oil and natural gas from the Reserves
were sold by DOE at market rates.
One of the largest of the federal properties, the Elk Hills field in
California, opened for production in 1976 and became the highest produc-
tion oil and natural gas field in the lower 48 states at one point. In 1992,
the field produced its one billionth barrel of oil. It was only the thirteenth
field in U.S. history to reach this number and while managed by the DOE,
Elk Hills generated over $17 billion in profits for the U.S. Treasury.
The sale of Elk Hills was the nation's largest public divestiture. In
1996, Congress decided that the properties no longer served the national
defense purposes as envisioned in the early 1900s, and authorized steps
towards divestment or privatization.
In 1998, the Department of Energy and Occidental Petroleum
Corporation concluded the largest divestiture of federal property in the
history of the U.S. government. This completed a process that began in
1995 when the Clinton Administration proposed selling Elk Hills. The di-
vestment removed the federal government out of the business of produc-
ing oil and gas at Elk Hills.
In 1995 the Clinton Administration proposed placing the federally-
owned Elk Hills Naval Petroleum Reserve on the market as part of its
efforts to reduce the size of government and return inherently non-fed-
eral functions to the private sector. In 1996, the Congress passed and the
President signed the Defense Authorization Act for Fiscal Year 1996 con-
taining authorization to proceed with the sale. In 1998 the Department of
Energy sold Elk Hills to Occidental Petroleum for $3.65 Billion.
The Department of Energy also transferred two of the Naval Oil
Shale Reserves in Colorado to the Department of the Interior's Bureau of
Land Management. Like other federally owned lands, these properties are
offered for commercial mineral leasing, primarily for natural gas produc-
tion and future petroleum exploration.
The DOE still retains oversight of two Naval Petroleum Reserve prop-
erties and one technology testing center: Teapot Dome Naval Petroleum
Reserve #3 in Wyoming and a small stripper well oil field with 540 wells.
The Rocky Mountain Oilfield Testing Center identifies and resolves tech-
nical and environmental issues associated with the production, distribu-
tion and use of the nation's energy resources. It was established in 1994
and is the only oil field testing center in the United States.