Mr. KILDAY. No. Mr. SHORT. Mr. Harlow? Mr. HARLOW. I do not believe so, Mr. Chairman. Mr. SHORT. Mr. Hoover. Mr. HOOVER. Thank you. Mr. SHORT. And you, too, Commodore. Do you have anything to add? Commodore GREENMAN. No, sir. We have concluded all of our testimony, sir. Mr. SHORT. The main thing is for me to talk to Chairman Andrews and have him contact the Appropriations Committee. Commodore GREENMAN. Yes, sir. Mr. SHORT. And dispose of this quickly. Mr. SHORT. Off the record. Mr. SHORT. Well, you gentlemen have been very fine. We appreciate these pictures of this development program you have given us, too. Commodore GREENMAN. We would like to express our appreciation to the committee, too. Mr. SHORT. Tomorrow morning at 10 o'clock we will have you back, Commodore. Commodore GREENMAN. Yes, sir; I am first. Mr. SHORT. On the Elk Hills matter. Mr. SHORT. And also Mr. MacNaughton. Mr. HARLOW. Mr. Woodward will appear for him. Commodore GREENMAN. Mr. Woodward will appear for him, again. Tomorrow morning I will read my statement, of which you have a copy right there in front of you. Then the next point that comes into this picture is a legal point. Captain Franchot, my legal assistant, who has been legal adviser and who has been with us since the beginning of our Elk Hills work, has prepared a legal statement that he will submit, following me. Then Mr. Woodward will follow Captain Franchot. Mr. SHORT. I might say for your information, Commodore, and for others, that on Elk Hills we propose to hear in addition to Commodore Greenman and Mr. Woodward who will appear for Mr. MacNaughton, Mr. Harry Stoltz, a petroleum consultant. Commodore GREENMAN. He is the engineer. Mr. SHORT. That is right. And Mr. Floyd Bryant, vice president of Standard of California. Commodore GREENMAN. That is right. He is here. Mr. SHORT. And Mr. Charles A. Jones, president of Richfield. Mr. SHORT. Mr. Robert E. Paradise. Commodore GREENMAN. Yes. Mr. SHORT. Thomas J. Casey, Rush Blodgett, and S. I. William. Commodore GREENMAN. Yes, sir. I think Mr. Harlow has already advised me of that. To develop our position on this hearing, it is necessary that I present the whole picture. Following that, Captain Franchot will expand on the legal aspects of it, that were brought out at the hearing in Los Angeles. Following that, Mr. MacNaughton will give a short statement, through Mr. Woodward. Then after that will be our engineers to develop the geology that leads us to this conclusion that it is necessary to extend the reserve. With that we will be through. Mr. SHORT. But you propose to have him here tomorrow. Commodore GREENMAN. I propose to have myself, Franchot, Woodward, and Stoltz. Mr. SHORT. If we can borrow our legal light of the committee, Mr. Smart, here, who is working with other subcommittees. I really would like him and Mr. Kilday, who are the lawyers, present. Commodore GREENMAN. I think Mr. Smart is already familiar with the background of it. Mr. SHORT. Will you be here in the morning? Mr. SMART. Yes. Mr. SHORT. Mr. Smart will be here. The committee will stand adjourned until tomorrow morning at 10 o'clock. (Whereupon, at 12 noon, the committee adjourned.) PETROLEUM FOR NATIONAL DEFENSE THURSDAY, FEBRUARY 19, 1948 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON PETROLEUM, Washington, D. C. The subcommittee met at 10 a. m., Hon. Dewey Short (chairman of the special subcommittee) presiding. Mr. SHORT. The committee will be in order. The first witness is Commodore Greenman. Commodore GREEN MAN. Yes, sir. Mr. SHORT. You may proceed, Commodore, with your presentation of whatever information you wish to offer in respect to Elk Hills. Commodore GREENMAN. Yes, sir. STATEMENT OF COMMODORE W. G. GREENMAN, USN (RETIRED), DIRECTOR, NAVAL PETROLEUM RESERVES Commodore GREENMAN. Mr. Chairman and members of the committee, before proceeding with my statement of the Navy's justification of a request for the extension of the boundaries of Naval Petroleum Reserve No. 1-Elk Hills-I would like permission to incorporate into the record of this hearing the following documents: First, a letter from Hon. W. John Kenney, Acting Secretary of the Navy, dated October 10, 1947, requesting the Secretary of the Interior to withdraw certain lands contiguous to the reserve on the north, west, and south to enable the Navy properly to delineate and protect the Elk Hills structure. (The letter is as follows:) The honorable the SECRETARY OF THE INTERIOR, Washington, D. C. OCTOBER 10, 1947. DEAR MR. SECRETARY: Under the unit plan contract between the Navy Department and the Standard Oil Co. of California, relating to Naval Petroleum Reserve No. 1 (Elk Hills), dated June 19, 1944, the Navy has caused the reserve to be explored with the result that data now available substantiates the belief that the productive areas of the Shallow oil zone and Stevens oil zone underlying the Elk Hills extend beyond the present boundaries of the reserve to the south and west, respectively, and the Stevens oil zone may be found eventually to extend to the northward. It also indicates that there are more than one geologic structure at the Stevens horizon within the present boundaries of the reserve. This being the case, it is essential that the boundaries of the reserve be extended not only to protect these zones from future drainage but to permit the drilling of wells to delineate their areal extent outside the present boundaries and to determine the existence, if any, of other zones on the Elk Hills geologic structures. In this connection reference is made to a letter dated March 21, 1942, addressed to the Secretary of the Navy from the President. In this letter the President stated: "In order to protect the oil within that reserve (Naval Petroleum Reserve No. 1), I think that not only privately owned lands lying within the limits of the reserve but also contiguous lands lying within the same geologie structure should be acquired in order to afford permanent protection." To enable the Navy properly to delineate and protect the Elk Hills structure, it is proposed that the Secretary of the Interior, by virtue of authority vested in him by Executive Order No. 9337 of April 24, 1943, order as follows: 1. That the boundaries of Naval Petroleum Reserve No. 1 be extended to include all lands within the area herinafter described, in Kern County, Calif. 2. That, subject to valid existing rights, all public lands within such areas be withdrawn from all forms of appropriation under the public-land laws, including the mining laws, and that they be reserved as part of the Naval Petroleum Reserve No. 1 for the exclusive use or benefit of the United States Navy. 3. That all lands within such areas hereafter acquired by the United States shall, immediately upon acquisition of title thereto, become and be reserved as part of said Naval Petroleum Reserve No. 1. The lands to be included within the proposed extended boundaries of the reserve are indicated on the appended plat and are described as follows: MOUNT DIABLO BASE AND MERIDIAN Township 30 South, Range 23 East, sections 7, 8, and 9, all; section 31, N1⁄2. Township 30 South, Range 22 East, section 10, E1⁄2; sections 11, 12, 13, 14, all: section 15, NE1⁄44; section 23, E1⁄21⁄2; section 25, N1⁄2 and SE4; section 26, NE1⁄4. Township 31 South, Range 25 East, section 14, N2NW; section 15, N1⁄2N1⁄2; section 16, N1⁄2N1⁄2; section 17, N1⁄2N1⁄2. When the Navy Department has explored the above lands and has determined the extent of the productive areas of all horizons within the Elk Hills geologic structure or structures, it proposes again to request the Secretary of the Interior to modify the then existing boundaries of Navy Petroleum Reserve No. 1 to insure that the lands ultimately included are only sufficient to protect completely the interests of the United States in the oil deposits in the geologic structure or structures of the Elk Hills field. In this connection, provided additional exploratory funds are made available, it is estimated that 4 years will be required to make this determination. If this proposal is accepted by you the Navy Department will have no objection to the cancellation of the 1-mile leasing restriction now imposed on public lands contiguous to the borders of all naval petroleum reserves, provided it is understood that as the exploratory program progresses in Naval Petroleum Reserve No. 1, the Navy reserves the right to request the reimposition of this restriction in any direction indicated. In this connection, any request for leases of public lands lying to the north or west of the borders of the extended area should not be approved until after consultation with the Navy Department. In making this request, the Navy wishes to make it clear that it has no intention of acquiring any land overlying any new geologic structure which may be found in the extended area which is unproductive within the original limits of the reserve. I understand that the Director of Naval Petroleum Reserves has discussed this matter with the Under Secretary of the Interior and with representatives of the United States Geological Survey, all of whom are in agreement with the procedure as outlined above. Sincerely, W. JOHN KENNEY, Acting Secretary of the Navy. Commodore GREENMAN. Second, a letter from Hon. C. Girard Davidson, Assistant Secretary of the Interior, dated November 26, 1947, advising the Secretary of the Navy that the Department of the Interior proposed to hold a public hearing to permit all interested parties to express their views as to the propriety of the proposed enlargement of the reserve, and that should the withdrawal be approved, it should be accomplished by an Executive order of the President rather than a withdrawal order by the Department of the Interior. (The letter is as follows:) Hon. JOHN L. SULLIVAN, Secretary, Department of the Navy. DEPARTMENT OF THE INTERIOR, MY DEAR MR. SULLIVAN: Reference is made to the Acting Secretary's letter of October 10, 1947, requesting that the Secretary of the Interior, by virtue of authority vested in him by Executive Order No. 9337 of April 24, 1943, withdraw from all forms of appropriation the following described lands, and reserve such lands as a part of Naval Petroluem Reserve No. 1 for the exclusive use of the United States Navy: MOUNT DIABLO BASE AND MERIDIAN, CALIF. T. 30 S., R. 22 E., sec. 10, E2; secs. 11, 12, 13, and 14, all; sec. 15, NE; sec. 23, E1⁄2; sec. 25, N2, SE1⁄44; sec. 26, NE. T. 30 S., R. 23 E., secs. 7, 8, and 9, all; sec. 31, N1⁄2. T. 31 S., R. 24 E., sec. 14, NNW; sec. 15, N2N2; sec. 16, N2N2; sec. 17, N2N2. Careful consideration of your request in the light of several letters received from private parties interested in the proposed enlargement of the reserve impels the conclusions hereinafter discussed. First, a public hearing should be held to afford all interested parties a full opportunity to express their views as to the propriety of the proposed enlargement of the reserve. It is the policy of this Department to give public notice of all proposed withdrawals of public land where the withdrawal is at the instance of a bureau of this Department and thereafter to hold a public hearing when the nature of the objections are such as to warrant it. This procedure is also being followed where the request for a withdrawal of public lands emanates from another Department and the circumstances are such as to warrant it. Inasmuch as Commodore Greenman stated at a meeting between representatives of the Office of the Director, Naval Petroleum Reserves, and the Geological Survey, that he favored a hearing, I assume that this procedure is satisfactory to your Department. Second, it is our opinion that the proposed enlargement of the reserve, if and when a final decision is reached thereon, should be accomplished by an Executive order of the President rather than pursuant to the authority vested in the Secretary of the Interior by Executive Order No. 9337. This seems advisable in view of the provisions of the act of June 17, 1944 (58 Stat. 280, 34 U. S. C., Supp. V, sec. 524), which makes certain specific operations and programs within the naval petroleum reserves subject to the approval of the President, and also to obviate any doubt as to the authority of the Secretary of the Interior under Executive Order No. 9337 to extend the exterior boundaries of Naval Petroleum Reserve No. 1 so as to effectively include therein for the purpose of the act of June 17, 1944, the privately owned and public lands. Aside from this, the evident controversial aspects of the proposed enlargement as between the Navy Department and the private parties interested therein make it desirable that the President, whose approval of specific programs and operations in the naval petroleum reserves is required by the act of June 17, 1944, should make the final decision as to the propriety of the proposed enlargement of Naval Petroleum Reserve No. 1. Following the hearing, therefore, this Department will make such recommendation to the President as may then be appropriate. Finally, with respect to the present restrictions governing the issuance of oil and gas leases within 1 mile of all naval petroleum reserves, it is understood such restrictions will be removed entirely if and when the proposed enlargement of Reserve No. 1 becomes effective, as agreed upon in the meeting between _representatives of the Office of the Director, Naval Petroleum Reserves, and the Gological Survey. There is no objection in principle to the Navy reserving the right to request the reimposition of the 1-mile restriction as to Naval Petroleum Reserve No. 1 in any direction deemed necessary as a result of the proposed exploratory program, except as hereinafter qualified. In view of the procedure prescribed in section 3 of the act of August 8, 1946 (60 Stat. 950), to protect holders of leases in areas withdrawn from leasing, the 1-mile restriction could be reimposed only in conformity with such procedure. It would seem preferable, |