DOE NEWS
FOR IMMEDIATE RELEASE
February 10, 1996
NEWS MEDIA CONTACT:
Bill Wicker, 202/586-5827
Statement by Hazel R. O'Leary
Secretary, U.S. Department of Energy
Presidential Action to Get Government
Out of Commercial Oil Business
"President Clinton today once again demonstrated his commitment to 'common sense government' by signing legislation that will get the federal government out of the business of producing oil and natural gas at the Elk Hills Naval Petroleum Reserve near Bakersfield, Calif. This completes the process the President began last year when he proposed selling Elk Hills, and it paves the way for the government to earn more money from the other naval petroleum reserves.
"This Administration believes it is in the public interest to remove the federal government from non-federal activities. By signing into law the National Defense Authorization Act for FY96, the President has further delivered on his promises to balance the budget, reinvent government and provide for the financial security of retirees.
"While Elk Hills is a valuable asset, it is an asset that is best put into private hands. It is no longer being held by the Navy as a fuel reserve and has been in commercial production since Congress authorized its development in 1976. (Our nation's emergency oil supplies are held in the Strategic Petroleum Reserve.) Elk Hills has been operated by the federal government in competition with private companies. The government's ability to operate the reserve like a commercial business is severely limited by procurement, budgeting and other requirements of a Federal agency.
"This legislation safeguards the public's interest in divesting this property and ensures that American taxpayers receive maximum value for their investment. It authorizes the Administration to carry out a competitive sales process to ensure receipt of the full value of the reserve, and it allows adequate time for prospective purchasers to examine relevant data and assess the value of the field.
"Furthermore, President Clinton is pleased that Congress included a provision in the legislation similar to what he sent to Congress in May, one that addresses a long-standing school lands dispute between the Federal government and the State of California. Using the Congressional Budget Office estimates of a $1.5 billion sales price for Elk Hills, up to $135 million (9 percent of the net proceeds from the sale) could be available for retired public school teachers in California. Also, by selling Elk Hills, the Administration will release to the private sector an asset that will generate an estimated $20 million annually in additional property tax revenues for local governments, schools, parks and the State of California. This reflects the vision of the President concerning the proper roles of the federal government, state government and private industry."
- DOE -
|