By: Mary Mostert, Analyst, Original Sources (www.originalsources.com)
September 28, 2000
Early this morning I was Mark Edward's guest on Take Back Our Country on KDWN in Las Vegas, NV to talk about my recent article that outlined the incredibly cozy relationship between Al Gore and Occidental Petroleum. During the show I was reading from a presentation made September 6, 2000 by Occidental's president, Dr. Dale Laurance at a CEO energy conference in which he reported the incredible profits from the company's acquisition of the Elk Hills Naval Petroleum Reserves in 1998.
While I was on the air, a caller challenged me to explain why the Republican Congress wasn't just as guilty as Al Gore in selling the Reserve to Gore's friends at Occidental Petroleum. That prompted me to search for the authorization of Congress that Charles Lewis from the Center of Public Integrity and author of The Buying of the President 2000, said had been voted on. He also said that there was competitive bidding and 22 bids were received. So far, I have found no evidence of a bill passed by Congress authorizing the sale, although one was introduced. It never got out of committee.
However, Laurance reported that Occidental DID acquire Elk Hills:
"With the recent acquisition of Altura, we are now the largest oil producer in the state of Texas. The Altura properties complement our other holdings in the Permian Basin, which have been consolidated as Oxy Permian."In California we have assembled a large portfolio of exploration and production acreage since our acquisition of Elk Hills in 1998."
Two years ago Occidental acquired the proven oil reserve at Elk Hills in California for a mere $3.67 billion, which is about $78,085 an acre. That's an incredibly low price for proven oil wells. The transaction, made as part of what we've been told was one of Gore's "reinventing government" plans, sold the oil land to a very old and dear friend of Al Gore's, and a company in which he owns a large amount of stock. In fact, in 1992 the value of stock owned by Al Gore's family in Occidental Petroleum Stock was listed at $680,000.
On January 26, 1996, Senator Dale Bumpers of Arkansas introduced a bill, HR 1530, to create a Government corporation to own and operate the Naval Petroleum Reserves, and Naval Oil Shale Reserves and prepare for the privatization of the Elk Hills Naval Petroleum reserve. The bill did not get out of Committee.
On March 5, 1996, an executive communication to the House of Representatives, stated:
"2175. A letter from the Secretary of Energy, transmitting notification of the Department's intention to contract the sale of Naval Petroleum Reserve Numbered 1, also known as the Elk Hills Reserve without providing for the use of competitive procedures; to the Committee on National SecuritySo far, that was the only reference to the actual procedures of the sale that I have been able to find in Congressional records. The Environmental Impact study required by law before the transaction, was written by ICF Kaiser International, which had, on its board of director's, Al Gore's campaign manager, Tony Coelho.
In June Al Gore brought up the fact that oil companies were making quite a bit of money and linked George W. Bush to the problem of higher gas prices, accusing him of "being a good friend to oil and gas companies," because oil companies, especially small, independent oil producers, contributed to Bush's campaign. Somehow, the people were encouraged to believe, that made Bush responsible for the increase in gas prices at the pump. Gore called for an "investigation."
While the "investigation" never actually amounted to anything, my own investigation has certain uncovered some interesting facts, which Mark Edwards' listeners found fascinating.
It seems that Occidental Petroleum, which is the largest oil producer in Texas, not the small independents that George W. Bush has worked with, has gone from a profit of $36 million in the fourth quarter of 1998 when they purchased Elk Hills, the largest transfer of public property to a private company in US history, to $557 million in the second quarter of 2000. The profit increase for Occidental Petroleum from that helpful little bit of "reinventing government" was 1547% in 6 quarters, or 18 months.
Laurance reported this month that:
"Elk Hills is a major acquisition which we completed in early 1998. By the end of this year we expect cumulative free cash flow, after accounting for capital expenditures, to rise to an estimated $1.2 billion - at current strip prices."Other areas of interest, where Occidental Petroleum has acquired or is poised to acquire oil and natural gas wells, include Colombia, Indonesia and Libya. Of the Indonesian property Laurance said,
"Another example of a transitional asset is the giant Tangguh gas project in Indonesia, which has the potential to become a core asset. This is the premier natural gas project in Asia. The project is supported by 14.5 trillion cubic feet of proved reserves. Oxy's share is 2.3 trillion cubic feet. These reserve additions will more than double Oxy's worldwide gas reserves to 4.2 trillion cubic feet."In June, ABC reported:
June 19 - "Citing evidence of rapidly rising profits, Vice President and presidential candidate Al Gore said big oil companies should be more aggressively investigated for price gouging and colluding, as gas prices are hitting record highs across the country." 'I think its time for a much broader investigation,' Gore told ABCNEWS in an interview today.
" 'I just learned that soon the figures will be announced that the big oil companies' profits have gone up 500 percent in the first part of this year, just at the time when these prices are going sky high in the Midwest. I think that justifies a much broader investigation into possible collusion, price gouging and antitrust violations,' he said.
"Gore's comments come as U.S. motorists are fuming over having to pay more than $2 per gallon, roughly double what it was a year ago."
The media, of course, didn't think to investigate Al Gore and his ties with Occidental Petroleum. Occidental Petroleum profits went from $65 million in March of 1999 when the Clinton-Gore administration began bombing Yugoslavia to $557 million in July 1999.
The caller on the Mark Edwards show asked me if the Republicans weren't just as "guilty" as Al Gore, since they approved the huge military bill that Charles Lewis said enabled Occidental to purchase the Elk Hill Naval Petroleum Reserve.
The answer to that is "no." First, so far I haven't been able to find any bill voted on by members of Congress that authorized the sale of Elk Hill Naval Petroleum Reserve. The bill introduced by Dale Bumpers in January 1996 never passed. The huge defense appropriations bill H.R.3230 which was introduced April 1996 by Rep. Spence has no provision for the sale of Elk Hill oil rights and property. . It's only provision allows for the sale of the OIL from Elk Hill at 90% of the world market price.
The only authorization I can find for the sale of the entire facility came from the Executive branch - not Congress. The Clinton-Gore Administration appears to have merely INFORMED Congress, and those messages are read usually when there's rarely more than a half-dozen members present, not ASKED congress. Whatever transpired, there was no debate in Congress on the subject and no approval BY Congress for the sale to Occidental that I can find. Apparently it was done entirely within the Executive Branch, just as was the case in the 1920s in the Teapot Dome scandal.
So, what we have is the largest transfer of public land to a private party in the history of the United States taking place at the same time the same administration has seized huge amounts of land for "memorials" - some of which was land with valuable minerals and oil shale on them.
There was no member of Congress, with the possible exception of Sen. Dale Bumpers, who seemed to be within the circle of those making the deal. Republican members of congress did not own large amounts of Occidental Stock and, besides, I can find no record of a vote on the subject of the transfer of Elk Hills to Al Gore's friends at Occidental.
Perhaps during the debate next week a couple of questions on this could be asked Al Gore on this subject. Like, "Mr. Gore, you and your family have had a long association with Occidental Petroleum, since your father was a member of its board of directors. Could you tell us exactly who authorized the sale of the Elk Hills Naval Petroleum reserve's 47,000 acres to Occidental for only $3.67 billion?
To comment: mmostert@originalsources.com
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