there now. Senator Anderson when he was here, commented several times about the old refinery at Katalla. Actually, the production from the Katalla field in toto has been about 155,000 barrels of oil, which is a very small drop in a very big bucket. Senator CORDON. But it proves there is oil there, does it not? Dr. REED. There is no question about that. Senator CORDON. Or at least there were 155,000 barrels. Dr. REED. There is no question at all about the presence of oil in those rocks. For your information, the situation briefly in the Katalla-Yakataga area is this: We do have petroliferous rocks. You have oil seepages at a number of places in the area. You do have rocks of sufficient porosity and rocks of sufficient permeability to carry oil to accumulating areas where it might accumulate in oil pools. The thing that we do not know is whether the conditions are such that you can get traps that would form the oil pools. It is thought that those accumulations are likely. It would seem to me that the possibility of development eventually in an area such as the KatallaYakataga would be better than average, considering wildcat areas in general. If such a find is made, it is in a very strategic locality. I point out it is on the Pacific border, and almost on the great-circle route between North America and the Orient. It would be a fine place to find a major oilfield. Senator KUCHEL. Can you give us any indication of how much of the potential oil-bearing land is in petroleum reserves? Dr. REED. Yes, I could make a guess. Naval Petroleum Reserve No. 4 is so large, it is about half of the potential petroliferous area of Northern Alaska alone, and the rest of Alaska might add up to another 25 percent. The area within Naval Petroleum Reserve No. 4, which is all there is reserved for that purpose, would be maybe 30 percent of the area. Senator KUCHEL. Is under reserve? Dr. REED. Yes; would be covered by Naval Petroleum Reserve No. 4, specifically. Senator CORDON. Thirty percent of the known possible oil area? Is that what you mean? Dr. REED. Let's say not more than 30 percent, 30 percent or less. That is a guess, an off-the-cuff figure. I would not want to be held to that. Senator CORDON. I have a note here that Naval Petroleum Reserve No. 4 covers about 28 million acres, and that Public Land Order No. 82, which is a reservation order, covers about 49 million acres, all north of the Brooks Range, and that the naval reserve is entirely within that public land order. So the total area north of the range which is reserved would be about 49 million acres. Senator SMATHERS. That means that in that reserve, no individual company or individual can go in there; that the Navy must give them authority to go in? Dr. REED. That is within the pink area, sir; and within the gray area the same is true, but not because of the Navy. Senator CORDON. The reservation there is absolute. Dr. REED. Yes. Senator SMATHERS. Are there any other reservations down on the southern coast, we will say, running from the Aleutian Island chain to the southeastern part of Alaska? Are there any reservations of oil there? Dr. REED. No, sir; but there is no possibility of an oil accumulation from the Katalla-Yakataga area southeast, at least no likely possibility. It would be very unusual. There is a very definite geologic reason why that is a potential area. We have known that for many years. Senator SMATHERS. What is a potential area? Dr. REED. The Katalla-Yakataga coast going about 50 miles inland. area, that particular stretch of Senator KUCHEL. Has any development taken place of any of the lands in the Naval Petroleum Reserve? Dr. REED. Yes, sir. Starting in 1944, the Navy has carried on an exploration program in Naval Petroleum Reserve No. 4 and outside in the area covered by the gray. It has been a very extensive, large-scale oil-exploration project. Senator KUCHEL. Has there been any production as a result of that? Dr. REED. No production was attempted. The idea was to explore the possibilities of the area, and the only production has been a few thousand barrels for pumping test purposes and use of some of the gas to run the camp at Barrow. That about runs over these things, except a few of the metals, such as quicksilver, antimony, and chromite, which were talked about. Perhaps the committee has some questions they would like to ask. Senator CORDON. I would like to read into the record, subject to correction if it needs correction, this statement: In the event that these oil and gas reserve orders were revoked, those deposits would become subject to lease under the provisions of the Mineral Leasing Act of 1920, as amended and supplemented, and the Regulations, 43 CFR, part 192, upon the terms prescribed therein. By Public Law 190 enacted August 5, 1953, the provisions of the 1920 Mineral Leasing Act were extended to include reserved Territorial school lands. What can you tell me about the reserved Territorial school lands, Mr. Slaughter? Mr. SLAUGHTER. A number of years ago, apparently in contemplation of the possibility that Congress might extend these schoolland-section grants to Alaska, Congress reserved throughout the whole of Alaska 2 sections of each township, and also in the central area a third section specifically for the University of Alaska, the other 2 sections being for common schools. Those are a reservation, not a grant. The Territory has no title. They are reserved, however, and therefore cannot be taken up by homesteaders or other use. A number of problems have arisen over the years in connection with the mineral development of those lands. The law that you just mentioned provides that the mineral leasing law applies, but if a lease is made under the mineral leasing law on those reserved lands, the income will go to the Territorial school fund. Senator CORDON. When you speak of a reservation of two sections out of each township, I have to assume there is a township from which the reservation can be made. Mr. SLAUGHTER. That is correct. Senator CORDON. That raises the question how much of the area where the reservations would be located has been surveyed so that reserved sections could be identified. Mr. SLAUGHTER. Only a very small part. Senator CORDON. What kind of a problem is raised, then, with respect to the nonsurveyed areas where the reserved sections might conceivably be located with respect to which their identity is impossible now? Mr. SLAUGHTER. With respect to the nonsurveyed areas, the land is subject to disposition in accordance with applicable law, and if a disposition were to be made prior to the survey and then the survey came along and identified a particular area as having been disposed of as being a school section, then there would be new selection rights. Senator CORDON. So the reservation is in substance a reservation of lands unappropriated at the time, and can be identified? Mr. SLAUGHTER. That is right. Senator CORDON. Then there is no problem. Doctor, the Delegate suggests to me that the Navy moved out from its exploration last year. Can you advise the committee as to whether or not that removal from work was because the exploration had indicated no values? Dr. REED. The exploration that the Navy carried on for 9 years has demonstrated very substantial value in Naval Petroleum Reserve No. 4; or let me recast that and say, has revealed substantial quantities of oil and gas within and near Naval Petroleum Reserve No. 4. To convert that into value presupposes that it can be gotten out at a profit. That has not yet been determined. There was found in that exploration program one moderate-sized oil field called the Umiat field in the southeast part of Naval Petroleum Reserve No. 4. The consensus of the quantity of oil in that field is somewhere between 50 and 75 million barrels of oil. The Navy found also a large geologic structure, an immense geologic structure more than 50 miles long, called the Gubik anticline, that is known to contain a tremendous quantity of gas. That particular structure is partly within and partly outside of Naval Petroleum Reserve No. 4. So far as is known, there is no oil in that structure. It is all gas. The quantity is very large. We can't even measure it. We don't have enough data to measure it. Senator CORDON. Is this information the general public has? Dr. REED. Yes. This is all unclassified information, and has appeared in the press from time to time. Other smaller oilfields have been found, but primarily structures have been found, knowledge has been gained as to detailed geology and conditions that would lead informed petroleum engineers and geologists to believe that the Umiat and the Gubik structures are only examples of what is likely, both within and outside the reserve. Senator CORDON. I have been handed a copy of a letter dated November 30, 1953, addresed to the chairman of the committee and signed by M. V. Carson, Jr., commander, United States Navy, Director of Naval Petroleum Reserves, on this subject matter, and that letter will be made a part of the record at this time, without objection. It goes into detail in the very matter you were discussing. (The letter referred to follows:) Hon. HUGH BUTLER, DEPARTMENT OF THE NAVY, NAVAL PETROLEUM RESERVES, Denver 2, Colo., November 30, 1953. Chairman, Committee on Interior and Insular Affairs, United States Senate, Washington 25, D. C. MY DEAR MR. CHAIRMAN: Your letter of November 17, 1953, addressed to the Secretary of the Navy has been referred to me for reply inasmuch as it pertains to Naval Petroleum Reserve No. 4 in Alaska. No summary report of the Navy's oil exploration in this reserve has been made as yet but a complete report on all phases of the work, including the results of the exploration program, is now in preparation and will be published when finished. However, it is my pleasure to give you a summary of our findings and conclusions. Prior to the suspension of operations in 1953, the Navy caused to be drilled in the reserve and on lands adjacent thereto 36 test wells (totaling 135,377 feet) and 44 core holes (totaling 33,873 feet) involving in all, 169,250 feet of hole. In addition to this drilling, the reserve was completely mapped by aerial photography and completely covered by the airborne magnetometer. Approximately 90 percent of the workable area within the reserve proper was covered by surface geological exploration. Considerable gravimeter and seismograph work has also been accomplished. The exploratory program has disclosed deposits of oil in three separate localities within the reserve, namely, at Umiat, Simpson, and Fish Creek. At Umiat, 7 of the 11 wells drilled indicated oil production ranging from 25 barrels daily in well No. 3 to more than 350 barrels daily in well No. 5. In addition, well No. 8 indicated a potential gas production in excess of 5 million cubic feet daily. At Simpson, two of the core holes drilled had production, core holes No. 26 and 31, each producing 19° gravity oil at a rate of 130 barrels daily. At Fish Creek, a small quantity of 14° gravity oil was produced. The oil found at Umiat was in excess of 35° API gravity with good refining qualities for diesel oil and jet fuel. This oil is susceptible of transportation by pipeline while that at Fish Creek and Simpson is of too low gravity to transport at temperatures existing in Arctic Alaska during the greater part of the year. Various estimates have been made of the possible recoverable oil reserves in the Umiat structure, varying from 18,000,000-37,600,000 barrels by DeGolyer and MacNaughton, to a high of 103,000,000 barrels by Arctic Contractors. The lack of extended production history and other factors make closer estimates impractical at this time. None of the wells at Umiat were capable of flowing since there was little or no entrained gas in the oil, and those wells that did produce were produced by pumps. While the Umiat field alone cannot be considered commercial due to its remote location and relatively small reserves, the discovery of that field has proven that high gravity oil exists in the Reserve, and which oil, is found elsewhere under better producing conditions and in larger quantities, would be of great commercial significance. Natural gas (dry gas) was indicated in several of the structures tested in the Reserve at Barrow, Gubic, Umiat, Wolf Creek, Oumalik, Meade and Square Lake. Although gas may be producible from all of these structures, and possibly from others, only the Barrow field has been actually produced. Here gas was produced for use as fuel at the Barrow camp from April 1949 until the closing of the camp in October 1953. At the present time, only two wells are capable of production, Barrow No. 4 and Umiat No. 8. However the largest reserves of gas probably exist at Gubic, east of the Umiat field, where the reserves are estimated at 300 billion cubic feet. Although it cannot be said that either oil or gas has been found in commercial quantities in the Reserve, the presence of both has been proven and it is possible that gas in commercial quantities could be developed on the basis of present exploration if a market for it existed in southern Alaska sufficient to warrant the development of the gas fields and the construction of a pipeline to points of consumption. In concluding this brief summary of the results of the Navy's exploration program in northern Alaska, it should be emphasized that while no really large commercial deposits of oil and gas have been found in the Reserve their presence has not been disproven as a large portion of the Reserve remains to be tested. The exploratory program so far has eliminated from further consideration a portion of the Reserve where results have indicated that oil in large quantities will probably not be found at drillable depths, but the remaining areas have most certainly not been condemned as unfavorable. If the above information is not sufficient for your present needs, please feel free to call on me for any further data you may desire. Sincerely yours, M. V. CARSON, Jr., Commander, United States Navy, Director, Naval Petroleum Reserves. Delegate BARTLETT. May I ask one question on that point, because I think it is rather important. Senator CORDON. Surely. Delegate BARTLETT. Dr. Reed, I had heard that if the Navy had continued its drilling instead of suspending its operations in the autumn of 1953, that it then would have gone into deeper structures and many geologists believe that the opportunity to find really sizable deposits would be better there than in the exploration work already done. Does that have any merit? Dr. REED. Yes. Your statement is a little one-sided, perhaps, but it has a great deal of merit. What you said is just about 95 percent right. This program had to start from Point Barrow because that was the place you could get in ships and where you had an airfield. As the program has gone on, the work has moved farther and farther afield, but more and more information on the whole environment has been gained, and the next steps that would have been undertaken would have been the testing of some of the older rocks, the Lisburne limestone, which crops out near the north flank of the Brooks Range all the way around the reserve. That is the inland area. It is the farthest distance from Barrow. In general, those are the deepest rocks throughout most of the reserve. To get them near the surface you have to go farther south. I think it is safe to say it is felt by the numbers of experts who have been involved in this business feel that the possibilities probably are greater back there than they were where the work has gone on to date. There has been no testing, however, of those rocks in that area because the program did stop. Senator SMATHERS. Is it classified information as to how deep the Navy has gone? Dr. REED. No. Such information was classified for a considerable time. I believe it is now completely declassified. Senator SMATHERS. How deep have they been drilling in that petroleum area No. 4? Dr. REED. One deep hole. Let me make it very plain, because people get the wrong impression. This particular hole was drilled not for oil but for information. The oil would have been fine if it happened to be found. It is about 12,000 feet deep. That is the Topagoruk well, about halfway between Barrow and Umiat, just about the middle of the pink area. Senator CORDON. We are reaching the time when we have to quit. Is there any other question? Could you give us a short statement on the other minerals for the record, Doctor, to save your coming back? Dr. REED. Yes; I can very easily do that. |