Reagan Making Last Stab at Selling Naval Oil Reserve

President Reagan is making one last stab at selling off the Naval Petroleum Reserve, telling Congress to unload it or else.

After eight years of trying unsuccessfully to persuade Congress that the government should get out of the oil business, Reagan in his final budget this week tied the sale of the reserves to the Strategic Petroleum Reserve.

“He is telling Congress that if they don’t sell (the Naval Petroleum Reserve), they had better find the money somewhere else to fill up the SPR,” a congressional staffer said.

The Reagan proposal will be endorsed by President-elect Bush when he takes over later this month, Administration sources said.

The White House plan calls for the sale in fiscal year 1990 of the Naval Petroleum Reserves at Elk Hills, Calif., and Teapot Dome, Wyo., for a bonus payment of $1 billion. Under the proposed terms, the purchaser would be required to deliver 50,000 barrels per day for five years to the SPR salt domes along the Gulf Coast. Additionally, the buyer would also have to provide 10 million barrels of oil to a newly established Defense Petroleum Reserve.

If Congress balks at selling the Naval Reserves, so-called because they were established to keep Navy ships in fuel in emergencies, the SPR would be filled at a rate of only 22,000 barrels a day in fiscal 1990 under Reagan’s plan since the Energy Department would get only $127 million for this purpose.