DOE NEWS

FOR IMMEDIATE RELEASE
February 10, 1996

Clinton Administration Delivery on Promise
To Retired California Teachers
Could Boost Pension Checks

By signing the Defense Authorization Act for FY96, President Clinton set into motion the sale of the Elk Hills Naval Petroleum Reserve near Bakersfield, Calif. This action will get the Federal government out of the business of producing oil and natural gas at Elk Hills and pave the way for the government to earn more money from other Naval petroleum reserves.

"This Administration believes it is in the public interest to remove the Federal government from non-Federal activities," Secretary of Energy Hazel R. O'Leary noted. "Privatizing Elk Hills is part of the Department of Energy's strategic realignment, and it mirrors President Clinton's vision of the proper roles of the Federal government, state government and private industry."

As part of the Energy Department's downsizing effort and the President's commitment to "common sense government" that works better and costs less, the Administration last May submitted to Congress legislation calling for the sale of Elk Hills.

Enactment of the bill is one more action that delivers on the Administration's pledge to help balance the Federal budget, support education and provide for the financial security of retirees. It also enables the State of California to pursue claims on behalf of its retired public school teachers.

California has a long-standing dispute with the Federal government over certain "school lands" within the Elk Hills Reserve. A provision in the legislation signed today provides an avenue fo the state to address its claims by setting aside up to 9 percent of the net proceeds from the sale to benefit the Teacher Retirement System. Using Congressional Budget Office estimates of a $1.5 billion sales price for Elk Hills, up to $135 million could be available for retired public school teachers in California.

The story of how the California State Teachers' Retirement Fund wound up with an interest in the mineral-rich Elk Hills land begins with statehood in 1853. To encourage California to join the Union, the United States handed over parcels of land to be used to support education in the state.

At the time, no one could have known that part of that land would later become Elk Hills Naval Petroleum Reserve, set aside for decades as a guarantee that the nation would always be able to fuel its fleet around the world. The reserve is no longer needed by the Navy as a fuel reserve and has been in commercial production since Congress authorized its development in 1976. (The nation's emergency oil supplies are now held in the Strategic Petroleum Reserve.)

-DOE-