Teapot Dome was a region of oil-rich land in Wyoming. In 1909, a presidential order set aside this land, along with oil-rich lands in Elk Hills and Buena Vista, California, for potential use by the U.S. Navy. Meanwhile private companies refined oil near each of these three regions, and federal officials became concerned that these companies may start siphoning oil from the government lands.
As a result, Congress authorized the Secretary of the Navy to administer the lands in Teapot Dome, Elk Hills and Buena Vista as he saw fit. There were two viable options: 1) Drill offset wells on the land boundaries to minimize siphoning, or 2) Lease the land to the companies for drilling if they promised to set aside sufficient oil for the Navy in case of emergency. The Secretary of the Navy chose the first option.
The Harding Administration Takes Over
In 1921, the Wilson administration became the Harding administration, and newly appointed Secretary of the Interior Albert B. Fall persuaded President Warren Harding that the second option would be better. Furthermore, Fall convinced Harding to transfer authority over the lands from the Navy Department to the Interior Department. Thus Fall was now in charge of the oil reserves.
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