With Wyoming’s agricultural industry struggling after the World War 1, State Geologist
Alert Barlett believed that the mineral industry was more important to the state’s
economy. Farmers, ranchers and bankers in small towns were hit hard in the statewide
agricultural depression and needed a way to support themselves and build the economy
in Wyoming. In the 1920’s the demand for oil remained high as the demand for gasoline-burning
vehicles grew. The Salt Creek Oil Field in Natrona County was booming, reaching peak
production of 3.5 million barrels in 1923.
The Mineral Leasing Act of 1920 contributed enormously to the growing Wyoming economy
and tot eh wealth and revenues of the state government. The 1920 law divided the legal
status of oil, natural gas, coal and phosphates from hard rock minerals such as gold
and silver, establishing a new leasing system that has lasted until present day. The
revenues from producing the minerals goes back to the company with the government
being paid a 1/8th royalty on the revenue. From this 1/8 royalty, the government puts
half of the revenues back into the states from which the mineral was extracted. Wyoming
thrived as it is home to massive oil and gas reservoirs and coalmines.