Status of Strategic Petroleum Reserve Activities--September 1981

Gao ID: EMD-82-7 October 2, 1981

In response to congressional requests, GAO reported on the status of the Administration's activities to implement the Energy Security Act. The act requires the President to fill the Strategic Petroleum Reserve (SPR) at an average rate of at least 100,000 barrels per day for fiscal year 1981 and each succeeding fiscal year. GAO reviewed Department of Energy (DOE) and Defense Fuel Supply Center (DFSC) program documents and publications and studies related to the program.

Since the most recent GAO status report, two major events occurred: (1) DFSC awarded contracts for an additional 12 million barrels of oil to be delivered to the SPR during October 1981; and (2) DOE received its first shipment of Mexican oil under the contract with Mexico's State oil company. As of September 21, 1981, DOE estimated that there were 195 million barrels of oil in SPR storage. By the end of fiscal year 1981, there should be 202 million barrels of oil in SPR storage. Applicable legislation requires the Administration to seek to fill the SPR at an annual daily rate of 300,000 barrels per day until the SPR inventory reaches 750 million barrels. With the new contracts that the government anticipates awarding in the next fiscal year, this fill rate is conceivable. However, there is not sufficient storage capacity available if the fill rate is achieved. GAO has addressed this storage problem in previous status reports and made recommendations to DOE. DOE is revising its plans for expanding SPR underground storage capacity. GAO plans to discuss this issue further in its January 1982 comprehensive report on SPR fill activities.

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