Status of Strategic Petroleum Reserve Activities--April 1981

Gao ID: EMD-81-85 May 4, 1981

The fifth in a series of status reports on the Strategic Petroleum Reserve (SPR) requested by Congress is based on the GAO review of the Department of Energy (DOE) and the Defense Fuel Supply Center (DFSC) program documents and publications and studies related to the program.

The fifth round of contracts by the DOE oil purchasing agent has been completed under the January 1981 open continuous solicitation. DFSC has contracted for about 39 million barrels of oil to be delivered to SPR during this fiscal year. These contracts bring the total oil acquired for SPR for fiscal year 1981 to about 75 million barrels. As of April 20, 1981, about 130 million barrels of oil were stored in caverns and other SPR facilities. DOE has transferred the remaining unobligated SPR oil funds to DFSC. On April 24, 1981, SPR oil purchase was suspended for 30 days, so that DOE could take advantage of the expected decline in market prices of the types of crude oil offered to SPR. DOE recently revised its schedule for the Sulpher Mines storage facility. The facility will be brought on line in phases, with 11.5 million barrels of capacity becoming available during July and another 13.1 million barrels becoming available during August 1981. A potential storage capacity problem has emerged at the DOE Weeks Island salt mine. Pressure building up from gases in the mine now limits the amount of oil that can be stored. DOE officials believe that they can provide a temporary solution to the pressure buildup in putting a temporary flaring system in place by May 15, 1981. However, if this cannot be done before the 20 million barrel level is reached, the gases will be vented before allowing the pressure to build up and damage the mine's seals.

The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.