Questionable Suitability of Certain Salt Caverns and Mines for the Strategic Petroleum Reserve

The Energy Policy and Conservation Act requires the Department of Energy (DOE) to create a strategic petroleum reserve to protect against disruptions in energy supplies. DOE plans to store 1 billion barrels of crude oil in salt caverns and mines by December 1985. Although DOE has not yet estimated the cost to store 1 billion barrels, it did estimate the cost to store 750 million barrels at $14.4 billion.

Of the 19 existing salt caverns that DOE acquired, 6 may not be suitable for long-term storage because they do not meet structural design standards for oil storage suitability. Three of the 6 caverns have already been certified for storage, but the other three failed to pass tests. Alternatives to the continued use of these caverns if they are found to be unsuitable are: (1) abandoning the unsuitable caverns and using additional cavern storage capacity developed during withdrawal, or (2) using salt water to displace oil during withdrawal so no additional growth can take place. If these alternatives do not work, DOE may have to resort to acquiring other existing caverns or building new ones. The salt mine acquired by DOE may not be suitable for long-term crude oil storage because of safety problems and the resulting potential legal and financial ramifications. Cost estimates for acquisition, construction, and operation of reserve storage facilities have not been adequately documented.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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