Comments on Proposed Moratorium on Development of Strategic Petroleum Reserve

GAO discussed issues related to a proposed moratorium on development of the Strategic Petroleum Reserve (SPR), focusing on costs and problems associated with closing down the SPR site at Big Hill, Texas. Under the proposed moratorium, the Department of Energy would indefinitely defer completion of storage facilities and oil fill at the Big Hill site at the end of fiscal year 1985. GAO stated that, while it would be technically feasible to stop further site development at Big Hill, problems to be resolved include: (1) maintenance of over $30 million worth of piping and equipment which could be subject to corrosion; (2) whether to maintain site equipment in place or to dismantle and store it; (3) whether to cancel a contract for electrical power for the site; (4) the adequacy of storage facilities at the site; (5) preservation of storage caverns and piping; (6) equipment warranty expiration dates; and (7) time limitations for performance under current construction permits that cover development of the site. GAO noted that, if the site is to be placed on standby by the end of the fiscal year, all decisions to be made regarding implementation of the moratorium are extremely time-critical.