Status of Strategic Petroleum Reserve Activities as of June 30, 1985

In response to a congressional request, GAO reported on the Department of Energy's (DOE) progress in filling the Strategic Petroleum Reserve (SPR) and compliance with legislative requirements during the third quarter of fiscal year (FY) 1985.

GAO found that, during the quarter, Congress renewed portions of the Energy Policy and Conservation Act, extending the legislative authority for the SPR through June 30, 1989, and DOE is required to carry out a drawdown test sale and distribution of 1.1 million barrels of oil within 6 months of the bill's enactment. GAO found that there was no change in SPR minimum oil fill requirements; therefore, future sales of Naval Petroleum Reserve oil could be restricted to SPR sales. Congress has begun considering options on SPR oil fill and construction activities for FY 1986 and subsequent years, including options which ranged from an indefinite moratorium on SPR construction and oil fill to continued construction and fill but at lower fill rates. GAO found that, during the quarter, DOE: (1) added 15 million barrels of oil, bringing the total amount of oil in the SPR to 476.6 barrels, an average fill rate of 164,000 barrels per day; (2) paid $331 million for oil acquisition and transportation; (3) had unpaid obligations of about $522 million; and (4) had $827 million in deferred funds, leaving a balance of about $1 million in unobligated funds available for oil purchases in FY 1985. The storage capacity development program proceeded without any major problems; however, a construction contract was modified. Finally, information was presented on allegations of SPR mismanagement, contract extensions, and a new contract.