More Assurance Is Needed That Strategic Petroleum Reserve Oil Can Be Withdrawn as Designed

Pursuant to a congressional request, GAO conducted a review to determine whether the Department of Energy (DOE) will be able to withdraw Strategic Petroleum Reserve (SPR) oil at the designed rate and sustain that rate over time. DOE has been implementing a three-phase plan to develop a 750-million barrel SPR at six sites in Louisiana and Texas, of which 483.5 million barrels were in storage.

GAO found that DOE is continuing to develop additional storage capacity at three of the sites and is using a process known as leaching to remove salt deposits at another site. While SPR was designed so that oil could be withdrawn at any time, DOE has established specific withdrawal rates to be achieved at the completion of each phase. Operational and technical problems exist in pipelines and pumping equipment that may affect the ability to achieve the designed drawdown rate and, although marine growth and debris have reduced the amount of water available to force oil out of storage, DOE has not determined the impact. DOE contractor reports state that there is a high degree of corrosion in one major oil pipeline and uncertainty about the quality of some of the buried pipe's ability to hold up under the pressure required for drawdown. DOE has been aware of maintenance, support, and repair problems, but has been slow in initiating corrective actions. DOE used a computer model to simulate SPR capabilities for an extended drawdown; however, because of the operational problems and delays in corrective actions, GAO believes that reliance on the computer, which assumes ideal operating conditions, is questionable. Although tests showed that oil could be withdrawn from the sites, the test duration was not long enough to adequately assess equipment reliability.

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.

Director: Victor S. Rezendes Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 512-6082