Oil Reserve

Pursuant to a congressional request, GAO discussed the Department of Energy's (DOE) progress in developing, operating, and filling the Strategic Petroleum Reserve (SPR) as of September 30, 1986.

GAO found that: (1) the funds in the oil account for fiscal year (FY) 1987 provide for a purchase level of 35,000 barrels of crude oil per day at an estimated cost of $16.45 per barrel; (2) in August 1986, DOE issued a notice of intent to acquire up to 35,000 barrels per day of domestically produced crude oil for 1 year starting in FY 1987; (3) beginning on October 1, 1986, DOE planned to acquire 8,000 barrels of oil per day from the Naval Petroleum Reserve and transfer it by pipeline from California to a Louisiana SPR storage site; and (4) DOE has not decided whether to acquire additional crude oil from a Mexican supplier beyond October 31, 1986. GAO also found that: (1) as of September 30, 1986, the SPR inventory totalled 506.4 million barrels; (2) personnel at the Bryan Mound site are continuing oil distribution enhancement and cavern improvement activities; and (3) in August 1986, DOE awarded a contract for surface facility construction to make the Big Hill site fully operational.