Oil Reserve

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

GAO found that: (1) although the administration had planned no revisions to the moratorium-based 1987 SPR budget, DOE informally provided documentation on its revised 1986 and 1987 funding needs to Congress; (2) DOE estimated that for 1987, it would need appropriations of $108.6 million with no leaching, and $147.4 million if it resumed leaching; (3) as of June 30, 1986, DOE planned to stop oil fill at 503 million barrels; (4) DOE added 4.9 million barrels of crude oil to SPR, which brought the inventory level to 501.8 million barrels; (5) during the quarter, unpaid obligations totalled $63 million and unobligated funds available for oil purchases totalled $590 million; (6) after delays resulting from attempted deferrals and imposition of a moratorium on development, DOE resumed construction and oil distribution enhancement activities at two SPR sites; (7) various contracts for SPR operation and foreign oil purchases were nearing their expiration or option-renewal dates; (8) the first award-fee payment to an SPR management, operations, and maintenance contractor was based on an overall satisfactory performance rating; and (9) DOE had taken or planned various corrective actions for improving future SPR sales as a result of its assessment of oil drawdown and sale exercises.