Oil Reserve

In response to a congressional request, GAO presented its quarterly report on the Department of Energy's (DOE) progress in developing, operating, and filling the Strategic Petroleum Reserve (SPR) as of December 31, 1986.

GAO found that: (1) the SPR inventory totalled 511.6 million barrels of oil; (2) during the quarter, DOE added 5.2 million barrels of crude oil at an average rate of about 56,300 barrels per day; (3) DOE did not request additional appropriated funds for oil-fill acquisition, since existing unobligated fund balances were adequate; (4) the 1986 fiscal budget request proposed a fill rate of 35,000 barrels per day and would remove the requirement to discontinue oil sales from the Naval Petroleum Reserve if the SPR fill rate drops below 75,000 barrels per day; (5) DOE discontinued the purchase of Naval Petroleum Reserve oil on October 31, 1986, after it transferred 267,000 barrels of oil for storage in Louisiana; (6) construction and development of surface facilities at the Big Hill, Texas, site continued during the quarter; (7) DOE plans to close the Sulphur Mines, Louisiana, site until replacement storage space is available; (8) DOE signed agreements with two firms for the purchase of 27.35 million barrels of domestically produced oil; (9) as of December 31, 1986, the oil distribution pipeline from the Bryan Mound, Texas, SPR site to Texas City, Texas, was 70-percent complete, with other planned distribution enhancements in the development stage; and (10) DOE awarded the prime contractor for SPR management, operation, and maintenance 65 percent of the $2.6 million award fee available for the second 6-month period.