Oil Reserve

In response to a congressional request, GAO reviewed the Department of Energy's (DOE) management and policies regarding the Strategic Petroleum Reserve (SPR) to determine: (1) its response to management and operations improvement recommendations; (2) the seriousness of pipeline erosion and corrosion problems; (3) possible damage to SPR oil from salt-tolerant bacterial contamination; (4) decommissioning plans for the Sulphur Mines, Louisiana, oil storage site; (5) SPR oil distribution and filling plans; and (6) the adequacy of the SPR security system.

GAO found that: (1) although DOE closed all 170 recommendations, it had not implemented 6 recommendations; (2) several SPR sites have pipeline failures caused by serious erosion and corrosion, which may indicate future problems at other SPR sites; (3) although the probability of bacterial contamination damaging SPR crude oil is low, DOE is testing for possible contamination; (4) although DOE plans to decommission the Sulphur Mines site, future capacity development and oil-fill decisions could delay the decommissioning and result in the loss of funds; (5) although the distribution enhancement program provides for matched drawdown and distribution at a rate of 3.57 million barrels per day, DOE has not finalized its current plans for achieving the initially planned 4.5-million-barrel-per-day rate; (6) the SPR oil-fill rate is legislatively established at the highest practicable fill rate achievable, subject to the availability of appropriated funds; (7) the DOE-proposed capacity development and fill rate could delay completion of the 750-million-barrel reserve and limit oil purchase flexibility and the option to close the Sulphur Mines site; (8) SPR site security requires greater dependence on state and local law enforcement and military forces for assistance, since its security forces contain intruders only until outside help arrives; and (9) DOE procedures for issuing, updating, and terminating security clearances need improvement.