Energy Policy

This report discusses several near- and long-term options for improving the readiness of and expanding the Strategic Petroleum Reserve. Resolving problems affecting the Reserve's readiness, such as the buildup of geothermal heat and gas in stored crude oil, and replacing equipment at the end of its design life would overcome the significantly degraded ability of the Reserve to respond to oil disruptions. As a result, GAO ranked these options as high priorities. Continuing to fill the reserve to its current capacity of 750 million barrels or expanding the reserve to hold one billion barrels would both cost much more. Considering the limited potential benefits and the higher costs of filling or expanding the Reserve, GAO gave this option a relatively low priority. The benefits of increasing the Reserve's daily drawdown capability are less clear; however, implementing this option would increase the nation's ability to respond more flexibly to oil disruptions and would likely entail more moderate costs. GAO ranked this option as a medium priority.

GAO found that: (1) correcting the problems of heat and gas buildup should be a high priority, since heat and gas significantly impair SPR drawdown capability; (2) replacing aging facilities and equipment could avert future losses in SPR capability; (3) filling SPR to its current capacity or expanding SPR capacity would be costly; and (4) increasing the SPR daily drawdown capability could increase the nation's ability to replace disrupted crude oil supplies and dampen oil price increases and their impact on the economy.