Evaluation of the strategic petroleum reserve. A report prepared at the request of the Subcommittee on Energy and Power, Committee on Interstate and Foreign Commerce, United States House of Representatives, Ninety-Sixth Congress, Second Session, by the Congressional Budget Office

Book · Tue Jan 01 04:00:00 EST 1980

OSTI ID:6485852

This report was prepared by the Congressional Budget Office for the Subcommittee on Energy and Power to evaluate the potential effectiveness of the SPR in time of crude oil import shortfall. The report is quite specific in its conclusions. When a shortfall occurs, each barrel of crude oil in the Strategic Petroleum Reserve has the potential to prevent almost $200 in current dollars of GNP loss, along with the associated unemployment. Other Congressional sources now report that each point of unemployment above the expected base of 6.8% costs as much as $29 billion in lost revenues and higher unemployment compensation, food stamps and other costs. The cost of filling the reserve is estimated to be approximately $3 billion per year. The costs can be minimized in the long run by expediting the fill as soon as possible. Additionally, the Congressional Budget Office and other experts who testified before the Subcommittee indicate there is every likelihood that, during the period of dependence on imported oil, this country will again experience a substantial shortfall. Currently, the Department of Energy is not purchasing oil for the Strategic Petroleum Reserve and has not done so since the start of the Iranian crisis. Early in 1979, the Administration announced that all new oil procurement would be postponed until after the June 1979 OPEC meeting to avoid price pressure on the world crude oil market. One year later, as OPEC is about to open its 1980 meeting, the same reason is being repeated by the Administration as an excuse for not filling the reserve. Additionally, there is speculation that budgetary reasons may also be influencing the decision not to fill the Reserve. This report indicates that the economic consequences of not filling the reserve are extremely severe.

• OSTI ID: 6485852
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
ECONOMIC IMPACT
ECONOMICS
ENERGY SHORTAGES
ENERGY SOURCES
EVALUATION
FOSSIL FUELS
FUELS
NORTH AMERICA
PETROLEUM
PROCUREMENT
RESERVES
RESOURCES
SHORTAGES
STRATEGIC PETROLEUM RESERVE
USA