Optional development strategies for the Strategic Petroleum Reserve
The Strategic Petroleum Reserve (SPR) was planned to store 750 million barrels of oil by 1991. Additional costs to reach this level are estimated at $9 billion. As a deficit reduction measure, the fiscal year 1986 budget proposes an indefinite moratorium on all future SPR activities - leaving the reserve with 489 million barrels of oil. GAO analyzed the budget proposal and five optional size strategies and noted that: since the administration's proposal is less than 500 million barrels, annual Naval Petroleum Reserve (NPR) revenues, totaling about $1 billion, could be lost. This could occur because the Energy Security Act tied a minimum 500-million-barrel SPR to continued production and sale of NPR oil. Storage development savings for a 750-million-barrel reserve are relatively small - $576 million-compared to $7.6 billion in savings resulting from slowing or stopping oil purchases. Maintaining SPR facilities during a moratorium would cost about $689 million over the next 5 years. However, additional storage capacity could be added at incremental costs ranging from $6 million to $539 million for a 500-million- and 750-million-barrel reserve, respectively. The decision before the Congress on the size and fill rate of the SPR revolves very much around the value associated with the immediate need to reduce the budget deficit as contrasted with the need to pursue the objective to a 750-million-barrel reserve.
- Research Organization:
- General Accounting Office, Washington, DC (USA). Resources, Community and Economic Development Div.
- OSTI ID:
- 5460798
- Report Number(s):
- GAO/RCED-85-113; ON: TI85901761
- Resource Relation:
- Other Information: Report to the Chairman, Committee on Energy and Natural Resources, United States Senate
- Country of Publication:
- United States
- Language:
- English
Similar Records
Strategic Petroleum Reserve: an overview of its development and use in the event of an oil supply disruption
Feasibility and cost of interim storage for the Strategic Petroleum Reserve