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DOCUMENT RESUME
07378 - CC2908004]
(Potential Savings through Purchase of Royalty Oil for Strategic
Petroleum Reserve]. END-79-1; B-178205. October 6, 1978. 6 pp.
Report to Secretary, Department of Energy; by J. Dexter Peach,
Director, &nergy and Minerals Div.
Issue Area: Energy: Role of Fossil Fuels in Meeting ?utu:- Needs
(1609).
Contact: Energy and Winerals Div.
Budget Function: Natural Resources, Environment, and Energy:
Energy (305j.
Congressional eielevance: House Committee on Interstate and
Foreign Commerce; Senate Committee on Energy and Natural
Resources.
Authvrity: Energy Policy and conservation Act of 1975 (P.L.
94-163).
A 1977 report to the Congress stated that oil produced
from Outer Continental Shelf and onshore Federal leases--on
which royalties are paid--could be purchased for the Etrategic
petroleum reserve at substantial savings to the Governront.
Dopartment of Interior officials calculated tbat, bLued OU May
1978 crude oil prices, royalty oil would be $3.01 a barre3 less
than the national average composite price. Total savings that
could result from buying royalty oil for the reserve could be
significant, especially if current price differences and price
controls remain. The Office of Strategic .u.roleus Reserve cited
three potential problems associated with purchasing royalty oil:
an additional administrative burden to the Federal Government,
unsuitability for reserve storage, and passing on some of the
cost to oil users rather than taxpayers. To minimize the cost to
the Federal Government of the strategic petroleum £eserve, the
Secretary of Energy should purchase all suitable royalty oil for
storage in the reserve. (RRS)](ViewImageLocal?handle=hein.gao/gaobaaycl0001&div=1&collection=&method=preview&ext=.png&size=3)