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DOCUMtENT RES9ME
07620 - [C2968041]
Transportation Planning for the Strategic Petrcleum Reserve
Should Be Improved. LCD-78-211; B-66927. October 18, 1978. 12
Pp.
Report to Secretary, Department of Energy; by J. Dexter Peach,
Director, Enerqy and Minerals Div.
Issue Area: Energy: Role of Fossil Fuels in Meeting Future Needs
(1609).
Contact: Energy and Minerals Div.
Budget Function: Natural Resources, Environment, and Energy:
Energy (305).
Organization Concerned: Maritime Administration.
Congressional Relevance: House Committee on Science and
Technology; Senate Committee on Energy and Natural
Resources.
Authority: Energy Policy and Conservation Act of 1975 (42 U.S.C.
6201). Cargo Preference Act of 1954 (46 U.S.C. 1241).
Merchant Marine Act of 1920; Jones kct (46 U.S.C. 883).
To minimize the vulnerability of the United States to
the effects of a severe enervy-supply interruption and to
provide limited protection fr.)m the short-term consequences of
interruptions in supplies of petroluem products, the Congress
provided for the creation of a Strategic Petroleum Reserve for
the storage of petroleum products. The curreLt goal is to have I
billion barrels of crude oil in storage by the end of 1985 and
500 million barrels by the end of 1980. At July 31, 1978, there
were 35 million barrels of crude oil in storage. The Department
of Energy (DOE) hbs the responsibility for developing a
ccmprebensive plan for transporting the crude oil.
Findings/Conclusions: The DOE has not developed a comprehensive
plan for transporting the crude oil, nor has it prepared overall
transportation cost estimates. Neither the December 1976
Strategic Petroleum Deserve Plan nor the May 1978 amendment had
specific information on transportation plans and costs.
Transportation costs vere niot broker out separately in the $7.5
to $8 billion estimate of the total cost of the reserve. The
impact of the Cargo Preference Act should be a major
consideration. Adherence to the act's requiresents will raise
transportation costs substantially, but the DOE has not
developed the information needed tc accurately quantify these
costs. The Maritime Administration and at least two oil
compaiies disagree on whether U.S.-flag tankers will be able to
transport 50% of the crude oil for the reserve as required by
the Cargo Preference Law. Recommendations: The Secretary of
Energy should develop and make available to appropriate
congressional committees a comprehensive transportation plan for
the Strategic Petroleum Reserve, including detailed
transportation cost estimates and firm information on the costs
and other effects of the Cargo Preference Act. (BRS)](ViewImageLocal?handle=hein.gao/gaobaayew0001&div=1&collection=&method=preview&ext=.png&size=3)