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EMD-82-62 1 (1982-03-12)

handle is hein.gao/gaobabdae0001 and id is 1 raw text is: STATES Y /'' UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 V*AMY AND MNI ALS March 12, 1982 DIVIION B-203117 The Honorable Philip R. Sharp Chairman, Subcommittee on Fossil and Synthetic Fuels Committee on Energy and Commerce 117847 House of Representatives Dear Mr. Chairman: Subject: Leasing Storage Capacity for the Strategic Petroleum Reserve (EMD-82-62) As agreed in testimony before your Subcommittee on March 2, 1982, we are providing supplemental information on accelerating the fill rate for the Strategic Petroleum Reserve (SPR) by leasing existing storage capacity on a temporary basis. Leasing is one option which would enable the Department of Energy (DOE) to satisfy section 1033 of the Omnibus Budget feconciliation Act of 1981 (P.L. 97-35, Aug. 13, 1981), which states that the President shall seek to fill the SPR at an average annual rate of at least 300,000 barrels per day until the reserve contains at least 750 million barrels of oil. As we testified, under DOE's current expansion plans and the fiscal year 1983 budget proposal, the SPR fill rate will continue to be constrained by the rate at which underground storage capacity can be created. The administration plans tocomplete the 750- million-barrel SPR by the end of fiscal year'1990. The. SPR is scheduled to be filled at an average rate of about 186,000 barrels per day in fiscal year 1982. The fill rate would vary during each succeeding year, reaching a high of 225,000 barrels per day in fiscal year 1986 and a low of 68,000 barrels per day in fiscal year 1988. Leasing existing storage capacity until permanent capacity is available would enable DOE to accelerate the fill rate and take advantage of relatively favorable oil prices which now exist. Tables 1 and 2 (see att. I) show the oil storage requirements and the costs that would be associated with achieving the 300,000- barrels-per-day fill rate goal by leasing existingqstorage capacity. Table 1 assumes that the fill rate goal is maintaihed until 750 million barrels are in storage. Table 2 assumes that the fill rate goal is maintained only until the first 500 million barrels are in (306290) p//7

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