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RCED-85-113 1 (1985-04-22)

handle is hein.gao/gaobabfau0001 and id is 1 raw text is: ErTIEGILTD ---Not to be released outside the Coeeral ItEA tD AE.mntlng Offl e xpi on the l t of c appi-eaI * h * O ff i o o f C g t f ~ s t j 1 0 _ M 8 BY THE U.S. GENERAL ACCOUNTING OFFICE Report To The Chairman, Committee On Energy And Natural Resources United States Senate Optional Development Strategiesxor 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 produc- tion and sale of NPR oil. --Storage development savings for a 750-million-barrel reserve are relatively small--S576 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 of a 750-million-barrel reserve. 4$$D S7-, IPLU I 126864 U z GAO/RCED-85-113 q .-....I APRIL 22, 1985

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