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NSIAD-85-45 1 (1985-02-05)

handle is hein.gao/gaobabnph0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON. D.C. 205418 NATIONAL SECURITY AND RELE,,'I . INTERNATIONAL AFFAIRS DIVISION , . B-217506 FEBRUARY 5, 1985 The Honorable Mike Synar Hi,111. I.imi. i Chairman, Subcommittee on Environment, Energy, and Natural Resources Committee on Government Operations House of Representatives 126372 Dear Mr. Chairman: Subject: /Survey of Oil Company Views on Fair Sharing in an International Oil Supply Disruption (GAO/NSIAD-85-45) As requested in your August 10, 1984, letter and subsequent discussions with your staff, we have surveyed U.S. oil companies that participate in the International Energy Agency (IEA) to determine their views on whether some form of a fair sharing pro- gram is needed in the United States to meet an IEA emergency oil sharing obligation.1 Fair sharing refers to a domestic system to ensure that the burden of sharing oil to meet an IEA supply obligation is borne proportionately or fairly by all oil compa- nies. In other words, among petroleum companies operating within an IEA country, no one company should be disproportionately pen- alized or benefited due to actions it takes to help the country meet its IEA supply obligation. All IEA countries, except the United States, have establish- ed or are establishing fair sharing programs. These programs vary considerably but typically rest upon some form of domestic allocation system. However, the term fair sharing has been used by some U.S. oil companies to mean something other than domestic allocation, namely, guaranteed access to oil from the Strategic Petroleum Reserve (SPR). IIEA was established in 1974 to facilitate a coordinated response among the oil-consuming industrialized countries to oil supply disruptions and other energy problems. Its 21 member nations have, among other things, agreed to subject their oil supplies to an international allocation system in the event of a severe oil supply disruption, using a pre-determined complex formula to calculate each country's right to receive oil or obligation to provide oil. (4881.21) SIlm~

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