Summary: GAO commented on the Department of Energy's (DOE) plans to stop filling the Strategic Petroleum Reserve (SPR) in July 1986: (1) as a budget-cutting measure; and (2) because it believes it will have stored sufficient oil to meet a 90-day contingency supply commitment to cover import disruptions.
GAO found that SPR will have an inventory level of 502 million barrels of oil, which will meet the 90-day supply commitment; however, if oil imports increase as expected, it will need a larger inventory to meet the commitment. GAO questioned the DOE decision to stop filling SPR because of: (1) the statutory requirement to fill SPR to 527 million barrels by fiscal year (FY) 1988; (2) the recent drop in oil prices; (3) the expected loss of some domestic production with an increased dependence on imported oil; and (4) the expectation that oil prices would increase in the future. GAO believes that the current level of crude oil prices, the availability of storage capacity, and nearly $580 million in unobligated oil account funds provide DOE an opportunity to continue acquiring SPR oil and meet its statutory requirement at a lower cost and with no additional appropriations. GAO also believes that DOE needs to take advantage of the opportunity to increase its SPR storage capacity to 600 million barrels within a relatively short time.
