Report to the President and the Congress on the size of the Strategic Petroleum Reserve

Abstract

This report is to satisfy the requirement of the Omnibus Budget Reconciliation Act of 1981 that the Secretary of Energy transmit a report to the President and the Congress regarding the final storage level of the Strategic Petroleum Reserve (SPR). The legislation requires an analysis of the costs and benefits associated with achieving the 1 billion barrel SPR size set forth in the SPR Plan as amended, and any larger or smaller final storage level which may be appropriate. To be responsive to the specific information request of Congress, the focus of this report is on the quantification of the relative costs and benefits associated with different SPR sizes. In addition, it is recognized that there are other reasons for having a government oil stockpile which are not readily quantified. These reasons include foreign policy and national security implications of a petroleum supply disruption. The Department believes that large strategic oil stockpiles can be cost-effective for coping with oil supply disruptions and recommends continued development of a 750 million barrel (MMB) SPR as provided for in the President's FY 1983 budget proposals. The Department does not believe it is necessary or appropriate to change the SPR Plan provisions for an ultimate stockpile size up to 1 billion barrels, on the ground that increases beyond the planned 750 MMB SPR system at a future date could provide net economic benefits to the United States.