U.S. Government Accountability Office recently published its review of management of the nation’s strategic petroleum reserve as requested by the Department of Energy. GAO concluded that Congress hasn’t specified priorities or identified a target size for the SPR, and the department hasn’t completed a long-term plan to inform operational and investment decisions. The GAO report was released June 26.
The reserve currently holds about 350 million barrels of crude oil at two locations each in Texas and Louisiana (current total capacity 680 million). The review found leaking brine disposal pumps at the Big Hill SPR in Jefferson County near Beaumont (capacity 170 million barrels). The other Texas location is Brazoria County near Freeport (capacity 247 million barrels).
Since 1985 the Department of Energy has released more than 500 million barrels of crude oil from the SPR, including 180 million barrels in 2022 when Russia invaded Ukraine and 172 million barrels in response to the U.S.-Israeli war in Iran.
GAO said investments in the SPR are not keeping pace with the aging reserve’s needs, and the department last completed a long-term strategic review of the SPR in 2016.
GAO made three recommendations for Congress: (1) adopt timelines and requirements for periodic long-term plans for SPR, (2) consider temporarily limiting non-emergency sales and (3) authorize funding mechanisms that align with long-term plans to facilitate management of investments, such as budget authority for DOE to collect and retain revenue from sales and leased assets to cover costs.