Questionable Suitability of Certain Salt Caverns and Mines for the Strategic Petroleum Reserve

EMD-78-65: Published: Aug 14, 1978. Publicly Released: Aug 14, 1978.

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The Energy Policy and Conservation Act requires the Department of Energy (DOE) to create a strategic petroleum reserve to protect against disruptions in energy supplies. DOE plans to store 1 billion barrels of crude oil in salt caverns and mines by December 1985. Although DOE has not yet estimated the cost to store 1 billion barrels, it did estimate the cost to store 750 million barrels at $14.4 billion.

Of the 19 existing salt caverns that DOE acquired, 6 may not be suitable for long-term storage because they do not meet structural design standards for oil storage suitability. Three of the 6 caverns have already been certified for storage, but the other three failed to pass tests. Alternatives to the continued use of these caverns if they are found to be unsuitable are: (1) abandoning the unsuitable caverns and using additional cavern storage capacity developed during withdrawal, or (2) using salt water to displace oil during withdrawal so no additional growth can take place. If these alternatives do not work, DOE may have to resort to acquiring other existing caverns or building new ones. The salt mine acquired by DOE may not be suitable for long-term crude oil storage because of safety problems and the resulting potential legal and financial ramifications. Cost estimates for acquisition, construction, and operation of reserve storage facilities have not been adequately documented.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Energy should: (1) study the alternatives for minimizing the risks associated with using the potentially unsuitable caverns and make the study results available to Congress; (2) develop a formal system for documenting, before test completion, any acceptable deviations and approvals for such deviations; (3) delay further oil storage development at the salt mine until a solution has been developed to the problems involved in using the salt mine for storage; and (4) ensure that all further cost estimates relating to the reserve program are adequately documented.

    Agency Affected:

 

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