Leasing under the Strategic Petroleum Reserve Program

An opinion was requested on questions of importance to the Strategic Petroleum Reserve Program (SPRP) relating to leasing arrangements and the legislative restriction on property improvements. The Department of Energy may enter into leases for storage space which extend beyond June 30, 1985, when legislative authority relating to the SPRP expires if the leases are necessary for SPRP and in the best interests of the United States. Although the Economy Act of 1932 prohibits paying more than 25 percent of the first year's rent for improvements to leased premises or more than 15 percent of the value of the premises for annual rent, the Energy Policy and Conservation Act provides authority, for purposes of SPRP, to locate and construct storage facilities on leased property. Expenditures can be made for rent and improvements incurred in SPRP which can exceed fiscal limits if disclosed to Congress and not disapproved.