[Energy Supply and Demand Issues]

Energy issues, a major area of GAO activity were presented; 13 strategic and major target areas of GAO work, 6 of which may generate high congressional interest, were identified. These are areas for which a series of building block efforts and a broad summary report within the next 2 years would be timely. Congressional interest in energy issues remains high, and GAO must continue to respond to the growing number of congressional inquiries. Recently, GAO released two reports about natural gas before the President issued his proposals concerning natural gas decontrol. The GAO reports concluded that there is no clearly correct choice; however, if total decontrol is chosen, the contract problem must be confronted. The accelerated leasing of Federal lands for energy exploration and development was, and remains, one of the Reagan administration's key energy initiatives. Emergency preparedness for imported oil interruptions is an area where GAO has made an important positive contribution, especially concerning the controversial Strategic Petroleum Reserve (SPR) fill rate. Two problems that plagued its early development were delays in construction and oil acquisition. The situation today is that the Energy Emergency Preparedness Act requires a minimum average annual fill rate of 300,000 barrels of oil per day until the total reaches 500 million barrels. There is also the problem of Strategic Petroleum Reserve drawdown. Protection from the adverse effects of supply disruption is determined by how and when the Government can distribute SPR oil. GAO believes that more analysis and policy decisions are needed on such questions as timing of drawdowns, strategies in various types of disruptions, and coordination with U.S. allies.