ABSTRACT

Strategic Petroleum Reserve: Issues Regarding the Inclusion of Refined Petroleum Products as Part of the Strategic Petroleum Reserve, Statement of Frank Rusco, Director, Natural Resources and Environment, Testimony before the Committee on Energy and Natural Resources, U.S. Senate   [open pdf - 162KB]

This document contains the statement of Frank Rusco of the GAO before the U.S. Senate Committee on Energy and Natural Resources on May 12, 2009 on the topic of the U.S. strategic petroleum reserve. "Since the SPR, the largest emergency crude oil reserve in the world, was created in 1975 a number of arguments have been made for and against including refined petroleum products. Some of the arguments for including refined products in the SPR are: the United States' increased reliance on imports and resulting exposure to supply disruptions or unexpected increases in demand elsewhere in the world, possible reduced refinery capacity during weather related supply disruptions, time needed for petroleum product imports to reach all regions of the United States in case of an emergency, and port capacity bottlenecks in the United States, which limit the amount of petroleum products that can be imported quickly during emergencies. For example, the damage caused by Hurricane Katrina demonstrated that the concentration of refineries on the Gulf Coast and resulting damage to pipelines left the United States to rely on imports of refined product from Europe. Consequently, regions experienced a shortage of gasoline and prices rose. Conversely, some of the arguments against including refined products in the SPR are: the surplus of refined products in Europe, the high storage costs of refined products, the use of a variety of different type of blends of refined products-'boutique' fuels-in the United States, and policy alternatives that may diminish reliance on oil. For example, Europe has a surplus of gasoline products because of a shift to diesel engines, which experts say will continue for the foreseeable future. Europe's surplus of gasoline is available to the United States in emergencies and provided deliveries following Hurricanes Katrina and Rita in 2005."

Report Number:
GAO-09-695T
Author:
Publisher:
Date:
2009-05-12
Copyright:
Public Domain
Retrieved From:
Government Accountability Office: http://www.gao.gov/
Format:
pdf
Media Type:
application/pdf
URL:
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