September 26, 2012
Alleged Storage Capacity Concerns at the Strategic Petroleum Reserve
The Department of Energy's (Department) Strategic Petroleum Reserve (SPR) has the largest stockpile of government-owned emergency crude oil in the world. The SPR crude oil inventory is stored in underground salt caverns that have an authorized storage capacity of approximately 727 million barrels (MMB). These caverns are susceptible to "creep," a geological force that causes caverns to close over time, thereby decreasing available cavern space to store oil. A process known as "leaching" is used to create cavern space by injecting fresh water at high pressure to dissolve salt. SPR consists of 62 caverns located at four sites in Louisiana and Texas, and is operated for the Department by DM Petroleum Operations Company (DM).
The Office of Inspector General received a complaint alleging that: (1) the Department and DM intentionally overfilled SPR; (2) Department and DM officials were awarded big bonuses to fill SPR to the authorized storage capacity; and (3) filling SPR to the authorized storage capacity played a role in a July 2010 fatality at one of the SPR sites. We initiated the inspection to examine the facts and circumstances surrounding the allegations.
We did not substantiate the allegations. We did not find that the SPR had been overfilled but noted that the Department is in the process of addressing technical concerns that could impact the ability to sustain authorized storage levels. Based on the results of our review, we made no recommendations to management.