Summary
The nation's Strategic Petroleum Reserve is meant as a hedge against emergencies that cut off oil supplies. The reserve, however, is inadequate to meet several potential scenarios, according to a review of the Government Accountability Office. The GAO reinforces the importance of recently passed federal legislation requiring that the size of the reserve be increased. Both add the important caveat that the additional oil be obtained in a cost-effective way, something that has not happened with past inventory increases.
The Department of Energy would have saved taxpayers nearly $590 million from October 2001 to August 2005 if it had deferred deliveries of oil to the reserve when prices were high, the GAO found. Instead, the department adds a relatively constant amount of oil to the reserve each day regardless of price.See the full content of this document
Extract
Buying Oil Reserves
The GAO investigation was requested by Sens. Susan Collins and Carl Levin, a Mi...
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