3.
United States Energy Strategy.
a. The United States was for many years the leading oil producing country in the world. In 1982, was
third behind the Soviet Union and Saudi Aria in production. The United States is without question the world's
largest consumer of petroleum and must import 40 percent of the oil it uses.
b. The embargo of petroleum supplies by the OPEC started in the winter of 1973 and demonstrated to
the United States the need for an emergency oil storage program.
c. The shortage resulting from the embargo caused severe impacts on our economy and emphasized our
vulnerability to oil imports.
d. In December 1975, the U.S. Congress passed the Energy Policy and Conservation Act which
established the Strategic Petroleum Reserve and authorized the storage of up to 1 billion barrels of oil. The SPR
is not for military use; it was established to provide a source of crude oil for commercial use in the event of
another major oil embargo.
e. Work on the acquisition of salt cavern sites close to major oil distribution networks, and their
preparation to hold oil began in 1976. By early 1979 when the program was stopped the reserve held 91.7 million
barrels. However, work on cavern sites preparation continued.
f. In 1980, after almost two years of inactivity in the purchase program, Congress passed the Energy
Security Act. Under the ESA, the United States could resume filling the SPR at an annual rate of at least 100,000
BPD. Congress's FY 81 appropriation bill stated that the President will seek to fill the SPR at a minimum of
300,000 BPD.
g. Fill goals for the SPR, starting with an inventory of 252 million barrels in FY 81, were 278 million
barrels in FY 82 and a total of 750 million barrels in FY 89.
h. In addition to the Strategic Petroleum Reserve, the United States has attempted to reduce its
dependence on foreign energy by looking for new energy sources.
(1) Oil company scientists and engineers have worked for years to develop synthetic petroleum from
oil shale, tar sands, and coal.
(2) Several oil companies are leading the way in oil shale research by putting their geological and
chemical experience to work on research and development projects. For example, oil companies are involved in
all the major ongoing oil shale projects.
(3) Research into tar sands in the United States is being conducted by the Federal government and
several oil companies. Tar sands are a mixture of clay, bitumen, sand, water, and sulfur.
(4) Coal can be turned into fuel gases and liquids. Although the processes are presently
uneconomical, research and development programs have been and are now being funded by the Federal
government and private industry, including several oil companies. Coal is also being transported in "slurry" form
from mine to the preparation plant.
(5) Many companies are doing research on new sources of energy including solar, nuclear,
geothermal, tidal, and wind power. Because most of these sources of energy are still in the developmental stage,
the cost of producing energy from them makes them economically impractical.
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QM5200
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