Naval Petroleum Reserve: Limited Opportunities Exist to Increase Revenues
From Oil Sales in California (Letter Report, 05/24/94, GAO/RCED-94-126).

The government-owned and operated Naval Petroleum Reserve (NPR) in Elk
Hills, California--the seventh largest oil field in the lower 48
states--generated oil sales revenues of $327 million in 1992. The Energy
Department (DOE) sells most of this oil to California refiners through
competitive bids.  The prices received by the government for this oil
have been lower than prices for crude oil in other parts of the country.
GAO concludes that it will be difficult for DOE to boost revenues from
NPR oil sales by selling oil to Gulf Coast or midcontinent oil
refineries because this oil is of lower quality than other available
crudes and shipping costs are high.  This report explores other ways
that DOE may be able to increase revenues.  For example, DOE bills its
customers more often than private oil producers do, resulting in buyers
making lower bids to compensate for the higher administrative costs.
DOE also does not market its oil as aggressively as private producers
do. In testimony before Congress, GAO summarized this report and also
discussed (1) the relative priority that should be given to several
options for improving the readiness and expansion of the Strategic
Petroleum Reserve and (2) the evolving mission of the International
Energy Agency; see: Energy Policy: Energy Policy and Conservation Act
Reauthorization, by Victor S. Rezendes, Director of Energy and Science
Issues, before the Subcommittee on Energy and Power, House Committee on
Energy and Commerce.  GAO/T-RCED-94-214, May 25, 1994 (15 pages).

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-94-126
     TITLE:  Naval Petroleum Reserve: Limited Opportunities Exist to 
             Increase Revenues From Oil Sales in California
      DATE:  05/24/94
   SUBJECT:  Oil resources
             Crude oil pipeline operations
             Energy supplies
             Petroleum industry
             Domestic crude oil
             Petroleum refining facilities
             Microeconomic analysis
             Oil importing
             Petroleum prices
             Fuel sales
IDENTIFIER:  Strategic Petroleum Reserve
             Naval Petroleum Reserve No. 1 (Elk Hills, CA)
             Naval Petroleum Reserve
             Alaskan North Slope Oil
             California
             SPR
             
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