Show BUSINESS J JAN AN ENERGY STRATEGY It has been estimated that the oil 1 embargo of late 1973 and early 1974 cost this country some 40 billion in terms of Gross National Product and the feeling is that another such constrictive crude oil 1 stoppage could be even more damaging Also a like effect worldwide could dangerously set back the US U.S. economy that is now in a recovery stage While the recent price rise edict by the Organization of Petroleum Exporting Countries will have some impact on petroleum product prices another embargo could be a anear anear anear near disaster In order to blunt or maybe thwart any such move the US U.S. is formulating and implementing implementing im im- im one plan which could provide at least a temporary temporary tem tern stopgap The basic scheme that has been envisioned envisioned en en- would establish in this country a Strate Strategic ic c Petroleum Reserve consisting of stored quantities of crude oil or petroleum products to be drawn upon in the event of a shutdown n nin in oil supplies by the Arab andor and and- or the other OPEC countries While it is obvious that nowhere near enough crude oil could be stored to make the country fully independent of outside sources of supply it has been reasoned that an effort of this nature would partially alleviate an embargo and would represent a gesture on the part of this country indicating that embargo measures would be unacceptable Need for imported imported im im- im ported crude will be considerably considerably con con- greater in the years ahead in fact some estimates nearly double import requirements over today's needs by the year 1990 Therefore contingency plans must be formulated now BACKGROUND Actually it was nearly a year ago that Congress authorized the creation of a Strategic Petroleum Reserve The schedule called for storage storage-in- place of million barrels of crude by 1978 million barrels by 1980 and million millio by 1982 In charge of the program is the Federal Energy Administration the watchdog agency set up at the onset of the energy crunch By April 1976 plans began to take shape for submission to Congress with a prompt response mandated Partial funding of the program has already taken place to the tune of more than million These funds will go toward storage facilities and for forthe forthe forthe the initial purchases of oil In total the program will probably run to some 10 billion It is expected that generally oil will be bought on the open market at conventional prices currently estimated at approximately approximately approximately ap ap- ap- ap proximately 11 a barrel STORAGE Actual storage of the oil is one of the intriguing aspects of the program On the surface it would seem to be a mammoth undertaking to store million barrels of oil in the generally accepted manner The great number of storage tanks required would be costly and time consuming to construct In fact however the final solution solutionis is extremely simple and relatively economical The plan calls for storage of the oil in existing salt domes and salt mines located in the Gulf Coast section of the country Salt structures like these have been used for for storage of natural gas under pressure for years and appear ideally suited for storage of crude oil Some domes extend up to two miles across and contain cavernous chambers Salt will not with the oil and is considered an excellent storage medium The domes are mostly close to tanker terminals a consideration eliminating elaborate pipeline construction Development of the storage facilities will be on 00 the order of 2 per barrel of oil far cheaper than tanks or other alternate spaces Wt While le it is obviously too early to assess the attitude of the incoming administration toward the foreign oil producing countries and what measures might be taken to head off a possible future oil embargo there is at least a form of partial insurance with wilh the establishment of the Strategic Petroleum Reserve |