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U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Special Report 

Expansion of the Strategic 

Petroleum Reserve 

DOE/IG-0767 June 2007 
Department of Energy 

Washington, DC 20585 

June 19, 2007 

pector General 

SUBJE INFORMATION: Special Report on "Expansion of the Strategic 

Petroleum Reserve" 

INTRODUCTION 

The Energy Policy Act of 2005 required the Department of Energy to expand the Strategic 

Petroleum Reserve's (Reserve) maximum storage capacity to 1 billion barrels of crude oil. The 

Department stores the oil in large underground caverns, which have been created in salt domes. 

After evaluating various alternatives, the Department decided to develop a new 160 million 

barrel storage facility at Richton, Mississippi, and to expand the storage capacity at two existing 

Reserve facilities. As part of the evaluation, the Department eliminated a salt dome in 

Bruinsburg, Mississippi, from consideration as a potential expansion site. According to 

Department officials, the Bruinsburg site was not selected because (1) the salt dome was too 

small to meet storage needs, and (2) the site presented significant technical risks since thc 

Department would have to use deep injection wells to dispose of nearly 1.2 million barrels per 

day of brine used to excavate the caverns. 

Subsequent to the announcement of the Richton site as the preferred expansion alternative, 

public and congressional entities raised serious concerns about the procedurcs uscd by the 

Department in eliminating Bruinsburg as an expansion location. For example, a member of 

Congress raised concerns to the Department on several occasions that in determining the size of 

the Bruinsburg salt dome, the Department had not (1) considered existing well data, (2) resolved 

questions about data reliability concerning the location of wells, and (3) used existing seismic 

data. Additionally, four private-sector geologists concluded that thc Bruinsburg salt dome was 

large enough to meet the Dcpartment's storage requirements for 160 million barrels of oil. 

Finally, the Congressman was concerned that the Department's planned approach at the Richton 

site to use a 100-mile long pipeline to the Gulf of Mexico to dispose of brine produced during the 

creation of the storage caverns could cause environmental damage due to pipeline leaks. We 

initiated this review to evaluate the above concerns. 

OBSERVATIONS 

Our review found that the Department and its contractor analyzed all available well data and 

seismic data related to the Bruinsburg site and augmented this information wit11 additional 

seismic tcsts. We found, as well, that there are inherent uncertainties involved in the process of 

estimating the size of the salt domes. As a consequence, the exact size and shape of the 

Bruinsburg salt dome is not fully known. Professional geologists have interpreted the available 

data differently, and we were not able to resolve these differences of opinion. 
With reference to the concern about brine leaks, we found that the Department has improved its 

pipeline protection measures at its existing facilities and plans to employ such improved 

measures in support of the Richton storage operations. 

EVALUAUON OF BRUINSBURG DOME 

Consideratio~of Well Data 

In evaluating the size of the Bruinsburg salt dome, Sandia National Laboratories (Sandia), which 

conducted the evaluation for the Department, considered previously collected well data. 

Specifically, Sandia gathered well data from multiple sources and evaluated the data in 

developing the geological model used to estimate the size of the Bruinsburg salt dome. 

Sandia used well data indicating the presence of salt, or lack thereof, to estimate the extent of the 

salt dome to establish the boundaries of the dome. Where well data conflicted with seismic data, 

Sandia relied on the seismic data to establish the boundaries of the salt dome. 

Overall, Sandia obtained data from 28 wells in the immediate vicinity of the Bruinsburg salt 

dome. In evaluating the size of the Bruinsburg salt dome, Sandia: 

Used data from 23 of the 28 wells to define the boundaries of the salt dome: 9 of the 

wells showed the presence of salt, and 14 did not; 

Determined that it could not use data from two wells either because the well was too 

shallow or geologic information about the well was insufficient to be of use in the 

evaluation; and, 

Did not rely on the data from three remaining wells because of uncertainties associated 

with the location of the wells. In each of these instances, Sandia decided to use seismic 

data, which it considered more definitive in analyzing the size and shape of the salt 

formation, rather than rely on well data that only indicated one point on the top of the salt 

dome. 

Reconciliation of Well Locations 

We determined that Sandia, in conducting its analysis, was not able to fully reconcile the 

uncertainties related to well locations at the Bruinsburg site. The well location discrepancies 

resulted from Sandia obtaining relevant data from multiple sources. For example, Sandia 

obtained well data from a commercial vendor, a web site maintained by the State of Mississippi 

Oil and Gas Commission, and a compendium of salt dome information published by the 

Mississippi Department of Environmental Quality. These sources often reported conflicting 

locations for the same wells. These differences were compounded by the use of multiple maps 

with different coordinates. Sandia attempted to reduce the uncertainty related to the well 

locations by overlaying maps and adjusting map scales. However, significant discrepancies 

regarding well locations still existed for multiple wells. For example, at the project's completion, 

the spatial uncertainty for nine of the wells was 500 feet or more. Sandia's inability to fully 
reconcile the uncertainties with well locations at the Bruinsburg site was consistent with the 

Mississippi Office of Geology's Atlas of Shallo~v Mi.ssi.ssippi Salt Domes, which identified issues 

with well locations in the Bruinsburg area. 

Sandia notified the Department of the issues regarding the well locations and recommended 

locating the wells in February 2006. Sandia restated its recommendation to locate the wells in 

June 2006. The Department, citing the difficulties and limited usefulness of locating buried well 

casings, decided to obtain existing and new additional seismic data to delineate the edge of the 

salt dome in lieu of attempting to locate the wells at Bruinsburg. 

Use of Seismic Data 

To supplement its use of well data, Sandia used seismic data in the evaluation of the Bruinsburg 

salt dome. 111 May 2006, Sandia obtained and analyzed scismic data from two previous seismic 

surveys performed for oil exploration in the 1970s. Only one of the seismic surveys showed 

evidence of salt at depths needed to meet the Department's design criteria for storage caverns, 

which Sandia used in establishing the southwestern boundary of the dome. 

In addition to using existing seismic data, the Department directed and funded Sandia to conduct 

two additional seismic surveys to further define the boundaries of the Bruinsburg salt dome. We 

determined Sandia used the existing and additional seismic survey data. Although there were 

two other seismic tests that had been conducted in the Bruinsburg dome area, data from the tests 

were either not available for sale, or the brokerlonner could not find the data. 

Intcrpretation of Data 

Although Sandia used all publicly available data and obtained additional seismic data, large areas 

of the salt dome are not characterized by data. As a result, there are differing professional 

interpretations of the data and conclusions about the size and shape of the dome. 

The impact of additional data and professional interpretation of the data is illustrated by the 

revisions to Sandia's size estimates throughout the project. Sandia initially projected the size of 

the dome to be about 700 acres after a preliminary review of publicly available well data. Sandia 

later reduced that cstimate to 277 acres after incorporating data from two seismic surveys, which 

were shot in the 1970s for oil exploration. After adding additional data from two new seismic 

surveys, conducted specifically for the Reserve expansion project, Sandia reduced its estimate of 

the area of useable salt from 277 acres to 121 acres. Based upon the available well and seismic 

data, Sandia concluded that the Bruinsburg salt domc could hold a maximum of 70 million 

barrels of oil, was not sufficient to meet the Reserve's storage capacity requirement. 

Several private-sector geologists expressed disagreement with Sandia's estimate of the size of the 

dome and the decision to give preference to seismic data over coriflicting well data. The 

dissenting geologists provided summary estimates of the dome size, which ranged from 286 

acres to 365 acres. These geologists also stated that all well data should have been incorporated 

into Sandia's analysis and relied upon. We were not able to resolve these professional 

differences of opinion. 
Departmental and Sandia personnel indicated that additional tests, such as 3-dimensional seismic 

tests, could be performed that might reduce the uncertainty as to the size and shape of the 

Bruinsburg dome. However, these individuals stated that the test results would not eliminate all 

questions related to the suitability of the Bruinsburg salt dome for Reserve expansion. 

One of the private-sector geologists provided a nonpublic salt proximity survey from a well 

located southeast of the Bruinsburg salt dome, to support that the donie was larger than Sandia 

estimated. After analyzing the data and contacting the generator of the data, Sandia concluded 

that the assunlptions (on which this 1989 vintage salt proximity survey was based) did not reflect 

what is currently known about the dome and had a probable error rate of about 25 percent. 

Overall, Sandia concluded [hat this data did not show that the Bruinsburg salt dome was larger. 

PIPELIIUE LEAKS 

Finally, we found with reference to the concern about brine leaks, that the Department planned to 

implement pipeline protection measures that it has used at other Reserve sites to minimize such 

leaks. About 20 years ago, the Reserve had problems with leaks in brine disposal pipelines. 

Specifically, the Reserve had two major brine disposal pipeline leaks in the 1980s, including 

575,000 barrels of brine leaked at the West Hackberry site in 1985 and 825,000 barrels of brine 

inadvertently released at the Bryan Mound site in 1989. To protect against additional brine 

pipeline leaks, the Reserve instituted a corrosion prevention program and internally lined 

replacement brine pipelines. We found that the number of brine spills at the Reserve had greatly 

declined, and only 232 barrels were released by the Reserve between 1997 and 2005. 

This report is being provided for information purposes, and no fonnal recommendations are 

being made. The Office of Inspector General appreciates the cooperation of all parties that were 

contacted during the conduct of this review. 

Attachment 

cc: Acting Under Secretary of Energy 

Assistant Secretary, Office of Fossil Energy 

Assistant Secretary, Office of Congressional and Intergovernmental Affairs 

Chief of Staff 

Team Leader, Audit Liaison Team, CF-1.2 

Audit Liaison, Office of Fossil Energy, FE-3 
Attachrncnt 

SCOPE AND METHODOLOGY 

We conducted this review from February 2007 through May 2007 at the Office of Fossil 

Energy in Washington, D.C. and Sandia National Laboratories in Albuquerque, New 

Mexico. The scope of the review included site selection and evaluation activities related 

to the Reserve expansion project. To accomplish the review objective, we: 

Met with Department officials responsible for developing recon~mendations for 

the Reserve expansion project; 

Reviewed Sandia's February, June, and December 2006 reports on the geological 

assessment of the Bruinsburg salt dome; 

Interviewed personnel from Sandia regarding the methodology used for the 

Bruinsburg geological assessment; 

Interviewed two private-sector geologists who disagreed with Sandia's 

methodology and conclusions; 

Obtained a listing of wells in the vicinity of the Bruinsburg salt dome, reviewed 

supporting documentation, and deternlined the disposition of the data for each 

well; 

Gathered documentation related to the acquisition of seismic data at Bruinsburg; 

Obtained additional non-public geotechnical information from one well and 

provided the information to Sandia for review; and, 

Reviewed environmental reports for docun~entation of historical brine leaks at 

Reserve sites. 
IG Report No. DOEJIG-0767 

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