Strategic Petroleum Reserve (SPR)
Overview
- Nation's first line of defense against an interruption in petroleum supplies.
- An emergency supply of crude oil stored at four sites created in huge underground salt caverns along the Texas and Louisiana Gulf Coast.
- Caverns offer the best security, are environmentally friendly, and the most affordable means of storage, costing up to 10 times less than above-ground tanks and 20 times less than hard-rock mines.
- DynMcDermott Petroleum Operations Company is the Management & Operations (M&O) contractor for the Department of Energy (DOE). Corporate headquarters, located in New Orleans, Louisiana, operates and manages the four crude oil storage facilities.
- Gulf Coast locations provide the most flexible means for connecting to the nation's commercial oil transportation network.
- SPR oil can be distributed through interstate pipelines to nearly half of the nation's oil refineries or loaded into ships or barges for transport to other refineries.
Mission
The SPR ensures and maintains the readiness capability to draw down and distribute crude oil from the SPR inventory to commercial distribution systems in order to protect the domestic U.S. economy from the impact of energy-supply disruptions. DynMcDermott's mission is to excel at delivering safe, secure, environmentally responsible and cost-effective SPR operational readiness.
Recent Accomplishments
- Became first oil industry and first Louisiana company to receive the Malcolm Baldrige National Quality Award, the highest presidential honor for management quality (2005).
- Received the 2006 Robert W. Campbell Award, an international award for business excellence that recognizes companies that have successfully integrated health, safety and environmental management into their overall business operations.
- Maintained Occupational Safety and Health Administration (OSHA) and DOE Voluntary Protection Program STAR status for all four operational sites.
- Achieved more than $12 million in cost savings and avoidance through Continuous Quality Improvement.
- Certified to ISO 9000 and 14000.
- Recognized by state awards in Louisiana and Texas at all storage sites.
Contract/Budget
- Managed and operated by DynMcDermott since 1993, the longest term of service for any M&O contractor in the history of SPR.
- Comprised of CSC, McDermott International (B&W's parent company), International Matex Tank and Terminals, and Jacobs Engineering.
- Received approval of contract extension to 2013. The DOE exercised the five-year option under the present contract; the contract value of this extension is approximately $600 million.
- For FY 2008, DynMcDermott received 100 percent of award fee, a first for any DOE SPR contractor.
Infrastructure
- SPR caverns range in size from six to 32-million barrels (one barrel equals 42 U.S. gallons) in capacity.
- Typical cavern holds 10-million barrels and is cylindrical in shape, having a diameter of 200 feet and a height of 2,000 feet.
- SPR has created more than 60 of these underground caverns.
- Four SPR storage sites have an aggregate capacity of approximately 727 million barrels.
Workforce
Approximately 530 people are currently employed by DynMcDermott at the SPR.
Community Impact
- Since 1993 DynMcDermott has enhanced local SPR communities with more than $2 billion in the form of salaries, taxes, subcontracts and community outreach.
- Advocate of the small business-subcontracting program; since 2003 has provided over $72 million to small businesses, $20 million to small disadvantaged businesses, and $16 million to small women-owned businesses throughout DynMcDermott communities.
- Community Outreach is linked to the DynMcDermott philosophy that public support is crucial in the event of a crude oil drawdown.
- Educational outreach is an important part of DynMcDermott's community support as demonstrated by its sponsorship of the Department of Energy's Louisiana Regional Science Bowl. DynMcDermott also partners with multiple at-risk schools in the communities in which it operates.
