DOE signs documents to use salt dome

Published 5:32 pm Thursday, February 15, 2007

U.S. Secretary of Energy Samuel W. Bodman officially selected the salt domes near Richton for expansion of the strategic petroleum reserve on Wednesday.

Bodman and Gov. Haley Barbour signed the documents during at a ceremony at the University of Southern Mississippi. Government-owned oil stored at the site will be used in cases of national emergency or oil shortages.

“Today’s announcement will make America a more secure and prosperous nation,” Bodman said

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The Richton reserve will hold about 16 percent of the 1 billion barrels of oil government officials want to store. There are 727 million barrels of oil held in the reserve already, good for about 60 days should there be a disruption of imports.

The program was established after the 1973-74 oil embargo and the reserves have been tapped occasionally, most recently last June when the Calcasieu ship channel near Lake Charles, La., was closed due to release of oil into the channel, a DOE news release said.

The new site is part of President Bush’s 2005 energy bill, seeking to more than double the nation’s reserves within the next 20 years to 1.5 billion barrels of oil in storage, which could serve America’s fuel needs for 97 days in the event that all oil imports were cut off.

Bodman told the standing-room only crowd at the University of Southern Mississippi that the project is expected to cost $3 billion over the next eight years.

Oil is stored in salt caverns instead of tank facilities because it is up to 10 times cheaper. The other four strategic petroleum reserve sites are in Louisiana and Texas. Oil is already held in about 50 salt domes in Mississippi.

Barbour said he expects that the state will continue to play a large role in the country’s changing energy policies.

“Mississippi is going to be a leader as America achieves energy independence,” he said.

The project is expected to create 500 jobs during the construction phase, with about 100 permanent jobs once the reserve is completed with a pipeline to Pascagoula.

“This project will be an enormous economic boost for south Mississippi and will propel our state into the forefront in protecting and preserving vital national energy resources,” Barbour said.

The Richton site is located on 1,500 acres off Mississippi 42 west of Richton. The site was considered in the late 1970s for storage of nuclear waste and in the early 1990s for petroleum.

Two pipelines are planned. A 70-plus mile line to Jackson County on the Gulf Coast and a 110-mile line to Liberty, would require landowner approval and purchases for rights of way, officials said.