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The Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the nation’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing further, according to people familiar with the matter.
The move would effectively represents the tail end of a program announced in the spring to release a total of 180 million barrels of crude from the Strategic Petroleum Reserve. About 165 million barrels has been delivered or put under contract since the program was put into effect.
The Biden administration also is set this week to provide details on plans to replenish the emergency stockpile. The Energy Department announced in May it was planning a new method of buybacks to allow for a “competitive, fixed-price bid process,” with prices potentially locked in well before crude is delivered.
The announcement will be part of response to the ongoing effects of Russia’s war on Ukraine, a senior administration official said. It will also address anxieties about stubbornly high gasoline prices ahead of midterm elections next month and historically constrained supplies. Heading into winter, the U.S. has the lowest seasonal inventories of diesel, according to data first compiled in 1982.
Separately, the administration is still weighing limits on exports of fuel to keep more gasoline and diesel inside the U.S., according to two of the people, who weren’t authorized to speak publicly about internal deliberations. Although no timeline has been set for a decision on that potentially more dramatic step, it wouldn’t happen before November’s midterm elections, one of the people said.
The export control idea, which would be temporary, has sparked division within the administration, as top Biden energy adviser Amos Hochstein argues in favor of new export controls even as Deputy Energy Secretary David Turk has expressed concerns, said people familiar with the matter. Other White House officials, including national security adviser Jake Sullivan and Chief of Staff Ron Klain, have yet to make a recommendation.
Energy Department and White House officials have been quietly meeting this week with oil companies, including ExxonMobil and ConocoPhillips, to notify them of what to expect while continuing to encourage additional production of oil and refined fuels.
Oil industry representatives and third-party energy analysts have cautioned that limiting fuel exports could lead to higher prices in parts of the U.S., particularly in the import-reliant Northeast.
Spokespeople for the White House didn’t immediately comment. The Energy Department referred to a previous comment from earlier this month that asserted the administration was going to look at all tools available to protect Americans and uphold commitments to allies.
Republicans have made rising gasoline prices and inflation the centerpiece of their campaign to take control of Congress in the elections. The White House has been seeking to ease rising costs at the pump and bolster low domestic stockpiles of fuel while also responding to the OPEC Plus coalition’s decision earlier this month to slash production.
Gasoline prices, one of the most visible signs of inflation, are a political headache for President Biden, who in recent weeks has repeatedly warned oil companies against raising costs. Average U.S. gasoline prices were slightly lower at $3.87 a gallon on Monday, according to data from auto club AAA, and are above $4 in Indiana.
“The price of gas is still too high and we need to keep working to bring it down,” Biden said at an event in Los Angeles last week.
White House economic adviser Jared Bernstein said Sunday that Biden hadn’t yet made a decision on an SPR release. The reserve is still more than half full, he told Fox News Sunday.
“The fact is there is capacity to use the SPR to deal with some of the energy shocks we’re seeing in the world. But I’m not saying we will. The reserve, which has the capacity to hold about 714 million barrels, contains 405.1 million barrels, as of Oct. 14.
The White House had indicated that further SPR drawdowns were a possibility shortly after the OPEC Plus announcement.
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Why would any of this be put into any other market except the USA?
Let other countries fend for themselves. The SPR was never intended to be political folly.
More oil from our strategic reserves for the White House to sell to their bosses in China. HMMMMMM
The way to bring the price back down for crude oil is to allow the oil companies to drill off shore and inland for our country and only our country. I agree wholly with Tony C’s comment about having other countries fend for themselves. Is there no crude oil underground in Europe or like Israel, Egypt, elsewhere in the continent of Africa? We know there’s oil in Libya, Algeria. Might have to drill to a greater depth to extract it. Fossil fuels are and will be direly needed and necessary for many years ahead until some other inexpensive fuel can be developed to generate an over abundance of electricity to power vehicles and heat and cool buildings and our homes. I’m anxiously awaiting AOC and her Green New Deal cronies to tell us what such fuel source will take the place of gasoline (from crude oil), fuel oil to heat many thousands of homes, natural gas and either nuclear generated electricity or some other fuel to generate electricity. How soon will there be an alternative fuel source to power thousands of 18 wheel semi-trucks or farm tractors or huge diesel operated construction equipment? Biden drank AOC’s Green New Deal kool-aid with no plan in place for economical fuel sources other than crude and natural gas. And now we see inflation out of control for their stupid got-to-do-the-Green New Deal dance immediately. And again, electric vehicles seem to be a panacea for their use-no-oil mantra. Such a mental lapse in their collective judgment.
Today and for the past 5+ years, private sector can’t even complete a nuke plant in Georgia promptly without numerous and very costly changes and cost overruns, still not generating any electricity (Google Vogtle Nuke plant to read about that boondoggle project). Remember the costs wasted on Public Service of Indiana’s attempt years ago now to build a nuke plant down in Madison, on the Ohio River, called Marble Hill? Public Service of Indiana was acquired by Duke Energy and Duke could hardly finish building their coal gasification plant without numerous cost overruns. And that plant uses that fossil fuel commonly known as “coal”.
The energy games need to end and the Biden administration and certain members in Congress need to get back to the reality of fossil fuel use in our country. And drill for oil and finish the Keystone XL pipeline until true economical alternative fuels can come on-line.
All comments so far are right on the money. Biden would sell his soul -not to mention having sold the country’s- for one more vote to keep his sorry ass and his/their acolytes in office. They’d play hell fending for themselves in the private sector, useless parasites they are.
This “draining of the Strategic Oil Reserve” is like the old time “Blood letters.” They keep cutting and drawing blood hoping that somehow this will release the “vapors” of bad choices and economic stupidity.