THE DEMOCRATS’ OIL FOLLY. President Joe Biden has just announced his plan to release even more oil, 15 million barrels, from the nation’s Strategic Petroleum Reserve. That is the last portion of the 180 million barrels he authorized for release in March, which was the biggest withdrawal ever from the reserve that is supposed to ensure a supply of oil in case of a national emergency.
In this case, the national emergency is most likely the midterm elections, in which the president’s party is likely to lose seats in Congress, in large part because of runaway inflation that is powered, in significant part, by an increase in gas prices. Biden’s release reduces the Strategic Petroleum Reserve, or SPR, to its lowest level in nearly 40 years.
Given that, Biden has also authorized the government to begin purchasing oil to replenish the reserve. But he wants to wait until the price of oil goes down. It is about $90 a barrel now, and Biden has ordered the replenishment of new oil when the price falls below $72 a barrel, which may or may not happen in the near or mid-future.
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Therein lies a story. Way, way back, in March 2020, then-President Donald Trump proposed to fill the Strategic Petroleum Reserve to its maximum capacity with U.S.-produced crude oil. That would have involved the purchase of 77 million barrels of oil. Trump wanted to act because oil was cheap, about $24 a barrel, and the United States could effectively top off the tank for a very good price.
At Trump’s behest, Republicans put money for the oil purchase in a big spending bill that was then under consideration on Capitol Hill. That’s when their efforts were stopped cold by Democrats, who labeled Trump’s plan a “$3 billion bailout for big oil.” This is from Roll Call on March 25, 2020: “The Trump administration’s plan to top off the Strategic Petroleum Reserve ran into a blockade … after lawmakers excluded $3 billion in funding for oil purchases from the massive stimulus package before Congress. Senate Democrats took credit for stripping out that money from the Senate bill … calling it a ‘bailout’ for the oil industry.” In particular, then-Senate Minority Leader Charles Schumer (D-NY) took personal credit for killing the measure.
It was, to say the least, a shortsighted, politically motivated move. “If you believe in the purpose of the SPR, now is the perfect time to make sure it’s full,” the energy secretary at the time, Dan Brouillette, said. “We’re expecting that Congress is going to be supportive of this.”
They weren’t. At least Democrats weren’t. And the effects of Schumer’s move are still being felt today. The Democratic blockade “effectively cost the U.S. billions in potential profits and meant Biden had tens of millions fewer barrels at his disposal with which to counter price surges,” wrote Bloomberg’s Steven T. Dennis last month. On Twitter, Dennis noted that environmental groups cheered Schumer’s blockade. “VICTORY!” tweeted Friends of the Earth on April 3, 2020. “The Energy Department dropped its plan for a $3 billion Big Oil bailout! Thank you @SenSchumer and Senate Democrats for stopping this administration from exploiting a global pandemic to help polluters profit.”
So there it is. If at some point the price of oil does fall below $72 a barrel and Biden moves to replenish the reserve, he will probably tell the country, with Schumer cheering him on, that he’s getting a great deal for the U.S. Then, just remember what happened, and didn’t happen, in 2020.
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