President Joe Biden will release nearly one-third of the Strategic Petroleum Reserve over the next six months to combat rising gas prices and inflation in the face of Russia’s war in Ukraine.
The Biden administration has sought to cast historic 7.9% inflation, specifically the rise in prices at the gas pump, as the “Putin price hike,” but energy prices had already spiked 3.5% in February prior to the invasion after rising steadily for the previous year.
WHITE HOUSE EXPECTS INFLATION WILL ‘SUBSTANTIALLY’ INCREASE IN COMING MONTHS
Senior administration officials briefed reporters on the action Thursday morning ahead of a nationally televised address at 1:30 p.m. elaborating on the action.
Per senior administration officials, Biden will release 1 million barrels a day for the next six months, amounting to 180 million barrels. The Department of Energy will use the revenue from those sales to restock the reserve in future months.
Biden will also call on Congress to pass legislation enacting what officials referred to as “use it or lose it” fines for domestic oil companies. The fines would tax companies on “wells from their leases that [oil companies] haven’t used in years and on acres of public lands that they are hoarding without producing.”
Furthermore, Biden will invoke the Domestic Production Act to “secure American production of critical materials to bolster our clean energy economy,” a direct effort to advance the administration’s green energy goals while quickly moving the United States away from dependence on Chinese mineral procurement.
It’s worth noting that senior administration officials would not estimate how quickly Biden’s action would reduce domestic gas prices but maintained it is an important “step” toward lowering prices for consumers and achieving American energy independence.
Biden previously released roughly 60 million barrels from the strategic reserve in 2021, and states across the country have taken independent measures to lower gas prices, including the suspension of taxes on gas in some areas.
Crude oil prices, a key driver of inflation, fell by just over $5 per barrel on the news of Biden’s pending announcement, but both U.S. and global benchmarks currently sit $60 higher than 2021 levels. Before Biden instituted a U.S. ban on Russian energy imports, crude oil prices jumped to $140 per barrel.
Former President Donald Trump heartily criticized Biden’s reported release Thursday morning.
“So after 50 years of being virtually empty, I built up our oil reserves during my administration, and low energy prices, to 100% full,” Trump wrote in a statement. “It’s called the Strategic National Reserves, and it hasn’t been full for many decades. In fact, it’s been mostly empty. It’s supposed to only be used for large-scale emergency or conflict.”
“Biden has just announced he’s going to take what we so carefully and magically built, and what will be a futile attempt to reduce oil and gasoline prices,” he continued. “They will soon bring it down to empty again. It just never ends!”
The SPR held 695 million barrels when Trump entered the White House in January 2017 but had fallen to 638 million barrels by the time he left office in January of 2021.
Biden’s announcement comes as inflation presents an increasing problem for Democrats heading into the 2022 midterm elections.
Recent polling data from the Associated Press and Pew Research suggest that midterm voters from both parties are overwhelmingly focused on inflation and the economy heading into the November elections.
A poll released Sunday by NBC News found that Biden’s approval ratings, which had bounced back following his initial response to the war in Ukraine, had settled back to just 40%. Furthermore, only 33% of respondents approved of Biden’s handling of the economy.
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Meanwhile, Biden’s Council of Economic Advisers has predicted that inflation will increase “substantially” throughout 2022.
