15 Million More Barrels of Gasoline Being Released From Strategic Reserve
WASHINGTON — The Biden administration will release 15 million barrels from the Strategic Petroleum Reserves, and may consider releasing significantly more this winter, in an effort to ease high gasoline prices.
The announcement comes in the wake of several polls indicating that voters are particularly concerned with the economy and inflation, and as the White House strives to shore up Democratic congressional candidates ahead of next month’s midterm elections.
According to a notice of sale issued Wednesday morning by the Department of Energy, this, the last tranche of a 70-million-barrel draw down announced by President Biden last spring, will be delivered in December.
In announcing the release, the president called on the DOE “to be ready to move forward with additional significant Strategic Petroleum Reserve sales this winter if needed due to the war in Ukraine or other disruptions of the global fuel market.”
He also announced the administration intends to repurchase crude oil to replenish the SPR when prices are at or below about $67-$72 per barrel, adding to global demand when prices are around that range.
As part of this commitment, the Energy Department will adopt a rule allowing it to enter fixed price contracts through a competitive bid process for products delivered at a future date.
In a briefing with reporters on Tuesday night, a senior administration official said this repurchase approach will protect taxpayers and help create certainty around future demand for crude oil.
The White House also hopes that it will encourage firms to invest in production right now.
Finally, the president is calling on companies to pass through lower energy costs to consumers right away.
“The profit that energy refining companies are now capturing on every gallon of
gasoline is about double what it typically is at this time of year, and the retailer margin over the refinery price is more than 40% above the typical level,” the official said.
“These outsized industry profit margins — adding more than $0.60 to the average price of a gallon of gas — have kept pump prices higher than they should be,” the official added.
But Sen. John Barrasso, R-Wyo, ranking member of the Senate Committee on Energy and Natural Resources, slammed the move in a written statement Wednesday, calling it nothing more than an act of political desperation.
“The Strategic Petroleum Reserve was built for a national energy crisis – not for a Democrat election crisis,” Barrasso said. “Joe Biden is draining our emergency oil supply to a 40 year low. His dismal approval rating is not a justifiable reason to continue to raid our nation’s oil reserves. The surest way to bring down energy prices is to unleash American energy production.”