Biden to Release 15M Barrels from Oil Reserve-SPR

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Biden Oil Barrels Reserve

Biden could then suppose that the US government will restock the strategic reserve when oil prices are at or below $67 to $72 per barrel. Administration officials say this offer will boost domestic production by ensuring a baseline level of demand.

Biden Oil Barrels Reserve
An infographic titled “US strategic petroleum reserves at 38-year low” is created in Ankara, Turkiye on October 13, 2022. The US Strategic Petroleum Reserve (SPR) fell to its lowest level since 1984, as the country tries to take precautions against the possible rise in prices amid the world’s main producers’ decision to cut oil supply after global recession concerns lowered oil prices. [Yasin Demirci/Anadolu Agency/Getty Images]

Biden Leverages 15M Barrels of Oil Strategic Reserve

President Joe Biden will posit on Wednesday that 15 million barrels of oil will be released from the US strategic reserve. This is in response to recent production cuts announced by OPEC+ nations. He will also say that more oil sales are possible this winter as his administration tries to show that they are pulling out all the stops before the midterm elections next month.

Senior administration officials said Tuesday, on anonymity, that Biden will make a speech on Wednesday to announce the drawdown from the strategic reserve. It finished releasing 180 million barrels, which Biden authorized in March and was supposed to take six months. This has lowered the strategic reserve to its lowest level since 1984. This is a “bridge” until domestic production rises. About 400 million barrels of oil are now in reserve.

Biden will also let more people out this winter to keep prices low. But officials from the administration wouldn’t say how much the president is willing to use or how much domestic production must go up to stop the drawdown.

But the president will likely slam oil companies‘ profits again, repeating a bet he made this summer that public criticism would matter more to these companies than shareholders’ focus on returns.

The next step in Biden’s plan is to move away from fossil fuels and find more energy sources to meet the US and global demand after Russia invaded Ukraine and the Saudi-led oil cartel said it would cut production.

Biden Oil Barrels Reserve
US President Joe Biden at the South Court Auditorium at Eisenhower Executive Office Building on November 23, 2021 in Washington, DC. President Biden announced the release of 50 million barrels of oil from the Strategic Petroleum Reserve of the Department of Energy to combat high energy prices which are at a seven-year high across the nation prior to the holiday travel season. [Alex Wong/Getty Images]

OPEC+ Barrels Cut, Oil & Gas Prices Complicate Biden’s Political Matrix

The potential loss of 2 million barrels per day, or 2% of the world’s supply, has led the White House to say that Saudi Arabia is siding with Russian President Vladimir Putin. Saudi Arabia has also said that there will be consequences for supply cuts that could keep energy prices high. The Energy Information Administration says the 15 million-barrel release wouldn’t be enough to meet the United States’ oil needs for even one full day.

The administration could decide on future releases in a month and a half since it takes that long for the government to let buyers know.

Gas prices continue to be a political problem for Biden. AAA says that the average price for a gallon of gas is $3.87. This is slightly less than last week but more than a month ago. The recent price hike stopped the momentum that the president and other Democrats were getting in the polls before the November elections.

According to an analysis released on Monday by ClearView Energy Partners, an independent energy research firm based in Washington, Nevada, and Pennsylvania, two states that could decide control of the Senate’s evenly divided chamber, are sensitive to energy prices. According to the study, gas prices have risen more than the national average in 18 states, home to 29 House seats that could be “at risk.”

Even if voters want cheaper gas, expected increases in supply aren’t happening because the global economy is worsening. For example, the US government changed its predictions last week, saying that US companies would make 270,000 fewer barrels per day in 2023 than in September. In September, it was thought the world would produce 600,000 barrels less per day than it did.

Biden’s complicated math shows that oil production has not yet returned to its level before the pandemic, around 13 million barrels per day. It’s missing by about a million barrels per day. The oil industry wants the administration to open more federal lands for drilling, give the go-ahead for pipeline construction, and undo recent changes that raised taxes on corporations.

Biden Oil Barrels Reserve
Two Dogs sets off on his bike with the wool bales from the Royal Geelong Yacht Club during the MJ Bale ‘Lightest Footprint’ Campaign on May 25, 2022 in Geelong, Australia. The campaign aims to create hand-knitted sweaters made in Australia from zero-emission wool with arguably the lightest carbon footprint in menswear history. [Daniel Pockett/Getty Images for MJ Bale]

Frozen federal leases, zero emissions & campaign promises

The administration says that the oil industry has thousands of unused federal leases and that producing oil with new permits would take years without affecting current gas prices. Meanwhile, environmental groups have asked Biden to keep his campaign promise to stop drilling on federal land.

Biden has pushed back against policies that US oil producers like. Frank Macchiarola, senior vice president of policy, economics, and regulatory affairs at the American Petroleum Institute, says that Obama has tried to lower prices by releasing oil from US reserves, criticizing oil companies for their profits, and calling for more production from OPEC+ countries with different geopolitical interests.

“If they continue to offer the same old so-called solutions, they’ll continue getting the same old results,” Macchiarola said.

Biden has promised to eliminate carbon emissions caused by fossil fuels by 2050. However, when talking about this promise a little over a year ago, after the G-20 leaders of rich and developing countries met in Rome, the president said that he still wanted to lower gas prices because “$3.35 a gallon has a huge effect on working-class families just trying to get to and from work.”

Since Biden talked about how hard it was to pay $3.35 per gallon for gas and how he wanted to save money, the price has risen by 15.5%.

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