WASHINGTON – President Joe Biden has ordered the release of up to 180 million barrels of oil from the nation’s emergency reserves over the next six months in a bid to provide relief to Americans from gas prices that have soared since Russia’s invasion of Ukraine.
Biden’s order, announced Thursday, calls for the release of 1 million barrels of oil per day over the next six months from the Strategic Petroleum Reserve. The action will represent the largest release from the reserve in its nearly 50-year history.
“This is a moment of consequence and peril for the world and pain at the pump for American families,” Biden said.
Gas prices at the pump have jumped by nearly $1 per gallon in the month since Russia’s invasion of Ukraine and now average $4.20 per gallon, with even higher prices in some areas. The war means less Russian oil is getting to the market, and the reduction in supply is raising prices at the pump.
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Biden predicted that releasing oil from the strategic reserves would cause gas prices to drop, “but how far down, I don’t think anyone can tell,” he said.
The administration predicts that release of the oil will serve as a bridge until the end of the year, when domestic production ramps up. The Energy Department will use revenue from the release to restock the emergency stockpile in future years, the officials said.
Biden is acting in coordination with other countries, which also are expected to release oil from their emergency stockpiles.
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Biden’s decision to release oil from the strategic reserves is the third time in four months that he has tapped into the emergency stockpile.
In November, Biden ordered the release of 50 million barrels of oil from the nation’s emergency stockpile to lower energy costs amid a spike in gas prices and soaring inflation. Earlier this month, he released another 30 million barrels from the stockpile.
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Biden promotes domestic oil production
Meanwhile, to encourage U.S. companies to ramp up domestic production, Biden also is proposing a “use it or lose it” policy for companies to produce more oil with the resources they already have. Right now, the oil and gas industry is sitting on more than 9,000 approved but unused permits for production on federal lands.
Biden called for Congress to force companies to pay fees on wells from leases that they haven’t used in years. Companies that are producing from leased acres and existing wells won’t be subject to the fees. But companies that continue to sit on nonproducing acres will have to choose whether to start producing or pay a fee.
While some companies already have announced that they are increasing production, others are raking in record profits while American struggle to make ends meet, Biden said.
“This is not the time to sit on record profits,” Biden said. “It’s time to step up for the good of your country.”
In addition, Biden plans to invoke the Defense Production Act to boost the U.S. production of minerals used in batteries for electric vehicles amid high gas prices and supply-chain challenges.
Biden will add minerals such as lithium, nickel, graphite, cobalt and manganese to the list of items covered by the Cold War-era national-security mobilization law passed in 1950. Such materials are also used for other types of stationary batteries, which would also be targeted under the action.
What is the Strategic Petroleum Reserve?
The Strategic Petroleum Reserve is a stockpile to preserve access to oil in case of natural disasters, national security issues and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. Before Biden’s orders, there were roughly 605 million barrels of petroleum in the reserve.
The reserve was established by Congress in 1975 after the oil crisis in 1973 when oil-exporting nations throttled their production and caused energy prices to soar.
The United States has tapped the reserve to raise revenue as shifts in global oil production made lawmakers less concerned about potential shortages.
Before Biden, the last major release of the oil reserve came in 2011, when President Barack Obama released 30 million barrels of oil to counter disruptions in supply due to civil unrest in Libya. President George W. Bush released 11 million barrels of oil from the reserve in 2005 to counter disruptions from Hurricane Katrina, and his father, President George H.W. Bush, released 17 million barrels during the Persian Gulf War.
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.