News flash for President Joe Biden and his administration: The “strategic” in Strategic Petroleum Reserve does not, in fact, refer to its ability to be used as part of a midterm election strategy.
But, used for that purpose it apparently will be. According to Fox Business, the Biden administration announced it would release 10 million barrels of oil from the national reserve in November as a counter to production cuts just announced by the Organization of the Petroleum Exporting Countries.
On Wednesday, OPEC announced it would be cutting production by 2 million barrels of oil per day as prices of crude had dropped from record highs earlier this year. That’s a significant cut, considering that, in 2021, the OPEC nations produced about 31 million barrels of oil per day, according to the data compilation firm Statista.
“The cuts will restore the oil market for top producers like Saudi Arabia and Russia but are also expected to drive up costs at the pump globally,” Fox Business noted.
The administration countered that move hours later with an announcement that 10 million barrels would be released from the reserve in November, an attempt to forestall any hike in gas prices.
The Strategic Petroleum Reserve is, essentially, what it sounds like. As the Energy Information Administration’s website notes, it was “established primarily to reduce the impact of disruptions in supplies of petroleum products” and is “a significant deterrent to oil import cutoffs and a key tool in foreign policy.”
The “key tool in foreign policy” part may have been true when Biden pledged to release 1 million barrels a day in March, shortly after Russia invaded Ukraine. This time, it’s a key tool in domestic policy; OPEC production cuts aren’t rare, nor was this one unpredicted despite the White House trying desperately to avert it.
However, the prospect of energy prices going on the upswing again as the country gets deeper into fall and winter approaches could take away a major Biden talking point as the midterms approach: Happy days at the pump may not be here again, but the days of woe are gone.
In July, Biden bragged during a virtual meeting with his economic team that, from a national average of above $5-a-gallon in June, gas prices have “fallen every day this summer for 38 days in a row.”
Have gas prices started going back up around where you live?
“I’ve been working to make sure that when the price of oil comes down, the price at the pump comes down as well and comes down in real time,” Biden said on July 22, according to The Associated Press. “The good news is that’s happening, but it’s not happening fast enough. We’ve made progress, but prices are still too high.”
In remarks last month, he similarly tried to sell Americans on the fact that the worst was over, particularly at the pump.
According to a White House transcript of a Sept. 2 event at the Eisenhower Executive Office Building, in addition to saying that inflation “may be beginning to ease,” Biden bragged that “gas prices have now fallen 80 straight days — the fastest decline in over a decade – and the price at the pump is now $1.20 a gallon less than it was the beginning of summer.”
With roughly a month until the midterms, anxiety over OPEC cuts could render that talking point moot. Then again, dipping into the Strategic Petroleum Reserve still might not be the best idea.
For starters, there’s no guarantee releasing oil from the Strategic Petroleum Reserve actually reduces prices, since it’s a little like throwing half a glass of water into a half-drained swimming pool and then hoping U.S. drivers can do a half-gainer into bottomless low prices.
In November of 2021, for instance, Biden released 50 million barrels from the SPR in response to higher oil prices — and yet, prices didn’t go down. In fact, they went up after he made the announcement, with the West Texas Intermediate crude oil index up 2 percent and the European Brent Crude index up 3 percent.
Meanwhile, prices at the pump continued skyward — even after Biden pledged an additional 1 million barrels a day in March. According to EIA data, the monthly average price of gas didn’t hit its high until June, and by that point it had climbed from $4.32 to $5.03 a gallon. (The national average was was $2.42 a gallon in January 2021, when Biden took office, according to the EIA.)
Steve Milloy, a former Trump transition team member, pointed out the flaw in using the SPR in a tweet after the November 2021 release: The United States uses 18-19 million barrels of oil a day, and the world uses roughly 100 million. No amount released from the reserve would make that much of a difference.
Joe Biden is going to release 50 million barrels of oil from the Strategic Petroleum Reserve.
That is less than three days of US oil consumption (18 million barrels/day during the pandemic year of 2020).
The release will have no meaningful impact on gas prices.
Ridiculous. pic.twitter.com/a6DCA24uMd
— Steve Milloy (@JunkScience) November 23, 2021
Furthermore, continued releases from the SPR are eroding its ability to function as a stockpile of oil so massive that it acts as a foreign policy deterrent. As of the week ending Sept. 30, SPR data show, the reserve stood at 416,389 barrels — the lowest level in almost 40 years and down roughly a third from the 638,086 barrels that were there in the week ending Jan. 29, 2021, the first week Biden was in office.
And think all of that oil is going into American gas tanks and home heaters? Think again: China and Europe got plenty of what ended up being released.
“More than 5 million barrels of oil that were part of a historic U.S. emergency oil reserves release aimed at lowering domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices touched record highs,” Reuters reported in July.
“The fourth-largest U.S. oil refiner, Phillips 66, shipped about 470,000 barrels of sour crude from the Big Hill SPR storage site in Texas to Trieste, Italy, according to U.S. Customs data. Trieste is home to a pipeline that sends oil to refineries in central Europe.”
Of course, to opponents of the Biden administration, the answer to our energy problems is obvious: Start looking inward, not to OPEC or to the SPR, to solve oil and natural gas problems. The United States is more more than capable of doing it.
A barrel of oil drilled fresh in Texas pollutes no more than a barrel from the reserve or from Saudi Arabia. It’s a heck of a lot easier to get hold of, though, and it doesn’t deplete the SPR in the process.
If the United States had pursued energy-friendly policies at the beginning of the Biden administration, this mightn’t have been an issue. Instead, the Biden administration put all its eggs in the renewables basket in the hopes fossil fuels would die an artificial death.
They haven’t, and prices have skyrocketed as oil becomes more difficult to get from abroad — which means Democrats are in big trouble at the polls next month. Thus, we get futile, short-term, Hail Mary gestures like this.
It might not have been the strategy anyone was talking about when the Strategic Petroleum Reserve was christened, but it’s what Biden is using it for now.
