President Joe Biden plans to tap into US oil reserves for the third time in five months as the cost of fuel continues to soar and Americans feel the squeeze of inflation hitting a 40-year high.
Biden is expected to announce as soon as Thursday that he will order the daily release of up to 1 million barrels from the strategic petroleum reserve, sources told the Associated Press. The plan was first reported by Bloomberg News.
The president will speak to the nation at 1:30 p.m., one day after crude oil traded at almost $105 per barrel – up from $60 at this time a year ago. It’s unclear how long the releases could go on once ordered by the White House.
At the pumps, the national average price of a gallon of gas hit a high of $4.33 on March 11, the most expensive since 2008, according to AAA. The average has since come down to $4.24 as of Wednesday, with AAA saying demand has dropped off due to high prices forcing consumers to alter their driving habits.
Russia’s invasion of Ukraine and resulting sanctions from the US and its Western allies have been blamed for contributing to ballooning energy costs around the globe, but oil producers have yet to ramp up production as prices have risen.
A Dallas Federal Reserve survey of fossil fuel executives showed about 59% said pressure from investors to preserve “capital discipline” during an inflationary period was the main reason production levels have remained static, the AP reported.
When Biden imposed a ban on all Russian energy imports on March 8, he warned the effects of the move would be felt by everyday Americans.
“Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to [Russian President Vladimir] Putin’s war machine,” he said. “This is a step that we’re taking to inflict further pain on Putin, but there will be costs as well here in the United States.”
As the Biden administration has faced the brunt of criticism for rising gas prices, the White House and energy officials have repeatedly pointed fingers at one another.
Earlier this month, press secretary Jen Psaki highlighted that there are 9,000 drilling permits that are not being used across the US.
“The suggestion that we are not allowing companies to drill is inaccurate. The suggestion that that is what is hindering or preventing gas prices to come down is inaccurate.”
The press secretary later insisted that oil companies do not require “an embroidered invitation to drill.”
According to the Department of the Interior’s Bureau of Land Management (BLM), there are 9,173 unused applications for permits to drill (APD) that have been approved as of December 2021. Another 4,621 APDs are pending approval.
The Biden administration previously agreed to release 50 million barrels from the reserve in November, then announced the release another 30 million barrels at the beginning of this month in coordination with the release of another 30 million barrels by 30 countries around the world.
“The President stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic,” the White House said at the time.
There were still more than 568 million barrels in reserve as of March 25, the AP reported.
With the US already consuming 20 million barrels of oil per day, critics were skeptical that the release would do anything to help bring down prices.
“Over the past 120 days, 110 million barrels of oil reserves have been committed for release. About a million barrels a day,” tweeted Brian Brenberg, a business and economics professor at The King’s College in New York. “If you’re wondering what Biden’s latest 1 million-barrels-day release plan is going to do, well, look around. You’ve seen it.”
“Again, strategic oil reserves are for an emergency, not for stupid governance decisions,” author and former investment banker Carol Roth posted. “And even if it is all for the US, this is 9 days of consumption.”