Biden Again Turns to Strategic Petroleum Reserve to Ease Gas Prices
WASHINGTON, D.C. — For the second time in four months, President Joe Biden is tapping into the Strategic Petroleum Reserve to help motorists deal with the pain at the pump.
On March 31, the president announced a two-step plan to drive down gas prices. In one step, the administration is putting 1 million additional barrels of oil on the market per day on average for the next six months. According to the White House, "the scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up."
The Department of Energy will use the revenue from the release to restock the Strategic Petroleum Reserve in future years.
The second part of the plan calls for a boost in domestic oil production — which is expected to increase by 1 million barrels per day this year and nearly 700,000 barrels per day next year.
However, Biden said some companies are not doing enough, and he called on Congress to make companies pay fees on wells from their leases that they haven't used in years and on acres of public lands that they are sitting on without producing.
"Companies that are producing from their leased acres and existing wells will not face higher fees. But companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre," the statement from the White House said.
This is not the first time Biden turned to the Strategic Petroleum Reserve. In late 2021, the administration announced it would release 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the disconnect between demand exiting the COVID-19 pandemic and supply.
While the last move came as supply and demand pushed gas prices higher, the war between Russia and Ukraine has been the key driver behind pump increases over the past few weeks.
Industry Reaction
The administration's announcement drew swift reaction. The Iowa Renewable Fuels Association noted that the president did not include using the U.S. Environmental Protection Agency's (EPA) emergency authority to lift summertime restrictions on E15 sales, a fuel blend currently selling for 10 to 30 cents less per gallon than E10 in Iowa. Without EPA action, E15 will not be sold after June 1 in roughly 60 percent of the country, including Iowa.
"We are disappointed President Biden failed to include American biofuels in his plan to reduce fuel prices. Lifting restrictions on E15 this summer would be a win for consumers, farmers, and American energy security," said Iowa Renewable Fuels Association Executive Director Monte Shaw. "We strongly urge the President to take immediate action to include this step in his plan. There is still time to act."
The Renewable Fuels Association (RFA) also criticized the administration's action.
"Doubling down on petroleum dependence is not an economically or environmentally sustainable solution for lowering gas prices, and it completely undermines this administration's ambitious climate objectives," said RFA President and CEO Geoff Cooper. "It is baffling to us that President Biden continues to overlook ethanol, which is the most readily available, lowest-cost and lowest-carbon option for extending our nation's fuel supply."
According to the RFA, the Biden administration should be empowering farmers and ethanol producers instead of fining U.S. oil producers.
"Today, ethanol is selling for $1 per gallon less than gasoline and we are sitting on record ethanol inventories and ample spare capacity; yet access to the marketplace continues to be limited by decades-old regulatory barriers that never made sense," Cooper said. "Simple administrative actions could unleash the power of renewable fuels to immediately reduce pump prices without sacrificing the health of our environment.
"Yet, the strategic national asset that is our renewable fuels industry continues to be neglected by this administration. We urge President Biden to take action now to facilitate expanded production and use of low-carbon biofuels like ethanol," Cooper added.
Additional biofuel and farm advocates also urged Biden to expand access to plentiful, lower-cost biofuels. Specifically, renewable energy advocates reiterated their call for the White House to allow for the year-round E15 sales
The following joint statement was issued by the Advanced Biofuels Business Council, Growth Energy, National Corn Growers Association, National Farmers Union, and Renewable Fuels Association:
"The White House is actively considering an E15 fix to deliver relief at the pump, but today's announcement made no mention of homegrown fuels. It was just another stop-gap release of oil reserves and a promise of more mineral extraction down the road. The clock is ticking, and failure to protect E15 from summer fuel restrictions threatens to take away a popular, money-saving option at the pump in 30 states. If action isn't taken by the administration, those drivers will see their gas prices spike overnight.
"There's a record surplus of lower-cost, domestic biofuels ready to more than fill the void left by Russian oil. E15 has already been helping some drivers save more than 30 cents a gallon. Given the steady discount on ethanol against unblended gasoline, biofuels are a source of energy security and savings the White House cannot afford to ignore. Just today, another bipartisan band of lawmakers called on President Biden to waive outdated and senseless restrictions on the sale of homegrown ethanol, reflecting a growing chorus of leaders concerned about the fast-approaching regulatory cliff on gas prices. The time to act is now," the statement read.