Biden Announces Release of 180 Million Barrels of Oil From Strategic Petroleum Reserve Over Six Months
Do you support or oppose releasing 1 million barrels of oil per day over 6 months from the SPR?
What’s the story?
- President Joe Biden announced Thursday that 180 million barrels of oil will be released from the Strategic Petroleum Reserve over the next six months in an effort to counteract rising energy prices. It will be the largest drawdown of the Strategic Petroleum Reserve in its 47-year history.
- One million barrels of oil will be released daily from the Strategic Petroleum Reserve during the six-month period. Strategic Petroleum Reserve releases can take several forms, including outright sales or exchange agreements with private companies that function like loans, although this particular release will likely involve emergency sales using emergency drawdown authority.
- On a daily basis, the U.S. consumes about 20 million barrels of oil per day, so a release of 1 million barrels per day would account for about 5% of daily oil consumption. At the end of January, the Strategic Petroleum Reserve contained just over 588.3 million barrels of oil, which means that about 30.6% of the Reserve would be sold off during the drawdown.
- This will be the third time Biden has initiated a drawdown of the Strategic Petroleum Reserve since he took office in January 2021. The first occurred in November 2021, when he announced the release of 50 million barrels of oil, while the second occurred earlier in March 2022 when 30 million barrels were released. As was the case with other historical drawdowns from the Strategic Petroleum Reserve, neither release had a substantial impact on the trajectory of energy prices facing consumers.
What they’re saying
- President Joe Biden said the drawdown of the Strategic Petroleum Reserve is necessary because the economic recovery from the pandemic is causing demand to rise, in addition to sanctions on Russian oil due to Vladimir Putin’s invasion of Ukraine that have constrained the global oil market. The president explained:
“Today, I’m authorizing the release of 1 million barrels per day for the next six months — over 180 million barrels — for the Strategic — from the — from the Strategic Petroleum Reserve.
This is a wartime bridge to increase oil supply until production ramps up later this year. And it is by far the largest release from our history. It will provide a historic amount of supply for a historic amount of time ― a six-month bridge to the fall. And we’ll use the revenue from selling the oil now to restock the Strategic Petroleum Reserve when prices are lower so we’ll be ready for future emergencies. Folks, I’ve coordinated this release with allies and partners around the world. Already, I have — we have commitments from other countries to release tens of millions of additional barrels into the market."
- Minority Leader Mitch McConnell (R-KY) spoke on the Senate floor and said of the move, “President Biden is going to try to slap another band-aid on gas prices by draining more oil out of our Strategic Petroleum Reserve.” He added:
“The Reserve is supposed to exist for giant unforeseen crises such as a war between great powers. It’s not there so that anti-energy politicians whose policies have raised gas prices can try to hide that from the public. It’s also worth remembering that back in 2020, as oil prices were cratering, Republicans tried to seize the opportunity to refill the Strategic Reserve.
It would have been a win-win-win: Helped stabilize our energy industry in the early days of the crisis; gotten American taxpayers an incredible deal with oil at bargain-basement prices; and enhanced our readiness going forward. But you know what happened, Madam President? Senate Democrats blocked it. They said buying oil at rock-bottom prices and building up our Reserve would have been, ‘a bailout for Big Oil.’ So the Democratic Leader bragged about killing that provision.”
What is the Strategic Petroleum Reserve?
- The Strategic Petroleum Reserve (SPR) is a supply of petroleum held by the Dept. of Energy (DOE) for emergency use. It was created in 1975 after the 1973-74 oil embargo by OPEC to mitigate the impact of future supply disruptions on U.S. energy markets by holding 1 billion barrels of oil in reserve.
- The SPR’s maximum authorized storage capacity reached an all-time high of 750 million barrels in 1991, but that declined after a facility closure. The most oil held in the SPR was 726 million barrels in 2009. The Energy Policy Act of 2005 authorized expansion of the SPR to its original goal of 1 billion barrels of storage capacity, but that failed to materialize because of opposition to a proposed facility in Mississippi.
- The SPR currently has a congressionally authorized capacity 713.5 million barrels of oil (actual physical capacity is 727 million barrels) at the four operational SPR facilities: Bayou Choctaw, Louisiana (76 million barrel capacity); Big Hill, Texas (170 million barrel capacity); Bryan Mound, Texas (247.1 million barrel capacity); and West Hackberry, Louisiana (220.4 million barrel capacity).
- SPR facilities are located 2,000-4,000 feet below ground in naturally-occurring salt formations that offer cost, environmental, maintenance, and security advantages over surface storage tanks. Salt caverns are about one-fifth the storage cost of surface tanks, geologic pressures naturally seal cracks in the salt formations to prevent oil leaks, and the temperature differential keeps the oil circulating to keep its quality consistent. They can also be enlarged to fit precise dimensions through a mining process in which the salt is dissolved with fresh water.
Will the Strategic Petroleum Reserve be replenished?
- Biden said Thursday that he intends to replenish the Strategic Petroleum Reserve “when prices are lower” and thanked the energy companies that have “indicated they will be producing an extra 1 million barrels of oil per day, probably starting as early as this fall.”
- It’s unclear whether the Reserve will be partially replenished during the drawdown, although that may depend on the state of oil prices at the time.
- When oil prices plummeted in the spring 2020 due to the onset of the COVID-19 pandemic ― briefly hitting a low of -$38 per barrel due to a lack of storage facilities before rebounding to $18 per barrel ― the SPR had an inventory of 635 million barrels of oil and there was a debate about replenishing the reserve while prices were low.
- Republicans and then-President Donald Trump pushed to include $3 billion in the $2 trillion CARES Act relief package to fill the Strategic Petroleum Reserve to capacity, but were thwarted by Democrats as then-Senate Minority Leader Chuck Schumer (D-NY) derided the move as a “$3 billion bailout for big oil.”
- Biden Reverses Course, Announces Ban on Russian Energy Imports (3/8/22)
- Biden Admin Balks at Banning Russian Oil Imports Amid Putin's Invasion of Ukraine (3/5/22)
- Biden Orders Release From Strategic Petroleum Reserve Amid Rising Energy Prices (11/23/21)
- Should the U.S. Refill the Strategic Petroleum Reserve While Oil is Cheap & Pay Down the Debt With the Profits Later? (4/20/20)
— Eric Revell
(Photo Credit: iStock.com / onourdongel)
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Biden is providing another innovative, bold and well thought out counter move to offset the loss of Russian oil. He is incentivizing US production increases to restore the strategic reserve which he is releasing now to counter the financial impact of Putin’s war in coordination with a unified international alliance. It is really good to see a President that is forward looking with well thought out actual plans instead of someone trying to ‘market speak’ away issues and condemn others as their only action.
America was Energy Independent a few months ago, Did the Democrats invest in Oil then create a shortage driving up the price of thier stocks ?
Biden thinks this release of our strategic oil reserve is a great political move but it has not served AT ALL to stem the rise of energy (and other) costs. Worse yet, the SOR is designed for true security threats to our country, not to gain votes for this woke administration. BTW, this "release" make our federal government a profit of $80 per barrell from the oil that the Trump Administration purchased when oil could be had for $20/ barrell.
Biden is doing this in tandem with new mandates for energy efficient cars. This will help keep gas prices low, while looking towards the future…or should I say allowing a future. We NEED to move to reliable, renewable green energy sources! https://www.npr.org/2021/12/20/1066001919/epa-fuel-economy-standards-cars-trucks
What happened to 1 million barrels till inflated prices come back down?
Reopen the Keystone pipeline and open back up land for drilling. In your haste to undo every good thing that Trump, you’ve (democrats) shown a complete inability to think through the ramifications your actions. And you don’t understand why Biden’s approval rating is as low as it is!
Our own production of oil was restricted by Biden to foster green energy plan. So Biden got Putin a better price for his oil because you know someone will buy Putin’s oil.
We need an immediate solution, although this won't fix our problem, it will help for now until we can come up with a better plan.
The blah blah is that Merrick has 776 cases regarding the Jan. 6 investigation! So tough 💩! Well 1 (we?) only care about maybe 30! So quit with the damn low-lives and get to the MEAT. We can deal with the low-lives later. The time is running. Memories will be failing. NO MORE STONEWALLING !! RESIGN OR DO YOUR DAMN JOB!! And make sure Justice Thomas goes, too. He new what g i n n i was doing. Hell, all you had to do was look at her friends to know! Or do you think we’re all so fucking stupid, like the cult?
The world must, MUST, stop relying on fossil fuels. There are more environmentally friendly forms of power that can be shifted to.
Thank you for helping regular Americans through this tough time. I’ve also never felt more incentivized for getting an electric car.
Can we PLEASE eliminate the use of alllllll fossil fuels as soon as we can!?
This is one of the Bigest Mistakes that he could make and he has made some horrible mistakes the last 15 months. This is for emergencies only.
I think we should release all of our oil all at once, flood the streets with it, and totally destroy our rivers, lakes and oceans in one grand gesture. Release the natural gas, light it with a match and call it a day. That’s where we are headed. The fossil fuel cartels of the world have got us by the balls. Solar power? The Republicans in Florida are bought and paid for by Florida Power and Light and are working their asses off to prevent the implementation of solar. This, in the so called “sunshine state”. This is just the tip of a very nasty iceberg. The mass murder of Ukrainians? Gas and oil are the weapons behind it. NATO nations dependency on Russian oil and gas is financing the Russian military and Putin’s threat to cut it all off prevents NATO from fully committing to Ukraine’s defense. We have dug ourselves into a hole out of which we will never climb.
I hope that it all goes away, or is used up however they like! It is filthy, dangerous and destroying our earth and water. There is a 70 year old rusted out rotting Canadian oil pipeline underneath the Mackinaw Bridge in the Straits of Mackinaw. (which has currents equal to those of Niagra Falls because it located where Lake Huron and Lake Michigan collide. That is the largest fresh water source in the World! When that old thing blows again (many spills have already occurred since the 1950's when it was laid). We all will be buying WATER from Russia! (2ND largest fresh water source in the world is Lake Baikal in Russia!
It should help but we must replenish it later on
Only temp fix
The only real solution is buy less. With a consumer driven economy, buying less lowers prices. Drive less = save the planet.
I just wanted to say that, if Merrick Garland cannot handle his job responsibilities, he should resign and let someone who CAN take his place. The American people have seen way more than enough EVIDENCE to charge them all with. If you fear violence in the street from the cult, then bring in the Marines and the National Guard to squelch it. This needs to be dealt with before any of us can get back to any semblance of normalcy again. DO YOUR FREAKIN’ job!
What a moron. This will be the third oil/gas "emergency" in these dipshits 15 months of leading from the rear. Always a little short in the math department, some fail to recognize or are in outright denial that when illegit Joe took office the average price per gallon at the pump was $2.36. Where I live, the average posted price is $2.33 MORE than that today, which for those of you reaching for a calculator is $4.69 per gallon. That is just shy of a 99% increase which is just shy of a doubling price. The false narrative about ramping up battery production for electric cars assumes that the ingredients to manufacture the batteries is readily available. Which they are not - do your research and see what countries you will be beholden to. Besides, the power grid would collapse under the weight of recharging all the electric cars leftists dream about. Your policies, like your ideology, is a failure. The real emergency we have in this country at the present is the regressive progressive left.
With the massacres it may be time for nato to step in and stop this madness. What in really is Putin going to do about it. It is the perfect time his military is about played out.
I would like to see the US government match Canada’s mandate to end to combustible fuel in cars by 2035.