The Latest Strategic Petroleum Reserve Release Demonstrates the “Consequence and Peril” of President Biden’s War on Fossil Fuels
Key Takeaways:
- The Biden Administration has announced its third release of the Strategic Petroleum Reserve, amounting to a record 1 million barrels per day of oil beginning in May 2022 and lasting 6 months, totaling an overall release of 180 million barrels.
- The announcement is accompanied by a call to impose costs upon companies that have yet not developed federal leases quickly enough—threatening to impose even more costs while ignoring the core issue of regulatory and permitting constraints—many intentionally created by the Biden Administration.
- A recent Rasmussen poll found that 64 percent of Americans view President Biden’s policies as directly responsible for energy inflation, not President Putin.
Today, President Biden announced the latest release from the Strategic Petroleum Reserve (SPR)—the largest strategic stockpile of oil in the world. As of February 25, 2022, the SPR held 580 million barrels of crude oil. The announcement seeks to compensate for the reduction in domestic oil production, corresponding increases in fuel costs, and supply disruptions stemming from Russia’s invasion of Ukraine. However, President Biden has attempted to use this strategic stockpile two times already to counter growing frustration among the American people on record energy prices, starting with the interventions in November 2021 when gas prices experienced an earlier spike as a result of anti-fossil policies and regulations from the Biden Administration.
The Biden Administration also used the announcement of the SPR release to levy even more costs upon fossil producers by calling on Congress “to make companies pay fees on wells from their leases that they haven’t used.” This threat to producers ignores the impact of 14 months of anti-fossil policies and draconian regulations that have made development increasingly difficult.
President Biden’s policies began compounding energy supply concerns well before Russia’s invasion of Ukraine—See AFPI’s latest Issue Brief. On day one, President Biden signaled he would oppose new development in the United States by revoking permitting for the Keystone XL pipeline and halting the sale of federal land leases. These actions, as well as those imposing environmental, social, and governance (ESG) standards and the “social cost of carbon” on private industry and federal regulatory agencies, have constrained capital flows and imposed higher front-end costs upon developers of critical energy resources, particularly shale resource developers who require more frequent permitting to create new wells as others are depleted.
In the absence of fundamental policy reforms, namely walking back climate activism within the Biden Administration, the repeated reliance upon the SPR only undermines the core function of strategic stockpiles, which is to reduce the impact of supply disruptions, not bad policies. Federal government intervention in energy markets should not be normalized.
President Biden’s Use of the Strategic Petroleum Reserve
On November 23, 2021, President Biden issued an order to the Department of Energy to release 50 million barrels of oil. This represents two and a half days’ worth of the United States’ daily consumption based on 2021 levels.
On March 1, 2022, President Biden authorized the Department of Energy to release 30 million barrels of oil. This represents one and a half days’ worth of the United States’ daily consumption based on 2021 levels.
On March 31, 2022, President Biden authorized the Department of Energy to release 1 million barrels per day of oil beginning in May (0.5 percent of the United States’ daily consumption) for 6 months—a total of 180 million barrels of oil—in all, roughly nine days’ worth of the United States’ consumption based on 2021 levels.
Former Secretary of Energy Rick Perry and former U.S. Secretary of the Interior David Bernhardt offered the following statement on President Biden’s latest release:
“Today’s announcement of a “monster reserve release” is just the latest in a long line of policy announcements made by the Biden Administration that are wholly disconnected from reality. They continue to prioritize counterproductive federal intervention in our energy markets, rather than admitting they have made a monumental mistake in declaring war on American fossil fuel production. The bulk of our current energy crisis is not, contrary to the Biden Administration’s attempted deflection, the result of foreign conflict—prices began to rise on day one of the Biden Administration. Today, U.S. oil production is 1.4 million barrels per day below peak oil production under President Trump’s pro-energy independence policies. The United States has vast energy resources; Americans just need President Biden and his Administration to get out of the way.”