Open taps...

Biden to open taps on oil reserves to tamp down gasoline prices

The move "aims to ensure adequate supply as we exit the pandemic," the Energy Department said.

By BEN LEFEBVRE

President Joe Biden ordered the release of 50 million barrels of oil from the nation's petroleum reserves in a bid to tamp down high fuel costs that have fed inflation worries and helped chip away at the president's approval ratings.

The release from the Strategic Petroleum Reserve, which the administration had been considering for weeks, will be coordinated with similar moves by the governments of China, India, Japan, South Korea and the United Kingdom, marking the first time such a large group of countries acted in unison to put the brakes on high oil costs.

The United States will immediately make 32 million barrels of oil currently stored in salt caverns along the Gulf Coast available "in response to the highest oil prices experienced in seven years," the Energy Department said in its announcement of the release. The move "aims to ensure adequate supply as we exit the pandemic," it added. Another 18 million barrels would be offered on Dec. 17.

Gasoline prices had climbed steadily for months as global demand for fuel revved up when the global economy began to emerge from the pandemic. That rising consumption outpaced production from oil companies that had been hard hit financially by the sharp downturn in demand in 2020 and were reluctant to resume drilling in the face of uncertain economic prospects.

"As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” Energy Secretary Jennifer Granholm said in a press release. “This action underscores the President’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.”

Companies have until Dec. 14 to bid on the oil offer, the Energy Department said in its press release. Deliveries will start as soon as late December and end in April.

Domestic oil prices have backed off slightly from the recent high of $84 a barrel in mid-October. U.S. prices were at $76 a barrel in early Tuesday trading. The high prices have pushed gasoline prices to $3.40 per gallon nationally, about 60 percent higher than a year ago.

Republicans were quick to blast the move, however, saying Biden’s poll numbers were the real reason behind offering oil from a reserve that was meant to help aid fuel markets in emergencies.

"President Biden’s policies are hiking inflation and energy prices for the American people. Tapping the Strategic Petroleum Reserve will not fix the problem,” said Sen. John Barrasso (R-Wyo.), who has criticized the administration’s moves to limit auction of federal land to oil producers. “Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster. They’re not substitutes for American energy production.”

The Biden administration said that the SPR sale was in line with laws Congress passed in 2018 that made such sales mandatory for 2022, however. This initial sale would be counted as the first part of the 50 million barrels Congress required for next year, the Energy Department said.