The Biden administration’s decision to drain a significant portion of the nation’s Strategic Petroleum Reserve (SPR) for electoral purposes is likely to cost taxpayers billions of dollars.
In an attempt to reign in skyrocketing gas prices resulting from ill-advised energy policies, the Biden administration began releasing millions of barrels of oil from the Strategic Petroleum Reserve in November 2021. The SPR was established by President Gerald Ford in 1975 to provide a backup supply of oil for the United States in the event of a severe emergency or embargo.
As of today, President Biden has already released more than 200 million barrels from the SPR––more than all other presidents combined––accounting for nearly 40 percent of total reserves. Several members of Congress have raised alarms over the national security implications of the massive releases, which now place the strategic reserves of the United States at their lowest level in forty years.
The Department of Energy has stated its intent to begin purchasing oil to refill the SPR “next year” and the White House recently announced that they plan to start refilling the supply when prices are “at or below about $67-$72 per barrel.” However, according to the U.S. Energy Information Administration (EIA), the average spot price for Brent crude oil is predicted to be $95 per barrel in 2023, even higher than the price of oil today. The EIA further stipulates that “[p]otential petroleum supply disruptions and slower-than-expected crude oil production growth” could lead to even higher oil prices than predicted.
In comparison, the average spot price of Brent crude oil was just $57.90 per barrel during the Trump administration, dropping as low as $25 at the height of the COVID-19 pandemic. In March 2020, the Trump administration attempted to completely fill the SPR with historically cheap oil, but was blocked by Senate Democrats who at the time called it a “bailout” for the industry. Now the Biden administration may pay almost four times as much taxpayer money for the same amount of oil.
The effects of the SPR releases have done little to help the average American. Gas prices today remain just under $4.00 per gallon.
Next year, as the Biden administration begins refilling the SPR, Americans will pay twice: first through taxes as the government purchases new oil, and then through higher prices at the pump as new demand from the government restricts the available supply of oil left in the market.
Just as President Biden reportedly asked Saudi Arabia to delay production cuts by OPEC+ until November to avoid political blowback for Democrats in the midterm elections, Biden apparently chose to schedule his SPR releases through October in pursuit of the same goal.
So far, the largely ineffective SPR releases have been the Biden administration’s only strategy to reduce gas prices ahead of the 2022 election. Biden began his presidency by suspending new oil and natural gas leases on public lands and waters, cancelling the Keystone XL pipeline, and rejoining the disastrous Paris Climate Accords. His signature legislative projects like the so-called “Inflation Reduction Act” also added new inflationary taxes on oil and natural gas production.
Despite the White House placing the blame for lack of supply on oil producers, Biden has leased fewer acres offshore and on federal lands for drilling than any president since World War II. The administration has failed to take any action to increase permitting, reduce regulatory burdens, or decrease taxation on consumers and producers. Instead, they’ve done the opposite.
These policies are in accordance with Biden’s campaign promises to “end fossil fuel” and to allow “no more drilling.” However, when his policies resulted in politically unfeasible gas prices, the administration chose to borrow from the SPR and put U.S. national security at risk in order to propel the president’s party through the midterms.
The Biden administration must reverse course and create an environment which is conducive to the production of more low-cost energy, or else everyday Americans will continue to pay the price.