By Thomas Catenacci
Daily Caller News Foundation
President Joe Biden’s decision to tap the U.S. Strategic Petroleum Reserve (SPR) was derided by top GOP lawmakers and experts who said the move was political and won’t move the needle on gasoline prices.
The federal government will release 32 million barrels of oil from the SPR and accelerate the release of 18 million barrels that had already been congressionally mandated, the White House announced Tuesday. Biden’s move to release crude oil from the nation’s emergency reserves was made alongside China, India, Japan, South Korea and the U.K., marking the first internationally coordinated release of emergency oil reserves.
However, experts suggested that the action was likely a political reaction to ever-rising prices at the pump and said it wouldn’t have a significant long term effect.
“It’s possible to say, ‘okay, this is something that politically, if not economically, requires intervention.’ The problem might be that, actually they started talking about doing something back in August,” Kevin Book, a National Petroleum Council member and managing director of ClearView Energy Partners, told the Daily Caller News Foundation.
“The White House was aware of these rising prices and concerned about them, and started taking steps towards intervention and created an expectation for intervention,” he continued. “So, even if the economic reality of five or maybe 10 cents a gallon of short term impact isn’t that big of a deal, doing nothing might look like a really big political problem.”
Book added that the release would have a minimal effect on oil prices, which had already declined over the last several weeks as reports of such a move became public. The price of oil is expected to decrease in the next couple of months due to normal seasonal market fluctuations, according to Book.
A Goldman Sachs report published last week echoed Book’s comments, arguing that tapping the SPR is a “short-term fix to a structural deficit” and was already priced-in to the market. Oil prices may even increase more than expected due to the move, the report concluded.
Biden even acknowledged that he doesn’t have a near-term fix for higher prices and that tapping reserves would barely have an effect during a CNN town hall in October. His administration has mulled an SPR release for months.
But, like Book, Chamber of Commerce Global Energy Institute Senior Vice President Christopher Guith said Tuesday that the White House should focus on long term policies rather than “ineffectual band aids.”
‘A cynical move’
Biden, meanwhile, has faced heavy criticism for his administration’s anti-fossil fuel actions, which include revoking the Keystone XL pipeline permit and banning new oil and gas leases on federal lands. While the president has set ambitious clean energy goals, gasoline prices have risen to their highest level in nearly a decade, government data showed.
Gas prices are tightly tied to the price of crude oil.
“This very temporary measure is not going to solve the supply issue at the pump nor is it a solution to gas prices that have doubled in the last year,” Michigan Rep. Fred Upton, the top Republican on a House energy subcommittee, told the DCNF.
The SPR was established in the 1970s as a tool to help the U.S. survive future energy crises where the global supply of oil dried up. The total inventory is estimated at around 604 million barrels of oil which is kept in deep underground storage caverns in Texas and Louisiana.
The last time the U.S. tapped the SPR was in 2011 when former President Barack Obama ordered a strategic release amid the Libyan civil war, a move that disrupted the Middle Eastern nation’s oil exports.
“President Biden’s policies are hiking inflation and energy prices for the American people,” Senate Energy and Natural Resources Committee Ranking Member John Barrasso said in a statement. “Tapping the Strategic Petroleum Reserve will not fix the problem.”
“We are experiencing higher prices because the administration and Democrats in Congress are waging a war on American energy,” he continued.
Dan Kish, a senior fellow at the Institute for Energy Research, said the move was like someone eating everything from the pantry then “shooting the farmers.”
“This is a cynical move by a guy who’s done everything in his power to restrict production here at home and in North America,” Kish told the DCNF. “All the while watching Russia become our number two supplier of foreign oil.”
Kish noted that oil prices have increased since Biden announced the release, a sign that it would have little effect on gasoline prices.
Republican Whip Steve Scalise said the SPR is strictly for emergency purposes in response to a question from the DCNF during an October roundtable. If Biden wanted to lower prices, he would make it easier for firms to drill and construct domestic pipelines, the Louisiana Republican added.
“The SPR is not to be used as a piggy bank just to bail you out when your failed policies create higher gas prices,” Scalise said.
“The answer is very straightforward and it’s right under our feet,” he continued. “Instead of trying to drain what’s left of our reserves, we ought to be producing more energy and creating more jobs here in America to take leverage away from OPEC countries and to take leverage away from Russia.”
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