OPINION:
President Biden’s questionable decisions regarding the Strategic Petroleum Reserve continue to raise eyebrows. After the administration recently backpedaled on plans to refill the nation’s emergency oil stockpile because of rising oil prices, news broke that Mr. Biden’s energy secretary sought counsel from the Chinese Communist Party before selling a record-breaking 50 million barrels in 2021 and even more in 2022. At the time, the Biden administration desperately needed other nations to release barrels from the reserve to help lower oil prices.
The Biden administration’s colossal sales from the Strategic Petroleum Reserve have taken reserves to lows not seen since the early 1980s. The Strategic Petroleum Reserve is named that for a reason. It is intended to be used in actual energy crises when the United States needs oil but cannot access it. It is not a political piggy bank to reduce oil prices and get Democrats elected.
The Biden administration’s selling of crude oil out of the Strategic Petroleum Reserve, or SPR, was at a time when prices were high, but not when crude was unavailable. The sales continued through the run-up to the November 2022 elections, along with promises to cancel student loan debt. The SPR sale was not needed; it was just politically desired. And the SPR remains at record lows.
Unfortunately, China ended up purchasing crude released from our SPR sales at a time when China’s economy has been backsliding but its crude imports have been climbing. China is creating a massive stockpile, and the crude sold from the SPR simply aided the Chinese government’s own stock buildup of crude oil.
Drawing down the nation’s SPR is one thing. Still, coupled with the Biden administration’s anti-American oil and natural gas policies and a lack of appreciation for the economic threat of dependence on China, it demonstrates the ignorance of this administration on how energy actually works.
The Biden administration’s abysmal policies on energy include a war against domestic oil and gas, beginning with the canceling of Keystone XL, an aggressive climate agenda driving up Americans’ utility bills, banning permitting on federal land for two months, canceling all federal lease sales, raising royalties for federal leases, and offering incentives for climate policies that encourage the purchase of Chinese-made batteries, solar panels, and wind turbines.
Last month, the Environmental Protection Agency passed the Biden administration’s “day one commitment” requiring coal- and natural gas-fired power plants, which produce more than 70% of America’s power, to capture all carbon dioxide emissions. This nearly guarantees skyrocketing energy costs to households and businesses, drastically diminishing U.S. energy security and economic strength and competitiveness.
In recent weeks, the Biden administration has added about 17 million barrels to the SPR, equivalent to less than one day of U.S. demand. It could have refilled the reserve at much lower oil prices in the $60s, as prices declined considerably following their spike above $100 in early 2022 after Russia invaded Ukraine.
The administration failed to do this likely because it thought it would put a floor on oil prices and support U.S. oil and gas production and operations, which is something this administration has been loath to do. Unfortunately, the Biden administration has continued to focus its energy efforts on curtailing U.S. energy security by undercutting natural gas- and coal-fired power generation and instead promoting expensive, intermittent and unreliable wind, solar and battery ambitions. These products weaken U.S. energy security, increase the cost of living, and almost exclusively come from China, which uses coal-fired power and cheap, if not forced, labor.
With the November election drawing closer, Mr. Biden is in a pickle without as much SPR supply to tap to lower oil prices. Oil prices are rising again, causing pain at the pump, while persistent inflation is hitting the consumer with higher grocery costs and rising electricity and utility bills.
Inflation and economic issues consistently rank as voters’ top concerns, and rightfully so. It would be difficult for even the most fervent anti-Trumper to resist a bit of nostalgia at paying $2 a gallon for gasoline, not to mention 33% lower grocery prices, dramatically lower utility bills and 3.4% unemployment.
Wars and geopolitical tensions are escalating worldwide, leading to sticky and rising oil prices. The Biden administration is not likely to fill up the reserve between now and November and may sell more reserves as elections get closer.
• Jason Isaac is CEO of the American Energy Institute and a senior fellow at the Texas Public Policy Foundation. He previously served four terms in the Texas House of Representatives. Trisha Curtis is a macroeconomist with expertise in U.S. shale markets, geopolitics and China. She is president and CEO of PetroNerds and a senior fellow with the National Center for Energy Analytics.
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