by Kevin Killough
The The Biden administration made the announcement on Tuesday that it will release 42 million gallons of gasoline from the Northeast Gasoline Supply Reserve. The Department of Energy explained that the release is “strategically timed and structured to maximize its impact on gas prices.” The DOE says this will lend a hand lower prices at gas stations during the summer months, when prices typically rise with demand.
There was a reserve of northeastern gasoline supplies created in 2012 after Superstorm Sandy, which damaged two refineries and closed 40 terminals at the Port of New York. As a result of the supply disruptions, some gas stations in New York were left without gasoline for up to 30 days. The Obama administration created gas reserves to prevent such a shock from happening again.
The Consolidated Appropriations Act of 2024that went into effect in March included language requiring the Department of Energy to sell reserve supplies and close them when depleted.
David Blackmon, writer and energy analysthe said Only News that it was a short-sighted move by Congress. He said there are many potential supply disruptions, so stockpiling may be a good idea. “Only three years ago Colonial Pipeline fell victim to a cyber attack. It was gone for two weeks and there was a gas shortage throughout the region,” Blackmon said.
Price management
In 2022, as Russia’s invasion of Ukraine sent gas prices soaring ahead of the midterm, President Joe Biden tapped the Strategic Petroleum Reserve (SPR) to lower politically inconvenient prices.
Unlike the SWP, the Northeast Gasoline Supply Reserve was already scheduled to close, but the timing of this move suggests Biden remains very interested in managing gas prices ahead of the election.
“This move is simply intended to keep gas prices under control. There is no real problem of supply disruption or threat to national security. We are entering a season of high demand for gasoline, and prices are on an upward trend. So I think it’s just an attempt to stop prices from going up.” – Robert Rapier, chemical engineer and editor-in-chief Slate Warehousehe said Only News.
The Department of Energy is wavering between committing to replenishing the SPR and viewing it as a solution to high gas prices. On May 7, the DOE issued the request buy 3.3 million barrels of oil in the agency’s ongoing efforts to replenish the reserve. This came just two days after Amos Hochstein, Biden’s energy adviser, said so there was enough in reserve to solve supply problemswhich he said the president was willing to do.
DOE contracts signed last week on this request of May 7, while issuing another request for 3 million barrels of oil. While the DOE appears to be continuing on its restocking path, Rapier is doubtful it will go far.
Signing in ForbesRapier explains that the SPR’s oil is stored in underground salt caverns with a permitted capacity of 714 million barrels, which makes it a valuable foreign policy tool and an vital deterrent to other countries that might try to cut off oil imports to the EU. US
By June 2023, the SPR was at 347 million barrels after Biden tapped 291 million barrels. Excluding the most recent purchase, DOE returned about 4.8% of that amount.
In April, the D.O.E decided not to award contracts asking for a supply of crude oil due to high oil prices. In January, Rapier predicted that the Biden administration would not fill more than 10% of the oil produced because Biden would not want to raise oil prices before the election.
Including recent contracts awarded by the DOE, the Biden administration managed to purchase only 17.3 million barrels. That’s just over half of what she would need to buy to make up the 10% of what she had depleted by November.
Rapier said in an interview that he didn’t think that would happen.
Voter concerns
With polls showing the state of the economy as a key issue for votersgas prices will likely be an vital issue in the presidential election.
According to AAAthe national average price of gasoline on Wednesday was $3.61 a gallon. In mid-June 2022, the average national gas price, – reports the Energy Information Agencywas $5.00 and was the highest in history.
Throughout May, Americans for Prosperity (AFP) is working with gas stations across the country to sell gasoline at $2.38, the average price at the start of Biden’s term. AFP hopes that “National gas withdrawal tour” will show how Biden’s economic and energy policies are driving up gasoline prices.
“Biden’s war on American energy has had disastrous consequences, and Americans are struggling with high gas prices heading into the summer. From closing the Keystone Pipeline to banning power leasing on federal lands, Joe Biden’s top-down policies have strangled our nation’s energy resources and made even things like family travel more costly,” Akash Chougule, AFP vice president of government affairs, – wrote in the statement. Continued apply of SPR is not a popular move among energy experts because it takes more oil out of the market and refilling it risks high future gasoline prices.
But considering the polls Biden is falling behind presumptive GOP nominee Donald Trump, Biden is unlikely to be willing to weather high gas prices.
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Kevin Killough is a reporter for Just the News.
