By: U.S. Senator John Barrasso
Sept. 27, 2022
Benjamin Franklin is credited with saying that “we will not appreciate water until the well runs dry.” The same might be said of our nation’s emergency oil stockpile.
President Joe Biden has raided 190 million barrels of oil from America’s Strategic Petroleum Reserve (SPR). This is in response to a political jam that his own anti–oil-and-gas policies helped create: record gasoline prices. As a result of his recklessness, the reserve’s inventory has dropped to a 40-year low. This will need to be replenished.
The debate on the need for an emergency oil reserve began during the Second World War. It was not until after the 1973 Arab Oil Embargo that President Gerald Ford signed legislation establishing a strategic stockpile of up to 1 billion barrels of oil. At that time, America imported more than one-third of its oil supply.
The SPR was intended to ease the effects of unexpected supply disruptions. Large emergency drawdowns have occurred twice, once during the Persian Gulf War and once after Hurricane Katrina. It was never intended to bail out an administration’s failed energy policies. But that is exactly how President Biden has tried to use it: not as a strategic petroleum reserve, but as a strategic political reserve.
Indeed, raiding the SPR is an admission by this president that his anti–oil-and-gas policies contributed to the oil-supply shortfall that drove gasoline prices to record highs. The administration may try to pretend otherwise, but President Biden’s keep-it-in-the-ground policies are a major reason Americans are facing an energy-cost crisis.
Unleashing American energy production, not draining our own emergency supply, is the lasting solution to high prices. Despite high market prices, domestic crude-oil production is running about 7 percent below its pre-pandemic peak of almost 13 million barrels per day.
Production is even further below where it should be. In 2020, the U.S. Energy Information Administration was forecasting that America today would be producing more than 14 million barrels of oil daily in a much lower price environment. We are about 2 million barrels short of that. Imagine what a difference that could have made.
This president is unwilling to encourage more oil from U.S. producers. He would rather raid the SPR because — to paraphrase notorious bank robber Willie Sutton — that’s where the additional oil is.
In March of this year, Biden issued two emergency orders authorizing the release of a combined 190 million barrels of oil through October, about 155 million barrels of which have been released to date, with the rest expected to be released before December.
Add 70 million barrels of exchanges and statutorily required sales, and SPR oil stocks will plunge from 620 million barrels at the start of this fiscal year to just 360 million. That will leave the inventory at its lowest level since 1983, adequate for just about 22 days of supply and down from a high of more than 50 days of supply. Despite this, energy secretary Jennifer Granholm has not ruled out further SPR sales.
In contrast to the president’s phony fix, a production increase of 2 million barrels per day would put as much oil on the market in half the time (95 days) of the president’s “emergency” sales. Unlike the president’s short-term SPR releases, pumping 2 million more barrels of oil every day for years to come would be a long-term fix that would actually lower prices for struggling families.
Democrats are congratulating themselves because gasoline prices have slipped from their more-than-$5-per-gallon peak. But families are still paying about $1.30 more per gallon than the day Joe Biden took office.
It is no mystery why prices are lower — the economy is in recession. In a thriving economy still emerging from the pandemic, gasoline demand should have increased this summer compared with last summer. It declined nearly 4 percent instead. Americans are driving less because they cannot afford to fill their tanks, pay their bills, and also buy groceries. Demand destruction means lower prices. That is nothing to brag about.
The world is a more dangerous and unpredictable place since Joe Biden took office. It would be foolish to discount the possibility of a severe oil-supply disruption in the future.
But instead of unleashing more American energy, Biden has chosen to use America’s emergency reserves to solve a short-term political problem. In the process, he has jeopardized our energy security and the financial security of American families — and made us more vulnerable to true emergencies.
JOHN BARRASSO — Senator Barrasso is ranking member of the Senate Committee on Energy and Natural Resources.