On Tuesday, the U.S. Department of Energy (DOE) announced it would sell 1 million barrels of gasoline, equivalent to 42 million gallons, from the Strategic Petroleum Reserve (SPR) by July 4. Largely affecting “Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey and Pennsylvania.”
“The Biden-Harris administration continues to take strategic action to lower prices in every aspect of life for American consumers, especially as we head into the summer driving season,” said U.S. Secretary of Energy Jennifer Granholm. “By July 4th, By releasing this reserve before 2020, we can ensure adequate supply to the Northeast when hardworking Americans need it most.”
But the sale isn’t a generous gesture – in fact, it’s required by law. Unless the goal is to shore up President Joe Biden’s shaky re-election bid, it’s hard to see how much of an impact the bill will have.
Section 308 of the Consolidated Appropriations Act of 2024 provides that “the Secretary of Energy shall withdraw and sell 1 million barrels of refined petroleum products from the Strategic Petroleum Reserve in fiscal year 2024” and then “close the Northeast Gasoline Supply Reserve.” Cato Institute “The administration is taking credit for the policies enacted by Congress,” said senior researcher Peter Van Doren, in response to the Energy Department’s touting of the sale.
The Northeast Gasoline Supply Reserve was established in 2014. for future emergencies. (The SPR itself was created in 1975 to hold crude oil to provide support for future supply shocks after a decade of oil embargoes.)
But Reuters noted in May that “storing refined fuels is more expensive than storing crude oil,” so Congress eliminated the stockpile in the 2024 spending bill.
Not only is the sale required by federal law, but 1 million barrels of natural gas is really just a drop in the bucket.
U.S. motorists consumed nearly 9 million barrels of gasoline per day in 2023, and more than 9 million barrels per day in May, June, July and August, according to the Energy Information Administration. “Production in the Northeast and Mid-Atlantic region is about 2.5 million barrels,” Van Doren said. reason. Therefore, the additional 1 million barrels represents only 40% of the target region’s single-day supply.
Natural gas prices are already falling: On Tuesday, the day the Energy Department announced, Gas Partner According to reports, gas prices will be lower on July 4 this year than on any other holiday during Biden’s presidency. Reuters noted in May that the DOE “will sell to well-supplied markets” and attributed the healthy supply and lower prices to “increased refinery production and softening fuel demand.”
Still, Biden’s political opponents have accused the president of manipulating gasoline stocks for political gain.
Former President Donald Trump told reporters in May that Biden was releasing fuel “to lower prices at the pump before the election… Prices are higher than they have been for a long time, very high,” so he tried to block it This situation, because high gas prices are not conducive to elections.
“Under the Biden administration, the SPR has been abused for political purposes in an attempt to reduce record-high gas prices,” Rep. Kathy McMorris Rogers (R-Wash.) and Sen. John Barrasso (R-Wash.) Wyoming Republican) accused in a statement. “We urge you in the strongest terms to put the nation’s energy security first and stop the misuse of strategic petroleum reserves for political purposes.”
Unfortunately, there is a long tradition of manipulating strategic public relations for political purposes. In 2000, former President Bill Clinton released 30 million barrels of oil from the SPR just weeks before the 2000 election, when his Vice President, Al Gore, was a presidential candidate. Gore’s opponent, George W. Bush, criticized the move, saying strategic public relations “should not be used to gain short-term political gain at the expense of long-term national security.” In 2006, Bush suspended reserve deposits ahead of that year’s midterm elections in response to rising gas prices to increase supply.
Trump proposed selling half of the oil reserves in his 2017 budget proposal to reduce the federal budget deficit, then announced in 2020 that the government would buy crude oil to bail out oil companies suffering from the effects of the COVID-19 pandemic.
