US to unleash strategic oil reserves to lower prices
US President Joe Biden unveiled a two-pronged plan on Thursday to lower gas prices by increasing supply and decreasing demand, vowing to lead the country to a future of clean energy while soothing its immediate wounds by unleashing millions of barrels from its strategic reserves.
A “use it or lose it” policy would see Washington punish US oil companies by charging them fees for federal leases they hadn’t drilled on in years, Biden explained. Oil and gas companies are also obligated to use what they have, the president said, pointing to 9,000 unused but approved production permits for federal lands, amounting to more than a million unused acres that US oil and gas companies supposedly have the right to exploit.
If they don’t use the land, Biden suggested, they should pay up. “For US oil companies that are recording their largest profits in years, they can put those profits to productive use by producing more […] restarting idle wells, or producing on the sites they are already leasing.” American families, the president said, “can’t afford to let oil companies sit on their hands.”
What they shouldn’t be doing, he argued, is shipping those profits to investors – $80 billion in the last year alone, he claimed, and likely to increase in 2022. While insisting he was a “capitalist,” Biden chided oil companies for cashing in over “Putin’s price hike” while Americans struggled to put food on the table.
“I have no problem with corporations turning a good profit,” Biden insisted, but “investing those profits in production and innovation, that’s what they should do. Invest in your customers. It’s not [just] the patriotic view; it’s good for your business as well.”
Biden eventually acknowledged that getting oil production restarted took time, but promised to release one million barrels per day from the nation’s strategic oil reserves over the next six months, amounting to 180 million barrels, as a stopgap measure.
This bounty would be temporary, Biden warned, stating that ultimately the US and the rest of the world would have to wean itself off fossil fuels and speed the transition to a “clean energy future that’s made in America with American products and American values.” To get that project off the ground, the president announced he would be using the Defense Production Act to secure an American supply chain for electric vehicle batteries and the minerals needed to make them: lithium, graphite, nickel, and other elements that are scarce in the US but abundant in countries like Russia and China.
Biden, troublingly, did not explain how specifically the Defense Production Act would secure a supply chain for these minerals, and suggested that the country would be involved in spreading the gospel of green energy, exporting those technologies around the world.
He admitted his ideas had come from America’s 11 largest utility companies, whose CEOs visited him earlier in the month, but insisted they had told him energy savings would show up in families’ bills immediately and promised a $6,500 per home payment for families to weatherize their homes.
As for the reasons behind the US’ fuel problems in the first place, Biden blamed first the Covid-19 pandemic for sending the demand for oil plummeting, then the “strength and speed of our recovery” for sending it soaring skyward once again. He ultimately settled on Russian President Vladimir Putin as the real source of Americans’ troubles and the reason why gas rose over a dollar per gallon in many cities as soon as the first Russian soldier set foot in Ukraine.
“Our family budgets, your family budgets, none of it should hinge on whether a dictator declares war,” Biden lamented. While the US gets less than 3% of its oil from Moscow, Biden has repeatedly linked the spike in fuel prices directly to his embargo on Russian oil and gas, eager to be seen as the one dealing out punishment to Russia.
Biden also promised he would not be dissuaded from his plan, revealing he was “open to deals to strengthen the plan but I will not be put off.” He would do whatever was necessary “to protect you from Putin’s price hike,” Biden said, declaring “Americans can’t afford [politics] right now,” but that “we’re the only nation that has turned every crisis we’ve ever faced into an opportunity.”
