Tag Archives: Strategic Petroleum Reserve

Upending National Security For Political Purposes

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On Tuesday, The Conservative Review reported that the Biden administration has plans to sell another 26 million barrels of oil from the Strategic Petroleum Reserve.

The article reports:

The barrels are set to hit the market from April to June, just as fuel prices are predicted to increase due to the summer driving season.

“Biden is front-loading SPR barrels to avoid a summer gasoline price spike,” Phil Flynn, an analyst at Price Futures Group, told Fox Business Network. “There are growing concerns among the Biden administration that gas prices are headed back to $4 a gallon, and the president is fearful of the political heat he will have to take.”

“By pushing barrels forward from previously announced sales he is robbing Peter to pay Paul but is discouraging future U.S. oil and gas investment,” Flynn added. “There should be some backlash from Republicans who are getting tired of using the SPR for political purposes and creating short-term price relief in exchange for much higher prices down the road.”

This is happening at the same time the Biden administration is restricting oil exploration and drilling in the United States (which would be a much more reasonable way to bring down the price of gasoline).

The article notes:

When Biden took office, there were 638 million barrels in the SPR. As of this month, there are approximately 371.6 million barrels, the lowest amount since December 1983. With the latest announcement to sell another 26 million barrels, inventory will drop to 346 million, the lowest since August 1983.

The House recently passed bills that would restrict future sales of reserve inventory, including preventing the federal government from selling oil reserves to the Chinese government. The Republican majority in the House also passed legislation that would increase production in the United States by requiring the Department of Energy to develop a plan to allocate more federal land for oil and gas leasing prior to initiating a non-emergency drawdown from the SPR.

This is not intelligent American energy policy.

Preparing For Emergencies

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The Strategic Petroleum Reserve is one of many items America has to keep us safe in times of emergency. Unfortunately, the Biden administration has been very quick to tap into that reserve to lover gasoline prices and save Americans money at their local gas statios

However, actions have consequences.

On September 7th, Forbes reported:

What is the U.S. Strategic Petroleum Reserve (SPR)? What are the implications of depleting the SPR, which the U.S. has been doing now since 2016? Further, what has been the impact of the rapid drawdown of the SPR that has taken place this year? Let’s discuss.

In December 1975, with memories of gas lines fresh on the minds of Americans as a result of the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). The law was designed “to reduce the impact of severe energy supply interruptions” such as that caused by the embargo.

Over time the U.S. government began to fill the reserve. At its high point in 2010, the level reach 726.6 million barrels. Since December 1984, the level has never been lower than 450 million barrels — until now.

That is disturbing.

The article includes the following chart:

Meanwhile, on Tuesday, NewsMax reported:

The United States plans to release an additional 10 million to 15 million barrels of oil from the country’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing, a Bloomberg reporter tweeted late on Monday.

The White House also plans to replenish the U.S. strategic petroleum reserve, the tweet said.

The Biden administration also has beeen speaking with energy companies as it considers its strategy to use the Strategic Petroleum Reserve to both push down oil prices for consumers and support longer-term demand for producers, two sources familiar with the matter told Reuters.

If the Biden administration wants to lower gasoline prices, all they have to do is open America to drilling. However, the green energy lobby would no longer support them if they did that. It’s time to do what is right for the American people.

It Hasn’t Worked Yet

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On Sunday, The Daily Caller reported that the three times that President Biden has released fuel from the Strategic Petroleum Reserve the price of gasoline has gone up. I don’t think his solution is working.

The article reports:

Biden ordered a 50-million-barrel SPR release in November, a 30-million-barrel release on March 1 and a 180-million-barrel release on March 31, saying the “historic” actions would ease pressure felt by Americans at the pump. But marketplace and government data analyzed by The Daily Caller News Foundation paint a different picture.

On Tuesday, the average price of gasoline reached an all-time high of $4.59 per gallon, according to AAA data, while domestic oil prices remained above $110 a barrel, far higher than their 2015-2021 average of $53.15 per barrel and 2021 average of $68.14 a barrel, Federal Reserve data showed.

Release 1: Nov. 23, 2021

Oil price: $76.75 a barrel.

Gasoline price: $3.40 per gallon.

The article concludes:

Finally, Biden announced the largest release to date on March 31, ordering the DOE to release 180 million barrels of oil from the SPR between April-September. The president said the move would provide a “historic amount of supply for a historic amount of time” and act as a “six-month bridge” to the fall.

“The action I’m calling for will make a real difference over time,” he said during remarks titled “Actions to Lower Gas Prices at the Pump for American Families.”

Biden then predicted gas prices would fall 10-35 cents a gallon.

However, the price of oil declined substantially from $107.82 a barrel on March 30 to $100.28 per barrel on March 31. Oil prices remained near that level through April and early May before increasing again and hitting $114.20 per barrel on May 16.

Gasoline prices followed a similar trajectory as oil prices, declining through April before skyrocketing in mid May and hitting multiple all-time highs.

Those of us who studied economics at some point are familiar with the law of supply and demand. Most Americans understand that if the government opens up drilling in America, we can again be energy independent and enjoy the benefits of that independence. Aside from lower prices at the gas pump, businesses are more likely to relocate to places that have cheap, dependable energy. We saw that during the Trump administration. The Biden administration’s war on fossil fuel has cost Americans dearly at the gas pump, in international relations, and in the ability to attract manufacturing jobs to America. The Biden administration is destroying America’s middle class and the American economy in the name of an industry that has not yet been proven to work. As Americans face rolling blackouts this summer, I hope many of them will reconsider some of their recent voting habits.

Taxing Those That Keep The Economy Growing

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On Sunday, NewsMax posted an article about President Biden’s tax proposal.

The article included some comments by former President Donald Trump’s White House economic adviser Larry Kudlow.

The article reports:

“Why would Joe Biden put out a budget that raises taxes 36 times?” Kudlow lamented to Sunday’s “The Cats Roundtable” WABC 770 AM-N.Y., adding a rebuke of Biden’s proposed “confiscation of wealth by taxing unrealized capital gains.”

“He is attacking the businesses that hire the workers, and he’s attacking the investors who come up with the new technologies and innovations that make America great, and he’s also attacking the fossil fuel companies that would get us out of this oil mess,” Kudlow continued to host John Catsimatidis. “I don’t understand the budget.”

“Why do you want to undermine the prosperity by jacking up taxes on everything that moves?”

And all this comes as Biden is burning the strategic oil reserve for “political price-fixing,” according to Kudlow.

“He is depleting a third of the strategic reserve for political price-fixing,” he said. “That’s all it is. It’s not going to work.”

It is merely a temporary solution to a system problem Biden energy policy has created – predictably – Kudlow said.

“It’s a drop in the bucket,” he said. “The strategic reserve is there in case you have a national emergency such as a hurricane blowing up Texas oil fields.”

Biden’s war on energy is bad policy for economics and the environment, Kudlow concluded.

“We could supply the whole bloody world with liquefied natural gas and stop the dirty coal in China and India,” he said, “if we had a sensible policy.”

Larry Kudlow is asking some very good questions and has some very good solutions to some of the problems we are currently facing.

Sometimes You Just Wonder What Reality Some People Live In

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Gas Pump 3 - Charles River Museum of Industry,...

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How do you feel about what you are paying these days to fill up your gas tank? Do you think anyone in Washington cares about how much you are spending? Well, there has been some interesting testimony in Congress recently.

Ed Morrissey at Hot Air posted an interesting article on recent testimony by Energy Secretary Stephen Chu.

The article reports:

When asked by Rep. Alan Nunnelee whether the Obama administration wants to work to get gas prices to come back down, Chu replied that they’re not focusing on that — and that higher gas prices mean more of a push for the alternative energy sources the administration wants to push. 

As I have stated before–I don’t have a problem with alternative energy sources–however, those sources will develop naturally as they become cost-effective. The market needs to left alone so that the most efficient sources are developed. Government subsidies and interference simply muddy the waters and prolong the process.

The Heritage Foundation stated:

As shocking as his remarks are, they shouldn’t come as a surprise. Chu has a long record of advocating for higher gas prices. In 2008, he stated, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Last March, he reiterated his point in an interview with Fox News’ Chris Wallace, noting that his focus is to ease the pain felt by his energy policies by forcing automakers to make more fuel-efficient automobiles. “What I’m doing since I became Secretary of Energy has been quite clear. What I have been doing is developing methods to take the pain out of high gas prices.”

One of those methods is dumping taxpayer dollars into alternative energy projects like the Solyndra solar plant. Another is subsidizing the purchase of high-cost electric cars like the Chevy Volt to the tune of $7,500 per car (which the White House wants to increase to $10,000). In both cases, those methods aren’t working. Solyndra went bankrupt because its product couldn’t bear the weight of market pressures, and Chevy Volts aren’t selling, even with taxpayer-funded rebates. What’s the president’s next plan? Harvesting “a bunch of algae” as a replacement for oil.

Meanwhile, the Obama Administration is seemingly doing everything it can to make paying for energy even more painful by refusing to open access to the country’s oil and gas reserves and blocking new projects that would lead to the development of more energy in America. Case in point: the president’s decision to say “no” to the Keystone XL pipeline, a project that would have delivered hundreds of thousands of barrels of oil from Canada to Texas refineries, while bringing thousands of jobs along with it.

High gasoline prices take a toll on all areas of the economy. They cause inflation in food prices and all other goods.

The article at Hot Air points out:

Congressional Democrats are ramping up pressure on President Obama to tap the Strategic Petroleum Reserve (SPR) to prevent rising gas prices from threatening the economy and their election-year prospects.

They are growing anxious that the price of fuel could reverse their political fortunes, which had been improving due to signs of growth in the economy.

Republicans have hammered Democrats on the price spike, repeatedly noting that gas prices — now at $3.72 per gallon for regular — have doubled since Obama won the White House.

Even if their motives are less than pure, it is nice to know that Democrats are at least aware that high gasoline prices are a problem for most Americans.

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Moving Oil By Using Foreign Ships

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Yesterday’s New York Times reported yesterday that when President Obama released oil from the Department of Energy’s Strategic Petroleum Reserve in June, he enlisted foreign ships to move the oil.

The article reports:

The domestic ship owners say that 46 times the administration has waived the Jones Act, a 90-year-old law requiring purely domestic cargo to move on United States-flagged ships except under extraordinary circumstances. Only once this summer has oil from the reserve moved on American barges. 

Even as unemployment hovered over 9 percent, the administration approved dozens of applications to transport nearly 30 million barrels of domestic crude oil within the borders of the United States on tankers employing foreign crews and flying the flags of the Marshall Islands, Panama and other countries. 

Government officials defended their actions by saying that America did not have large enough vessels to move the oil quickly in large quantities. It would have cost more and taken longer to use American ships. American maritime operators stated that they feel that the oil could have been broken down into smaller lots and shipped on American ships.

The Obama administration may have meant well when it released oil from the Strategic Petroleum Reserve, but it missed an opportunity to give jobs to Americans who need them.

 

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