FRIDAY,APRIL 1 , 2022 .THEWASHINGTONPOST EZ RE A
administrationmustnot put our
future energy securityatrisk fora
short-term attempt to salvage the
president’s plummeting poll num-
bers.”
TheStrategic PetroleumRe-
servehas been alargely bipartisan
project.Itwas establishedafter
the Arab members of the Organi-
zationof thePetroleumExporting
Countries embargoed the United
States becauseofits assistance to
Israel during the YomKippurWar
in 1973. President Gerald Ford
signedthe EnergyPolicyand Con-
servationAct on Dec.22, 1975,
establishingthe reserve.
Carter constructed facilities at
saltdomesusedfor storagealong
the Gulfof Mexico coast, and Pres-
identRonald Reagan continuedto
purchase oil for thestockpile.
At itspeak,the reserve stored
726.6 millionbarrels, butCon-
gress andtheTrumpadministra-
tionsoldoffportionsofitforbudg-
etaryreasons. Thereserve’s inven-
torystood at 568.3millionbarrels
on March 25.
Likemanyprevious draw-
downs,the Biden administration
plans on givingcrudeoil from the
reservetoprivateoil companiesas
partofaswap.The companies
pledgetoreturn the oil at alater
date whenthe crisisis over.
Theadministration’sdecision
cameasmembers of OPEC+—a
combinationofOPECandnon-
OPECoil exporterssuch as Russia
—met Thursdayand reaffirmed
their long-standing plans to
nudgeproductionup432,000bar-
rels aday starting May. Thegroup
saidthatthe oil marketwas “well-
balanced” andthat“current vola-
tilityisnot caused by fundamen-
tals,but by ongoing geopolitical
developments.”
TheUnitedStates hadasked
Saudi Arabiaand the United Arab
Emirates to increaseproduction
by about 2millionbarrels aday,
but relations withthe Saudiking-
domhavebeenfrayed.The Saudis,
whose oilinstallations have been
attacked by Iranian-backed
Houthiforces in Yemen,want U.S.
securityguarantees. Thekingdom
also, as amatterofpolicy, prefers
to keep acushionof about2mil-
lionbarrels aday for even greater
supplydisruptions.
TheInternational Energy
Agencyisset to meetthisweek to
weigh whetheritwillcoordinate
withthe UnitedStatesasitdid in
November.the DefenseProductionAct, ad-
optedin 1950duringthe Korean
War, wouldbeusedto“supportthe
productionand processing”of
mineralssuchaslithium,nickel,
cobalt, graphite and manganese.
Many environmentalists are
tornbetweentheir concern over
mining,and the long-termdam-
ageitcan cause,and theirsupport
for supplyinglargequantities of
minerals for electric vehicles.
Administration officials said
thatthe Defense Department
would implementits authority us-
ing environmental, labor and
community standards.
Drawdownsfromthe Strategic
PetroleumReserveareinfrequent,
but Bidenhas turned to it before.
OnNov.23, Bidenannounced he
wouldwithdraw 50 millionbar-
relsto lowergasolinepricesin
coordination withU.S.alliesto
“address the mismatch”between
supplyand demandduring the
pandemic.Andearlierthismonth,
the EnergyDepartment an-
nouncedplans to release30mil-
lionbarrels of oil fromthe reserve
given the effectofRussia’s
Ukraineinvasion.
Thursday’smove, like the one
earlier thismonth, targetsthe ap-
proximately2million barrels a
dayofRussianoil thatthe admin-
istrationsaysare offthe market
becauseofa“buyer’s strike.”
“With the previousSPR releas-
es, the Biden administrationhas
been targeting price, which
marked abreakfrom priorpolicy
of using stockpile releases to back-
fill amajorsupplydisruption or
refineryoutages,”HelimaCroft,
headofglobalcommoditystrategy
at RBCCapital Markets, saidina
note to investors.
She added thatwith the Biden
administration “promising fur-
thersanctionsifRussia continues
to wagewarin Ukraine, we believe
thatthe SPRreleaseisbeingused
as atool to bluntthe impactof
theseforeignpolicy decisions for
U.S. consumers.”
Republicans, meanwhile, are
pressingBidentoexpand oil drill-
ing in the United States. Sen.Bill
Cassidy (R-La.), amember of the
Senate Energyand Natural Re-
sources Committee, releaseda
statementsayingthat“releasing
additionaloil fromthe Strategic
PetroleumReserve mustbeac-
companied by aplan to increase
production andbackfillthe sup-
ply.”Cassidy saidthat“the Bidened thatcommoditymarketshave
their ownpsychologyand that
fairly smallamounts can have an
impact.
Theadministration also an-
nouncedthatitwouldinvokethe
DefenseProductionActtoencour-
agethe domestic developmentof
critical minerals neededfor pro-
ducingclean energy technologies
suchas batteriesusedfor storing
renewableenergyand in electric
vehicles.
TheaimwouldbetobolsterU.S.
outputand reduce America’s reli-
anceon Chinaand othercoun-
tries. Theadministration saidthatdentialLibrary. He saidthat“ifitis
pairedwith someeffortatconser-
vation,if youask peopletoobey
thespeedlimit,thenthe reserve
[withdrawal] shouldbeenough.”
The1-million-barrel-a-day
drawdownfromthe SPRequals
about1percent of world petro-
leumconsumption, and about
5percentof U.S. petroleum use.
Thoughthe United States is not a
netimporter,the withdrawal of
crudeoil from U.S. reserves will
flow intothe globalmarket and
ease prices,expertssay.
Hakessaidthat“these aren’t
humongous amounts.”But he not-about4percent by theearly after-
noon.
Administration officials have
beenscrambling to devise away to
lowergasoline prices,whichhave
risenasthe UnitedStates and
othernationshavecut backim-
ports of Russian oil andnatural
gas in the wakeofits invasionof
Ukraine.As of Wednesday, the av-
eragepriceofagallonof gasoline
in the UnitedStates was$4.24,
accordingtoAAA,upfrom$3.
per gallonlastmonthand $2.
per gallonlastyear.
Democratsare increasingly
worriedthatinflation in general,
andhighgas prices in particular,
couldhurtthembadlyin the No-
vembermidtermelections when
controlof Congresswill be at
stake. Republicansare seeking to
portrayanAmerica thathas de-
scended intochaosunderBiden,
from risingcrimeto surging im-
migration to troubledschoolsto
spiralingprices.
Bidenhaslong triedto brace
Americans for the economicre-
verberationsof Russia’sinvasion
of Ukrainewhilealso seeking to
makeitclearthatthe Russian
presidentisthe causeof the pain
at the pumpandrising priceselse-
where.His administrationhas re-
peatedlyusedphrases like “Putin’s
pumphike” inpublicmessagingto
underscorethe point,including
on Thursday.
Republicans, meanwhile, have
stressedthatrisingpricesand in-
flation beganbeforeRussia’sag-
gression toward its neighbor,and
accusedthe administration of us-
ing the conflict in Europeasa
coverfor policiesthat have hurt
Americanconsumers.
Biden addressed thatpoint
Thursdaybysaying gas prices rose
initiallybecauseofthe country’s
rapid economic recoveryfromthe
pandemic.
Theadministration has ex-
ploredseveraloptions for keeping
fuel prices low,includingagas tax
holiday anda“windfall profits”
tax on energy companies, accus-
ingthemof pricegouging.
Some experts warned against
overusing theStrategic Petroleum
Reserve, which is designedfor na-
tional emergencies,whileothers
praised Biden’s action.
“I thinkit’s overdue,”saidJay
Hakes, wholed the EnergyInfor-
mationAdministrationduringthe
Clintonadministration andwas
directoroftheJimmyCarterPresi-historic amount of supplyfor a
historic amount of time,asix-
monthbridgetothe fall.”
Bidenfacespolitical pressure to
showheistacklinghighgasprices,
andhe soughtto deflect voters’
anger, blamingRussian President
VladimirPutinfor launching the
war againstUkraine andciting oil
companiesfor leaving drilling
prospects idle and landuntapped.
Thepresident alsonotedthatthe
country’srapidrecoveryfromthe
pandemichadunleashedatorrent
of demand for fuel.
Duringhis 14-minutespeech,
Biden mentionedPutin’s name
aboutadozentimes —“Putin’s
war,” “Putin’s actions,”“Putin’s
price hike” —almostonce amin-
ute.
SayingsomeU.S. oil companies
are puttingprofits overproduc-
tion,hecalledonCongresstoim-
posefeeson companiesthatdo
nottakefulladvantage of theleas-
es allowingthemtoextractoil
fromfederal land.“It’snot the
time to sitonrecordprofits. It’s
timetostepupforthegoodofyour
country,” Bidensaid.
He also framedhis messageasa
callfor sacrifice anddefenseof
democracy, whenAmericansmust
confront Putin’s “brutal”invasion
of aneighboringcountry.Hesaid
this was “a momentofpatriotism,”
notjustforcompanies,butalsofor
American consumerscontending
with higherprices.
“Wecan free ourselves fromour
demandfromimported oil from
acrossthe world,”Bidensaid, urg-
ingCongresstopass legislation
that wouldmakeAmerica less sus-
ceptible to oil pricefluctuations.
“Look, Iknowgas pricesare pain-
ful. ...I’lluse everytoolatmy
disposal to protectyou from[ris-
ingprices].”
Bidenalsosaidthathewould
adopta“use it or loseit” policy to
makeoil andgas companies pay
for drilling prospects that are be-
ingleftidlerather than explored.
Asenioradministration official
saidthatthe firstbarrels from the
strategic reserve would hit the
market in Mayand thatthe draw-
downwould serve as “a bridge” to
greatersupplies. He said thead-
ministration is “committed to re-
stocking thereserve oncewe’re
throughthis emergency.”
Thepriceofcrude oil on U.S.
and international marketsfell
BIDENFROMA
Unprecedentedrelease from reserve aims to make up for the loss of Russianoil
DEMETRIUSFREEMAN/THEWASHINGTONPOST
OfficialssaidthewithdrawalapprovedbyPresidentBiden,seenat
theWhiteHouseonWednesday, wouldcontinueforsixmonths.Source:Bloomberg KATERABINOWITZ/THEWASHINGTON POSTGaspriceshave risen sharplysince Russia’sinvasion
of Ukraine
Averagenational daily pricesforregular unleadedgasoline2018 2019 2020 2021 2022123$$4.Russia invades
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