The Biden administration is releasing oil from the nation’s Strategic Petroleum Reserve in an effort to address rising gas prices ahead of the holiday season, the White House said in a statement Tuesday.
As part of the move, the Department of Energy will make available 50 million barrels of oil to lower prices and address the mismatch between consumer demand and supply amid the pandemic, the White House said.
The decision was made jointly with other major energy consuming countries — including India, Japan and South Korea — to curb increasing energy prices after oil-rich nations rejected repeated calls to increase production as the global economy rebounds from the pandemic and fuel demands rise.
Nov. 21, 202101:40
“The increase in gas prices has occurred because global oil supply has not kept pace with global oil demand as the economy has recovered from the pandemic and as countries and companies have held back on supplying oil, and because the declines in oil prices that we have seen have not translated into lower prices at the pump,” a senior administration official said in a call with reporters. “The president is taking action on both fronts and is committed to using every tool as needed.”
Gas prices in the U.S. ahead of Thanksgiving are averaging $3.42 a gallon, the highest since 2014. Parts of the country are experiencing sharper increases, including California where prices are over $4.50 in some areas. More than 48 million people are expected to travel by car over the Thanksgiving holiday, according to predictions by the motorist assistance company AAA.
The White House has attempted to address gas prices as concerns about inflation have increasingly become a criticism of Biden’s presidency.
Biden and other administration officials have pressured the Organization of the Petroleum Exporting Countries alliance, led by Saudi Arabia and Russia, to pump more oil and in hopes it would lower gas prices. OPEC, whose member countries collectively represent roughly 77 percent of all crude oil reserves, has declined to ramp up production, sticking to their plan for modest monthly increases.
Biden also asked the Federal Trade Commission last week to investigate what he described as “anti-consumer” behavior by oil and gas companies and whether it could have led to increased gas prices.
The Strategic Petroleum Reserve was established after the oil crisis of the 1970s as a national energy safety net. The emergency crude oil is stored in four underground salt caverns along the Texas and Louisiana coasts. The four sites currently hold roughly 620 million barrels of crude oil, the largest emergency supply in the world. The reserve is capable of supplying all of the U.S.’s consumption needs for roughly one month.
The president can order a full drawdown of the reserve in the event of a severe energy supply interruption and can also order a limited drawdown — up to 30 million barrels — to address short-term emergency needs.
Since its establishment, only three presidents have directed the release of oil from the Strategic Petroleum Reserve.
President Barack Obama directed the released of 30 million barrels in 2011 to offset supply disruptions caused by Libya’s civil war; President George W. Bush released 11 million barrels in 2005 to help refiners hurt by Hurricane Katrina; and President George H.W. Bush in 1991 released 17 million barrels in response to the Gulf War.
Source: | This article originally belongs to Nbcnews.com
