The Biden administration plans to release 15 million barrels from US emergency reserves and may consider freeing up significantly larger additional supplies this winter as it tries to ease high gasoline prices that have become a liability for Democrats in next month’s midterm elections.
President Joe Biden will announce the plan Wednesday, senior administration officials told reporters on condition of anonymity to preview his remarks. It’s the final tranche of oil from a program the White House began in the spring to release a total of 180 million barrels of crude from the Strategic Petroleum Reserve to address high gas prices stemming from Russia’s invasion of Ukraine among other factors.
The president is also prepared to conduct additional, significant SPR sales this winter if conditions require it, according to a senior administration official. Biden will speak at 1:15 p.m. Washington time, the White House said.
“We think that this will make some difference,” National Economic Council Director Brian Deese said Wednesday in an interview with Bloomberg Television. “We’re going to keep at it. Keep a close eye on these things with an understanding that we have these tools on the table, and we’ll deploy them when it’s in America’s interest.”
In addition, the White House announced new details on its plan to replenish the emergency stockpile, which has the capacity to hold about 714 million barrels and contained 405.1 million barrels as of Oct. 14. The administration plans to initiate purchases when West Texas Intermediate crude prices are at or below $67 to $72 per barrel, according to a senior administration official.
The Energy Department on Wednesday will issue notice that the 15 million barrels from the original tranche will hit the market in December. A decision will be made next month whether additional releases are needed in January, the official said.
The department is also finalizing a rule announced in May enacting a new buyback method to allow for a “competitive, fixed-price bid process,” with prices potentially locked in well before crude is delivered. The plan is designed to save taxpayer money while sending a signal to the market about the US government’s intention to refill its reserves, according to officials.
The White House announced the sale as it responds to rising costs at the pump amid factors that include OPEC+’s decision to slash production targets by 2 million barrels a day and volatile oil prices following Russia’s invasion of Ukraine.
Republicans have used gasoline prices, one of the most visible signs of inflation, as a cudgel against Biden and Democrats. Polls show the economy has re-emerged as a top issue for voters after the Supreme Court’s decision ending nationwide abortion rights and a Justice Department investigation into former President Donald Trump energized Democrats over the summer.
Republican Representative Cathy McMorris Rodgers slammed the move in a statement released early Wednesday.
“Instead of using the SPR for political bailout and empowering America’s adversaries, President Biden should end his war on American energy and join Republican efforts to reclaim our energy dominance,” the Washington state lawmaker said.
In remarks from the White House on Wednesday, Biden plans to reinforce warnings he has issued in recent weeks to oil companies against raising pump prices, a senior administration official said.
The national average price for regular unleaded gasoline was $3.87 on Monday, down from $3.92 last week, according to data from the American Automobile Association. That’s down from a peak of $5.02 in June.
Separately, the administration is still weighing limits on exports of fuel to keep more gasoline and diesel inside the US, an idea that has sparked division within the administration. Although no timeline has been set for a decision on that potentially more dramatic step, it isn’t expected to happen before November’s midterms, according to a person familiar with the matter.
“At this moment when we have uncertainty and uncertainty for American consumers, we have to keep all options on the table,” Deese said Wednesday when asked about an export ban, adding, “That’s what we’re doing.”
In March, Biden unveiled his plan to discharge the 180 million barrels in total to stem the surge in prices for consumers. To date, about 165 million barrels have been delivered or put under contract since the program was put into effect.
