President Biden’s energy policy is underwhelming, costly and dangerous. Since January 2021, gas prices have been rising, even before Russia invaded Ukraine, because of Biden’s efforts to halt U.S. oil and natural gas production and his unsuccessful efforts to beg and plead with OPEC, and our adversaries, to increase oil production. While Biden’s #putinpricehike hashtag may sound catchy, it is just not true.
What is true is that depleting the U.S. Strategic Petroleum Reserve (SPR) to lower gas prices is a desperate political effort to win the midterm elections. By the end of 2022, the Biden administration will have released 180 million barrels of oil from the SPR, amounting to a mere nine days of U.S. oil consumption — hardly enough to lower gas prices but enough to hurt one of our most important national security assets.
The SPR, and the dedicated career civil servants who keep it mission-ready, was put in place to protect our nation from crude oil supply disruptions such as the 1970s oil embargo and natural disasters like hurricanes. During my tenure at the Department of Energy (DOE), releases were approved to ease crude oil supply disruptions during Hurricane Harvey. During the height of the COVID pandemic, DOE offered the SPR for crude oil storage to remove excess oil from the market — easing oversupply concerns due to the drop in crude oil demand. But when our nation’s crude oil reserves are depleted and not refilled, the U.S. becomes further dependent on our adversaries for our energy needs.
Biden claims that he wants to refill the SPR at an estimated cost of $23 billion. Does he really think Congress will give him the money? For comparison, when I was at DOE, during the height of COVID the price of oil plunged. At that time, we asked the Congress for $3 billion to buy oil and fill the SPR. Senate Majority Leader Chuck Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) said no. They accused us of trying to “bail out” big oil. To the contrary, our proposal was to buy from small producers that were laying people off and had no place to sell their oil. Had the Democrat-controlled Congress said yes, we would have bought oil at about $30 per barrel and Biden could have sold it at $100 per barrel — making a rare profit for the American taxpayer.
In addition, Biden’s politically-motivated SPR releases hurt its physical infrastructure; the Reserve was not made for repeated releases and refills. Not to get too technical, but at each of the four SPR sites — two in Texas and two in Louisiana — crude oil is stored in underground salt caverns. When oil is released from the SPR, freshwater is pumped into the cavern, displacing oil into pipelines. Each time water is pumped in, the water degrades the walls of the salt caverns, shortening the finite life of one of our nation’s most strategic national security assets.
The Biden administration’s use of the SPR for political purposes is reckless at best and, at worst, violates the legal intent behind its creation. Right now, we find ourselves in a position that was 100 percent avoidable. Our nation’s leaders have let ideology get in the way of common sense. In January 2021, America was energy independent. We did not need to beg OPEC to increase output, because the U.S. energy industry, powered by hard-working Americans, was producing a net surplus. The price of a gallon of gasoline was $2.40.
If Biden is serious about lowering energy prices, including gasoline, natural gas and electricity, he would unleash American energy production back to where it was just a few years ago and stop using the SPR for desperate, political purposes. But I don’t see common sense prevailing anytime soon. Instead, American families and businesses will pay unnecessarily high gas and electricity prices, and an asset of strategic national importance — the SPR — will continue to have its value eroded.
Steven Winberg is the former Assistant Secretary of Fossil Energy at the U.S. Department of Energy, where he oversaw the Office of the Strategic Petroleum Reserve.