In another effort to curb escalating gas prices, the Biden administration has announced plans to release 1 million barrels of gasoline from a reserve located in the Northeast. The reserve was established in the aftermath of Superstorm Sandy and will now be gradually depleted in increments of 100,000 barrels through a competitive bidding process. This decision is in line with a Congress-mandated sale of the reserve and its subsequent shutdown, as stipulated in a spending deal passed back in March.
The Department of Energy has asserted that this move will offer some relief to American families and consumers during the peak summer driving season. However, considering that average gasoline prices are currently at $3.60 per gallon nationwide – an increase of 6 cents from last year according to AAA – this so-called relief seems rather insignificant. It appears that President Biden is resorting to tapping into reserves as a last-ditch effort to manage inflation, which could potentially harm his party’s chances in an upcoming election year.
Energy Secretary Jennifer Granholm has underscored the administration’s commitment towards reducing gas prices. Yet, one can’t help but question whether releasing reserves between Memorial Day and July 4th is genuinely about ensuring adequate supply or merely another political tactic. White House Press Secretary Karine Jean-Pierre also praised this as part of Biden’s efforts to lower energy costs, citing previous actions like the release of the Strategic Petroleum Reserve and investments in clean energy.
Massive, illegal, unfair wealth transfers, punishing the 80%+ of Americans who didn’t go to college / didn’t accrue debt / paid off their loans: https://t.co/wxWH7hj41m
— Guy Benson (@guypbenson) May 22, 2024
The Biden administration faced considerable criticism for its previous decision in 2022 to drain the Strategic Petroleum Reserve following Russia’s invasion of Ukraine. Despite claims that this action helped stabilize gas prices, it was yet another instance of a short-term solution. The administration is currently refilling the reserve, which costs $19 million annually to maintain and holds over 367 million barrels of crude oil.
The Republican party has consistently expressed opposition towards the Northeast reserve, arguing that any such stockpile should be established by Congress. A 2022 report from the Government Accountability Office also suggested that the reserve would provide minimal relief during a severe gasoline shortage. Analysts like Patrick De Haan of GasBuddy question its effectiveness, noting that it amounts to only about 2.7 hours of total U.S. gasoline consumption and requires regular rotation due to gasoline’s limited shelf life.
reckless & transparency political, like so many of his team’s actions https://t.co/Si3ZdKMvb8
— Guy Benson (@guypbenson) May 22, 2024
De Haan has also highlighted that the reserve does not contain sufficient quantities of oil for a real emergency. This further strengthens the Republican party’s call for a long-term strategy led by Congress. However, the Biden administration continues to utilize it as a quick-fix solution to provide immediate relief during periods of rising gas prices.
Despite criticism and doubts regarding the effectiveness of the Northeast reserve, Biden has proceeded with the sale. De Haan predicts that this will have a minimal impact on nationwide gas prices but may slightly decrease prices in the Northeast region. The Energy Department maintains that the reserve must be transferred or delivered by June 30th, enabling retailers to sell gasoline at more competitive prices before July 4th. Yet with reserves only sufficient to supply a small fraction of U.S. consumption, it is evident that this is another short-sighted move from an administration seemingly more concerned with appearances than effective solutions.
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