- The Washington Times - Tuesday, November 23, 2021

President Biden plans to release 50 million barrels of oil held in the U.S. Strategic Petroleum Reserve in an attempt to slash sky-high fuel prices on the cusp of the holidays, the White House said Tuesday.

The White House said China, India, Japan, the Republic of Korea and the United Kingdom will tap into their reserves as part of a coordinated effort.

“This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices. Over the last several weeks as reports of this work became public, oil prices are down nearly 10%,” the White House said.

Mr. Biden said 32 million barrels eventually will be returned to the strategic reserve. The other 18 million have been authorized by Congress for sale.

Republicans scolded Mr. Biden for reaching into reserves that are meant for national emergencies as he faces political pressure over the rising cost of everything from gasoline and milk to Christmas toys.

Energy Secretary Jennifer M. Granholm said post-pandemic market forces were to blame for higher prices at the pump, requiring governments around the world to act.

“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” Ms. Granholm said. “This action underscores the president’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.”

Ms. Granholm said Mr. Biden’s long-term strategy is to “go green” and expand renewable energy in place of fossil fuels. She expects the oil market to “correct itself” and prices to ease by 2022 but said Mr. Biden had to find a way to ease the pain now.

“The fact is right now energy prices at the pump and at home are too high,” she said from the White House briefing podium.

She said the oil supply will be released gradually and result in a drop in prices, though she declined to say when, exactly, consumers will see a difference.

“This is the largest amount that we’ve ever [released]. It won’t happen tomorrow, but it will happen over the next few weeks that people hopefully will start to see the difference,” she said.

Mr. Biden’s decision to tap the reserve comes after days of speculation that major economies would join forces in a bid to drive down prices.

South Korea’s foreign and energy ministers said it accepted the U.S. plea “considering the need for international coordination on global oil prices, [the] importance of the S. Korea-U.S. alliance and participation of major economies.”

State-run media in China interpreted the move as a sign that Mr. Biden must rely on Beijing to fix problems at home.

“With so many voices calling the Biden administration ‘economically incompetent,’ some political analysts believe that inflation could be enough to ruin the Democratic Party in the midterm elections if prices stay high,” an editorial in the Global Times said. “As a result, the Biden administration will have to turn to China again. This is a direction that benefits everyone, but China clearly has the upper hand.”

Mr. Biden’s partnership sets up a clash with OPEC, which may reassess market conditions and respond by withholding plans to ramp up oil production.

The so-called OPEC+ group, which includes OPEC members such as Saudi Arabia and other major energy exporters such as Russia, are set to meet Dec. 2 to discuss production targets. So far, they have given no sign they will boost production to ease the price pressures in the market.

The market standard Brent crude was trading above $80 a barrel on Tuesday, up from its levels before the U.S. announcement but down slightly from last month’s three-year high of more than $86.

Senior Democrats, including Senate Majority Leader Charles E. Schumer, had been pleading with Mr. Biden to provide relief.

“President Biden’s announcement is good news for American families and will strengthen our economy,” the New York Democrat said. “Tapping the SPR will provide much-needed temporary relief at the pump and will signal to OPEC that they cannot recklessly manipulate supply to artificially inflate gas prices. Of course, the only long-term solution to rising gas prices is to continue our march to eliminate our dependence on fossil fuels and create a robust green energy economy.”

GasBuddy.com, a prominent price-tracking website, said Monday that gas prices had fallen for two straight weeks and stood at $3.39 per gallon.

The national average is up 2.8 cents from a month ago, however, and $1.30 per gallon than a year ago, it said.

“While there’s reason to be optimistic that the peak of gas prices will soon be behind us, the decline in the price of oil is likely reflecting the possibility of a coordinated global release of oil from strategic reserves,” Patrick De Haan, head of petroleum analysis for GasBuddy, said ahead of Mr. Biden’s announcement.

Sen. Kevin Cramer, a Republican from North Dakota — a key oil and gas producer — said Mr. Biden should “provide regulatory certainty” and focus on domestic production instead of tapping a reserve meant for emergencies.

“The only national emergency is President Biden’s awful energy policy in which he has purposefully curtailed American production and then embarrassingly pleaded with OPEC to make up the difference,” he said.

Former President Donald Trump, meanwhile, took credit for filling the reserve while oil prices were low and said Mr. Biden is at the mercy of OPEC.

“I filled them up three years ago, right to the top, when oil prices were very low. Those reserves are meant to be used for serious emergencies, like war, and nothing else,” Mr. Trump said. “Now I understand that Joe Biden will be announcing an ‘attack’ on the newly brimming Strategic Oil Reserves so that he could get the close to record-setting high oil prices artificially lowered.”

Mr. Trump did, however, sign major legislation that calls for future sales of oil from the strategic reserve to pay for GOP initiatives.

His 2017 tax overhaul said the secretary of energy “shall draw down and sell from the Strategic Petroleum Reserve 7,000,000 barrels of crude oil during the period of fiscal years 2026 through 2027” and deposit the proceeds in the Treasury.

Just before Mr. Trump took office, then-President Barack Obama signed the bipartisan 21st Century Cures Act, which required the sale of 25 million barrels of crude oil from the reserve in 2017-2019 to pay for provisions relating to the National Institutes of Health.

Mr. Biden’s move is different in that it is intended to ease the pain on consumers. President Bill Clinton made a similar move in 2000 to counter high prices on the cusp of the home-heating season in an election year, prompting then-presidential candidate George W. Bush to charge it was designed to help his opponent, Vice President Al Gore.

Mr. Bush said the reserve is “an insurance policy meant for sudden disruption of oil supplies or for war” — charges that are similar to the ones GOP figures leveled at Mr. Biden.

The Biden administration said the congressionally authorized sale of 18 million barrels should not be viewed as an “emergency release,” but as a bridge to help consumers get to a period when oil prices retreat as the world shakes off shocks from the COVID-19 pandemic.

“The OPEC+ [countries] have said that they are planning to release an additional 400,000 barrels a day, starting in December, and our hope and expectation is that they will continue on that course,” a senior official told reporters in a conference call.

Also Tuesday, the White House said Mr. Biden still wants the Federal Trade Commission to continue its investigation into whether chicanery in the oil and gas markets is keeping prices high.

“Even as the president is helping to lead the world in addressing oil supply imbalances, he is also focused on how consolidation in the oil and gas sector may be resulting in anti-competitive practices that keep American consumers from benefitting when oil prices fall,” the administration said. “There is mounting evidence that declines in oil prices are not translating into lower prices at the pump.”

• Tom Howell Jr. can be reached at thowell@washingtontimes.com.

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