Yes, it’s true, prices at the pump have decreased this summer, as Americans cut back on travel, therefore lessening demand, and President Joe Biden drained the U.S. Strategic Petroleum Reserve (SPR) to help increase supply.
Under Mr. Biden’s watch, the SPR has been exhausted from 640 million barrels to 450 million barrels, and now sits at its lowest level since October 1984, U.S. Department of Energy Data show. Mr. Biden’s 1-million-barrels-a-day oil release from the country’s emergency reserves is scheduled to end next month. American consumers can expect gasoline, heating oil, and diesel fuel to spike soon after the mid-term elections.
The president’s desperate SPR drawdown is a political ploy that leaves Americans vulnerable and hasn’t provided any meaningful relief – energy prices remain about 70% higher than they were when Mr. Biden took office. Moreover, the reserve is for emergency use only, not to be relied upon to win votes in November.
When U.S. energy producers were unleashed under President Donald J. Trump, and oil prices were at a low, Mr. Trump filled the SPR with 75 million barrels. The only presidents to order emergency drawdowns (other than Mr. Biden) were during Operation Desert Storm, after Hurricane Katrina, and in response to oil disruptions in Libya in 2011.
These reserves will have to be replaced, but by whom and at what cost?
Mr. Biden has declared war on domestic oil and gas production. This April, the Interior Department announced it would raise royalty rates for federal onshore leases and cut the acreage available by 80%. In May, it canceled offshore lease sales. The so-called “Inflation Reduction Act,” will increase costs for domestic energy producers and raise taxes. Democrats are blocking new pipelines from being built and intentionally slowing down the permitting process.
Meanwhile, Russia is threatening to cut off Europe’s energy supply, causing the U.S. to send record liquefied national gas and diesel exports to Europe (further reducing U.S. stockpiles), the global oil supply remains influx as Putin rages war with Ukraine, and the largest oil-producing countries in the Middle East have so far refused to ramp up production.
Therefore, the average cost of home heating is expected to rise in the U.S. by 17.2% from last winter to $1,202, the highest price in more than a decade, the National Energy Assistance Directors Association (NEADA) said. This is as more than 20 million U.S. households or about 1 in 6 American families, has fallen behind on paying their utility bills.
Diesel and heating oil, which are distillates made from crude oil, are 63% below the five-year average in New England and 58% below the same average from Maryland to New York, according to the Department of Energy. Nationwide, stocks of heating oil and diesel are at their lowest levels seasonally since 2000, according to the U.S. Energy Information Administration.
The Northeast is heavily reliant on heating oil to keep homes warm in the winter, with 24% of homes in Massachusetts dependent on it, to more than 60% in Maine.
Last week, the governors of these two states, along with four others, met with Energy Secretary Jennifer Granholm, to voice their concerns about soaring fuel costs heading into the winter. Yet, instead of pleading with the Biden administration to end their assault on domestic energy producers and adopt policies to expand production, the governors asked for more federal emergency reserves to be released and to waive the Jones Act. The Jones Act is a law that requires only U.S. ships, that are built domestically and are American staffed, can move goods between U.S. ports.
None of these solutions are likely to give ailing Americans – already being crushed by inflation – the relief or comfort they need heading into the winter months.
“We will be paying for it,” David Rewcastle, a University of New Haven analyst and economics professor told USA Today last week of the left’s endless war on fossil fuels. He noted there was no short-term solution to rising energy prices this winter.
“Maybe this will be a teachable moment,” he added.
Just not before millions of Americans suffer as a result.