ALL NEWS

President Biden taps oil reserve for 6 months to control gas prices

Mar 31, 2022, 9:22 AM | Updated: 9:23 am
Biden oil reserves...
President Joe Biden speaks about status of the country's fight against COVID-19 in the South Court Auditorium on the White House campus, Wednesday, March 30, 2022, in Washington. (AP Photo/Patrick Semansky)
(AP Photo/Patrick Semansky)

WASHINGTON (AP) — President Joe Biden is ordering the release of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months, the White House said Thursday, in a bid to control energy prices that have spiked as the U.S. and allies imposed steep sanctions on Russia over its invasion of Ukraine.

Mr. Biden was making the formal announcement later Thursday in remarks on his administration’s plans to combat rising gas prices.

Related: Oil industry insiders say Biden will have to make big changes to bring Utah gas prices down

The White House says President Biden will also call on Congress to impose financial penalties on oil and gas companies that lease public lands but aren’t producing energy.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — President Joe Biden is preparing to order the release of up to 1 million barrels of oil per day from the nation’s strategic petroleum reserve, according to two people familiar with the decision, in a bid to control energy prices that have spiked as the U.S. and allies have imposed steep sanctions on Russia over its invasion of Ukraine.

Related: Utah joins lawsuit against Biden administration over gas and oil rights

The announcement is expected Thursday when Mr. Biden delivers remarks on his administration’s plans to combat rising gas prices. The duration of the release hasn’t been finalized but could last for several months. The people spoke on the condition of anonymity to preview the decision.

The expected move by President Biden shows that oil remains a key vulnerability for the U.S. at home and abroad. Higher prices have crushed the President’s approval domestically, while also adding billions of dollars to the Russian war chest as it wages war on Ukraine. The release of reserves would create pressures that could reduce oil prices, though President Biden has already twice ordered releases from the strategic reserves without causing a meaningful shift in oil markets.

Part of Mr. Biden’s conundrum is that high prices have not coaxed a meaningful jump in oil production. The planned release is a way to increase supplies. The markets reacted quickly with crude oil prices dropping more than 3% on Thursday morning to roughly $104 a barrel. Still, oil is up from roughly $60 a year ago as supplies have not kept up with demand as the world economy began to rebound from the coronavirus pandemic.

Americans on average use about 21 million barrels of oil daily, with about 40% of the consumption devoted to gasoline, according to the U.S. Energy Information Administration.

Domestic oil production is equal to more than half of the country’s usage, but high prices have not led companies to return to their pre-pandemic levels of output. The U.S. is producing on average 11.7 million barrels daily, down from 13 million barrels in early 2020.

Republican lawmakers have said the problem rests with the Biden administration being hostile to oil permits and the construction of new pipelines such as the Keystone XL. Democrats have countered that the country needs to move to renewable energy such as wind and solar that could reduce the dependence on fossil fuels and Russia President Vladimir Putin’s leverage.

“I think the administration’s anti-fossil fuel views are sort of like a religion,” Senate Republican Leader Mitch McConnell told Punchbowl News in a Thursday interview. “They’re kind of unconnected with the needs of not only our country but the world. This policy is driven by the hard left, which the president almost never crosses. And, until that policy changes, we’re gonna have a problem.”

Oil producers have been more focused on meeting the needs of investors than consumers, according to a survey released last week by the Dallas Federal Reserve. About 59% of the executives surveyed said investor pressure to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while fewer than 10% blamed government regulation.

The steady release from the reserves would be a meaningful sum and come near to closing the domestic production gap relative to February 2020, before the coronavirus caused a steep decline in oil output.

The Biden administration in November announced the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the Russia-Ukraine war began, the U.S. and 30 other countries agreed to an additional release of 60 million barrels from reserves, with half of the total coming from the U.S.

According to the Department of Energy, which manages it, more than 568 million barrels of oil were held in the reserve as of March 25.

News of the administration’s planning was first reported by Bloomberg.
___
Associated Press writer Michael Balsamo contributed to this report.

Today’s Top Stories

All News

...
Mike Valerio, CNN

Veterans and scientists fulfill ‘no man left behind,’ returning long-lost American remains from lonely Pacific WWII battlefield

Byrd said the average time to identify an individual is 2.5 years, but can be as quickly as two weeks.
13 hours ago
recession...
Elizabeth Weiler

Lessons to be learned from the UK’s recession

SALT LAKE CITY — “Recession” is a word that has not escaped the minds of Americans. When we observe some of the largest economies in the world like the United Kingdom, there are major takeaways we can learn from those overseas to help prevent economic disasters within our home.  Between inflation, living costs, the war […]
13 hours ago
a small boy recieves a COVID-19 vaccine in China...
JOE McDONALD Associated Press

China eases anti-COVID measures following protests

Experts warn, however, that restrictions can’t be lifted completely until at least mid-2023 because millions of elderly people still must be vaccinated.
13 hours ago
a rendering of the WonderBlock that will be developed in downtown ogden...
Alexandrea Bonilla

Downtown Ogden expansion project begins finalizing plans

A downtown Ogden expansion project, Make Ogden, is taking its first steps to creating a new development called the WonderBlock.
13 hours ago
tax increase...
Mark Jackson

Tax increase in Salt Lake County for the library

Salt Lake County Residents will see a slight tax increase. The county approved a budget for 2022-2023 the will help update the library system.
13 hours ago
shoplifting...
Samantha Herrera

Increased shoplifting puts pressure on retailers and raises prices

Shoplifting is hitting retailers hard this season. Though retailers lose millions in stolen merchandise, offenders usually go without much punishment.
13 hours ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...
Macey's

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
President Biden taps oil reserve for 6 months to control gas prices