US President Joe Biden announces the release of 1 million barrels of oil per day for the next six months from the US Strategic Petroleum Reserve, as part of the administration’s efforts to lower gasoline prices, during remarks in the South Court Auditorium of the Eisenhower Executive Office Building in the United States South Court Auditorium. White House in Washington, US, March 31, 2022.
Kevin Lamarque | Reuters
The US will release 1 million barrels of oil per day from its strategic reserves to lower gas prices and fight inflation across the country, the White House announced on Thursday.
President Joe Biden plans to tap the country’s strategic petroleum reserve over the next six months as domestic producers ramp up production, according to a fact sheet released by the Biden administration.
“The magnitude of this release is unprecedented: The world has never cleared oil reserves at this rate of 1 million per day for so long,” the White House said in a statement. “This record release will provide a historic amount of supply to bridge the gap until the end of the year when domestic production picks up.”
A senior government official told reporters on Thursday morning that, combined with similar actions in other countries, the average daily amount released from global strategic reserves should exceed 1 million barrels.
Oil prices fell Thursday after reports surfaced Wednesday evening suggesting such a move was imminent.
The international benchmark Brent oil futures for May were down 4% and traded at $108.89 a barrel. US crude oil futures fell 4.7% to $102.84. Earlier in the session, the contract was trading as low as $100.16.
The announcement comes as the White House seeks ways to counter a spike in energy prices caused by Russia’s invasion of Ukraine. While oil prices are far from their highest levels earlier this year, geopolitical chaos has continued to push oil costs up and heighten fears over the availability of oil and natural gas.
The recent rise in crude oil prices has led to a jump in domestic gasoline prices, with the national average price of a gallon of gas at $4.23, up from $2.87 a year ago.
The White House also used Thursday’s announcement to criticize the domestic energy industry for “sitting on” more than 12 million acres of federal land and 9,000 unused but already approved manufacturing permits.
Specifically, Biden pleaded with lawmakers to impose fees on companies that don’t use wells on their leases on acres of public land.
“Companies producing from their leased acres and existing wells will not receive higher fees,” the administration said. “But companies that remain on non-producing acres will have to choose whether to start producing or pay a fee for each unused pit and acres.”
A senior administration official later added that the White House has met with industry leaders to encourage producers to use already approved land to ramp up US capacity, with mixed feedback.
“We believe the industry needs to grow,” the official said. “It has to do more, there has to be invested in extra production.”
“There are companies that have said they are doing the right thing,” the person added. But there are others “who have said that no matter where the price is, they will stop producing. They are instead focused on paying back dividends and distributions to shareholders.”
The White House said Biden will also urge lawmakers to promote U.S. energy independence by passing legislation to accelerate the clean energy transition.
The president also plans to invoke the Defense Production Act to support the production and processing of minerals and materials used in high-capacity batteries, such as lithium, nickel, cobalt, graphite and manganese.
“The sectors supported by these large-capacity batteries – transportation and the energy sector – are responsible for more than half of our country’s CO2 emissions,” the government said in a fact sheet.
† Slice Mag’s Pippa Stevens contributed to the report.