Joe Biden has called on oil companies to pass their huge profits on to consumers by announcing the release of 15 million barrels of oil from the US Strategic Petroleum Reserve.
Biden is fighting to control gas prices ahead of the November midterms. He blamed Vladimir Putin’s invasion of Ukraine for the global oil price spike and said his administration was doing everything possible to control prices.
“Gas prices have fallen every day over the past week,” Biden said. “It’s progress, but they’re not falling fast enough. Gas prices are felt in almost every family in this country. That’s why I did everything in my power to reduce gas prices.
He called on American oil companies for help. In the second quarter of 2022, the six largest U.S. oil companies reported profits of $70 billion, Biden said.
“So far, US oil companies are using this windfall to buy back their own stock, passing that money on to shareholders, not consumers,” he said. “My message to all businesses is this: you are sitting on record profits. And we give you more certainty. You can act now to increase oil production. You should not use your profits to buy back shares or for dividends – not while the war is raging.
News of the latest oil release accelerates the sale of the last of the 180 million barrels that Biden announced in March would be sold. The announcement comes after OPEC+ oil-producing nations said they would cut oil production, pushing up prices, in a move that angered White House officials.
Created in 1975 to help mitigate shocks in the United States’ petroleum supply, the Strategic Petroleum Reserve (SPR) is considered the largest emergency reserve in the world. Stored in underground reservoirs in Louisiana and Texas, the SPR has a capacity of 714 million barrels of oil and is currently at its lowest level since 1984.
The reserve now contains about 400 million barrels of oil and Biden said more oil could be released if the situation does not improve. The administration called the situation a “bridge” until domestic production could be increased and said the United States would replenish the strategic reserve when oil prices fall to or below $67-72 a barrel. .
Biden faces political headwinds due to gas prices. AAA reports that gas costs an average of $3.87 a gallon, down slightly over the past week but up from a month ago. The recent price hike has dampened the momentum the president and his fellow Democrats had seen in the polls ahead of the November election.
Analysis on Monday by ClearView Energy Partners, an independent energy research firm in Washington, suggested that two states that could decide control of the evenly divided Senate, Nevada and Pennsylvania, are sensitive to energy prices. . The analysis noted that gasoline prices over the past month have exceeded the national average in 18 states, which are home to 29 potentially “at-risk” House seats.
The hard math for Biden is that oil production has yet to recover to pre-pandemic levels of around 13 million barrels per day. That’s about a million barrels a day below that level. The release of 15 million barrels would not even cover a full day’s use of oil in the United States, according to the Energy Information Administration.
The oil industry would like the administration to open more federal lands to drilling, approve the construction of pipelines and reverse its recent changes to raise corporate taxes. The administration counters that the oil industry is sitting on thousands of unused federal leases and says new permits would take years to produce oil without impacting current gas prices.
Environmental groups, meanwhile, have called on Biden to keep his campaign promise to block new drilling on federal lands.
Because fossil fuels drive carbon emissions, Biden has sought to move away from them altogether with a zero emissions pledge by 2050. When discussing that pledge nearly a year ago after the leading wealthy and developing G20 countries in Rome, the president said he still wants to lower gas prices too because at $3.35 a gallon it has a profound impact on families in the working class just to come and go to work”.
The Associated Press contributed to this story