Biden to release of 1 million barrels of oil a day to ease U.S. pump prices

The Bryan Mound Strategic Petroleum Reserve is seen in an aerial photograph over Freeport, Texas
FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

March 31, 2022

By Alexandra Alper and Timothy Gardner

WASHINGTON (Reuters) -President Joe Biden on Thursday will announce the release of 1 million barrels of oil a day for the next six months from the U.S. Strategic Petroleum Reserve, the largest release ever, to try to bring down gasoline prices, the White House said.

As gasoline prices have soared in recent months, particularly after Russia’s Feb. 24 invasion of Ukraine, Biden will also call for U.S. oil companies to drill more, and give electric vehicle battery makers a boost.

The barrels will start to flow to market starting in May, a senior administration official told reporters.

Biden is to make the announcement at 1:30 p.m. EDT (1730 GMT) event at the White House.

“After consultation with allies and partners, the president will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average – every day – for the next six months,” the White House said.

The release will “serve as bridge until the end of the year when domestic production ramps up,” it said.

Additional oil releases from allies in the International Energy Agency will bring the total volume to global markets of oil from stockpiles to well over 1 million barrels per day, the official said.

The IEA, the world’s energy watchdog of which the United States is a member, may also decide to release barrels when IEA countries meet on Friday.

The 31-member IEA, representing industrialized nations but not Russia, presided over the fourth coordinated oil release in its history on March 1 of over 60 million barrels of crude – its largest yet.

Oil prices plunged about 5% on the news of the latest U.S. reserve draws while OPEC+, a production group including Saudi Arabia and Russia, stuck to a modest deal to slowly ramp up output. [O/R]

Biden will also invoke the Defense Production Act to support the production and processing of minerals and materials used for large capacity batteries used in electric vehicles – such as lithium, nickel, cobalt, graphite, and manganese, the White House said. He will also call on Congress to pass his plan to move the country toward clean energy policies.

‘USE IT OR LOSE IT’

The Biden administration has long said that energy companies are sitting on thousands of unused leases and are slow to open the spigot. Biden will call for a “use it or lose it” policy that will seek to push oil companies to take advantage of unused oil leasing permits, a senior administration official told reporters.

“We do think there should be consequences if you’re sitting on unused approved permits for production on federal lands,” the official said. The policy would charge companies if they are sitting on wells and not developing leases, the official said.

Oil companies have said https://www.reuters.com/world/us/big-oil-biden-administration-spar-over-blame-pain-pump-2022-03-10 they like to have a deep inventory of permits to give them flexibility on future planning and that labor and logistical constraints can be a headwind in using them.

(Reporting By Timothy Gardner, Alexandra Alper and Steve HollandEditing by Marguerita Choy)