The reaction to President Joe Biden’s announcement on Tuesday that he is releasing some 50 million barrels from the strategic oil reserve has been swift and critics agree the move is only a temporary fix and will not reduce the rise. continuous gas prices at the pump.
This will require Biden to reverse his policies that have hampered domestic production, including reopening closed pipelines and trying to ban oil and gas operations on federal lands.
According to the Federal Energy Information Administration:
In 2020, the United States consumed on average about 18.19 million barrels of oil per day, for a total of about 6.66 billion barrels of oil. This was the lowest annual consumption level since 1995. The decline in consumption in 2020 compared to 2019 was the largest annual decline in oil demand in the United States. This decline is largely the result of the global response to the coronavirus pandemic (COVID-19).
“The administration is blaming others when it should take a sober look at its own energy policy,” Derrick Morgan, vice president of American Fuel & Petrochemical Manufacturers, a trade organization, said in a statement. Raison magazine piece. “Prices are determined by competitive companies operating in an environment of supply and demand.” He continued:
Unfortunately, federal policy discourages supply by shutting down pipelines, banning future production, denigrating the future of the petroleum industry, and imposing onerous demands on refineries, foremost a heavy standard on renewable fuels.
“America’s true strategic reserve of oil is found in places like the Permian Basin and the Gulf of Mexico. The Department of Energy’s reserve should only be used for supply disruptions, ”said Christopher Guith, senior vice president of the Chamber of Commerce’s Global Energy Institute, on Tuesday in a statement, adding:
Instead of ineffective band-aids, the White House should focus on policies that will encourage domestic production of oil and natural gas. Rather, all the administration has done is threaten power generation on federal lands, cancel pipelines, and beg Saudi Arabia and Russia for more oil.
“It’s time to unleash America’s full potential to meet global energy needs.”
“Congress has given the President and the Energy Secretary broad powers to manage the SPR and it is incumbent on the administration to exercise that authority as it sees fit,” said Frank Macchiarola, senior vice president of business policies, economics and regulations of the US trade group. Institute of Petroleum.
“We believe any impact resulting from a release of SPR is likely to be short-lived unless coupled with policy measures that encourage the production of US energy resources,” Macchiarola said.
Raison The magazine reported the pushback:
The Biden administration rescinded approval for the Keystone pipeline earlier this year and may or may not consider shutting down the important Line 5 pipeline in Michigan. In January, the Biden administration froze the issuance of new leases for oil and gas drilling on federal lands and waters, but has since backed down and started authorizing further oil and gas exploration. Worried about man-made climate change, Biden certainly “denigrated” fossil fuels such as oil and gas. The renewable fuels standard passed in 2005 requires refiners to blend ethanol into their gasoline, which increases the average price of a gallon of gasoline by as much as 30 cents. The Trump and Biden administrations, under the sway of the Midwestern states over biofuels, have strongly supported the renewable fuels standard.
Just before the pandemic hit in March 2020, the United States had become, due to the fracking revolution, the world’s largest oil producer, from an importer of nearly 13 million barrels per day. in 2005 exporting about 1 million barrels per day in 2020. Thus, in recent years, US oil companies have essentially become the price makers in the world oil market. However, the initial economic fallout from the pandemic caused oil prices to collapse, and the number of operating U.S. oil rigs as a result fell to just 250, the lowest level on record.
To make matters worse, the slow recovery in oil production in the United States has allowed two loathsome regimes, one that chops journalists and the other that poisons dissidents, to effectively fix the current world price of oil. However, the pricing power wielded by OPEC + might not last any longer since the good news is that the number of oil rigs drilling in the United States is on the rise and reached 563 last week.
Fox News explained how the energy landscape has changed since Biden replaced former President Donald Trump:
In March 2020, under the Trump administration and at the start of the coronavirus pandemic, the Department of Energy purchased 77 million barrels of U.S.-made crude oil to begin filling the strategic oil reserve.
And in April 2020, when oil prices remained deep in the red for the first time in history, Trump again decided to fill the strategic reserve with oil.
“Based on the record price of oil, it’s at a level that many people are interested in, we are filling our national oil reserves, our strategic reserves and we are looking to put up to 75 million barrels in the reserves themselves- Even who would complete it all, it would be the first time in a long time that it was completed and we would get it at the right price, ”Trump said at the time.
Fox News reported that, according to the Department of Energy, as of November 19, there were 604.5 million barrels in the strategic oil reserve.
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