President Biden orders record drain of Strategic Petroleum Reserve

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The United States is not officially at war, but the Russian invasion of Ukraine and subsequent Allied economic sanctions are having a severe impact on global oil supplies. President Biden has now ordered a record release of the country’s Strategic Petroleum Reserve to boost supply and hopefully help keep gas prices at the pumps down. The United States and other global oil suppliers are poised to release “well over” a million barrels of oil a day, ramping up production over the next few months.

The average cost of a gallon of regular gasoline has climbed more than a dollar in the United States so far this year, setting a new record before hovering around $4.20 right now. Now another record has been set, with President Biden releasing the Strategic Petroleum Reserve. The White House announced “a historic release of the Strategic Petroleum Reserve to serve as a bridge to greater supply in the coming months”, with national production “expected to increase by 1 million barrels per day this year, and nearly 700,000 barrels per day next year”.

This is the “largest release of oil reserves in history”, according to the White House statement, and other global oil suppliers are also expected to increase production, boosting global daily supplies by well above. beyond the US contribution alone. “This record release will provide a historic amount of supply to serve as a bridge until the end of the year when domestic production increases.”

To meet these demands for continued greater U.S. oil production in the future, President Biden also called on Congress “to require companies to pay royalties on wells in their leases that they have not used for years and on acres of public land which they hoard without producing.” The president has taken a hard line this year against oil companies artificially fixing and inflating gas prices to take advantage of current sanctions. Forcing them to maximize production and flood supply should ideally prevent any real need for price increases.

To ensure there is demand for all of this increased supply, the “Department of Energy will use revenues from the release to replenish the Strategic Petroleum Reserve in future years,” which will drive future demand. . The future and sustained increase in US production will also ensure the continued supply and availability of the US strategic reserve for “future emergencies”. Basically, we’re emptying the reserve now to maintain market stability and asking American companies to fill it again, and then ideally we’re maintaining those production levels in a more self-sustaining loop so that dictators in Russia or elsewhere have less to worry about. influence on the price at the pump.

Some of this increased range will also come from other energy sources. President Biden also announced “a directive authorizing the use of the Defense Production Act to secure U.S. production of critical materials to strengthen our clean energy economy by reducing our dependence on China and other countries. for the minerals and materials that will fuel our clean energy.” to come up.”

The directive targets the future localized production of batteries for PHEVs and BEVs, encouraging the “production and processing of minerals and materials used for large capacity batteries – such as lithium, nickel, cobalt, graphite and manganese – and the Department of Defense will implement this authority using strict standards of environmental, labor, community and tribal consultation.”

The United States is already a global energy exporter, but President Biden’s actions today will only inflate its status as an energy producer in the future, hopefully stabilizing supplies and price without too many additional emergencies to shock the system.

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