The federal government will pull oil from the country’s emergency stockpile in an effort to bring down stubbornly high fuel prices, the White House said Tuesday.
Over the next several months, the U.S. Department of Energy will release 50 million barrels of oil from the Strategic Petroleum Reserve, where it’s currently storing just over 600 million barrels in four underground caverns.
In total, the release would amount to about two-and-a-half days of U.S. oil consumption: Before the COVID-19 pandemic curtailed both demand and production, the U.S. consumed roughly 20.5 million barrels of oil per day.
The majority of the release — 32 million barrels — will be returned to the reserve in the coming years, the Biden administration said. The remaining 18 million barrels, which have already been authorized for sale by Congress, will be released ahead of schedule.
Between 10 and 19 million barrels of federally stockpiled oil have been sold annually since 2017. Oil from the reserve, which was established in the 1970s to prevent supply disruptions, was last exchanged after Hurricane Harvey shut down refineries in Texas and Louisiana in August 2017.
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The administration’s announcement hasn’t gone over well in Wyoming, which produces the second-most oil on federal leases, after New Mexico. The state’s slow-to-recover oil industry cites uncertainty about the future of drilling on federal lands — driven by regulatory changes like Biden’s leasing moratorium, shifting sage grouse protections and tighter methane restrictions — as the primary impediment to growth.
Industry has also cited comments made earlier this month by Interior Department Deputy Secretary Tommy Beaudreau, who described the federal oil and gas leasing program as being “grounded in a bygone era“ that prioritized resource extraction more heavily than it should be today, as a driver of uncertainty.
In recent months, Biden has also pushed international oil producers to boost output, angering Wyoming producers.
“Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster,” Sen. John Barrasso, R-WY, said in a statement Tuesday. “They’re not substitutes for American energy production.”
In the months following the country’s rapid economic recovery, oil demand has continued to exceed supply. The Department of Energy hopes that the monthslong release of oil from the strategic reserve will bring supply and demand back into balance, reducing the cost of gasoline and home heating for consumers as production slowly recovers.
“Releasing oil from the strategic reserve is a stop-gap measure that’s better than asking OPEC to pump more oil,” Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, said in a statement. But, Siegel said, the price of oil is inherently volatile, which is “why President Biden wisely said we need to transition off of oil.”
The Petroleum Association of Wyoming, meanwhile, pointed to the unpopularity of high gas prices to explain the administration’s decision to tap into the oil reserve.
“Polls show people don’t like high prices at the pump,” Ryan McConnaughey, director of communications for the Petroleum Association of Wyoming, said in a statement.
After surpassing $4 per gallon this summer, the price of regular gasoline has averaged about $3.45 per gallon in Wyoming over the last several weeks, more than a dollar higher than it was a year ago. The Petroleum Association doesn’t think those elevated prices justify releasing stockpiled oil.
“This move will have as much long-term benefit as slapping a band-aid on a sprained ankle,” McConnaughey said. “We humbly suggest the Administration set aside its meaningless and harmful efforts to end public lands energy development so we in Wyoming can once again help make the United States energy independent.”