WASHINGTON: US President Joe Biden announced a plan on Wednesday (Oct 19) to sell off the rest of his release from the nation’s emergency oil reserve by year’s end and begin refilling the stockpile as he tries to dampen high petrol prices ahead of midterm elections on Nov 8.
Biden is seeking to add enough supply to prevent near-term oil price spikes that could punish Americans, and assure US drillers that the government will enter the market as a buyer if prices plunge too low.
He said 15 million barrels of oil will be offered from the Strategic Petroleum Reserve
(SPR) – part of a record 180-million-barrel release that began in May, and added the United States is ready to tap reserves again early next year to rein in prices.
“We’re calling it a ready and release plan,” Biden said at a White House event. “This allows us to move quickly to prevent oil price spikes and respond to international events.”
Biden’s use of the federal government’s reserve to manage oil price spikes and attempts to increase US production underscore how the Ukraine crisis and inflation have changed the policies of a president who came into office vowing to cut US dependence on the fossil fuel industry.
The White House had an added sense of urgency after the Saudi Arabia-led Organization of the Petroleum Exporting Countries rankled Biden by siding with Russia and agreeing to a production cut, prompting the president to declare that the US-Saudi relationship needs a revaluation.
“With my announcement today, we’re going to continue to stabilise markets and decrease the prices at a time when the actions of other countries have caused such volatility,” Biden said.
Biden blamed Russian President Vladimir Putin’s invasion of Ukraine for higher crude and gasoline prices, while noting prices had fallen 30% from their peak earlier this year.
He also repeated a plea to US energy companies, petrol retailers and refiners, asking them to stop using record-breaking profits to buy back stock, and to invest in production instead.
Prices “are not falling fast enough”, he said.
“Families are hurting,” and petrol prices are squeezing their budgets, he added.
The president, facing criticism from Republicans who charge he is tapping the SPR for political reasons and not because there is an emergency, also said he would refill the nation’s stockpiles in the upcoming years.
He said his aim would be to replenish stocks when US crude is around US$70 a barrel, a level he said would still allow companies to profit while being a good deal for taxpayers. The US benchmark was around US$85 on Wednesday.
The SPR, which is now at its lowest levels since 1984, is more than half full with more than 400 million barrels of oil, Biden said, “more than enough for any emergency drawdown”.
The administration’s plan was to end the sale of the 180 million barrels in November. However, purchases by companies, including Marathon Petroleum Corp, ExxonMobil Corp and Valero Energy Corp, were slower than expected over the summer and some 15 million barrels remained unsold.
Those will be put up for bidding for delivery in December, a senior administration official said.
In another development, the Biden administration said on Wednesday it is awarding US$2.8 billion (RM13.2 billion) in grants to boost US production of electric vehicle batteries and the minerals used to build them, part of a bid to wean the country off supplies from China.
“By undercutting US manufacturers with their unfair subsidies and trade practices, China seized a significant portion of the market,” Biden said in announcing the awards.”Today we’re stepping up ... to take it back, not all of it, but bold goals.”
The grants, which are going to projects across at least 12 states, mark the latest push by the Biden administration to help reduce the country’s dependence on China and other nations for the building blocks of the green energy revolution.
The funding recipients were chosen by a White House steering committee and coordinated by the Energy Department with support from the Interior Department. But the programme does nothing to alleviate permitting delays faced by some in the mining industry. – Reuters