October 19, 2022
What? How exactly does that work?
I’m going to get to that in a second. But first – you probably heard the President announced some new actions to try and stabilize the oil market. Whether it actually brings down gas prices significantly, is up for debate.
Before I get to this plan to buy oil for a taxpayer profit, you should know — the president announced the release of 15 million barrels of oil from the strategic petroleum reserve for the month of December. Now, it’s important to note this isn’t a new release of oil – this is part of the 180 million barrels that were already set to be released.
That ready and release plan basically says this White House isn’t afraid to keep releasing oil from the SPR in the future *if* it’s needed. The President says the strategic petroleum reserve is more than “half full” with more than 400 million barrels of oil left. The fact is –since 2007 – the SPR has averaged about 700 million barrels of oil and right now is at the lowest level we have seen in 15 years.
Now this oil profit plan.
The President said oil companies haven’t been investing in American oil production because they don’t feel like that investment will pay off for them in the long run …for a whole host of reasons. So today, Biden said if they step up production, he’ll commit to purchasing that oil to refill the strategic petroleum reserve when oil prices come back down around $70 a barrel. He says that’s a good price for companies to make money but also be profitable for taxpayers. Here’s the white house logic. Right now the oil being released from the strategic petroleum reserve is being sold on the oil market to boost supply. All these barrels have been selling for $90 a barrel. Sometimes more. But if the government buys the replacement oil it in the future at $70 a barrel, that’s less, aka a profit. The White House says this will also create certainty for those oil companies that their oil products will be purchased even if consumer demand is low.
Now this is the White House’s logic. It’s not my logic. It is not my plan. And it’s unclear if the president’s commitment would be enough to get American oil companies to increase their production. It’s also important to know some in the oil industry say the continuous tapping of the strategic petroleum reserve keeps prices artificially low – basically it’s a Band-Aid. And when the reserve release runs out, oil price will spike back up. And for those of you who are concerned about Biden’s commitment to clean energy, he also said he doesn’t want this oil buying commitment to delay or defer progress on wind, solar and hydrogen clean energy. He asked Congress to step up and pass new permitting rules to make that happen asap.
More from the White House here.
More on the Strategic Petroleum Reserve levels here.
Watch Biden’s full speech here.
He is such a moron. I’m not but a common woman with only a bachelor’s but I am not confused as He is! Thanks Lisa !