Doubts Arise Over Biden’s Reveal of Plan To Refill Oil Reserves
(USNewsBreak.com) – President Joe Biden has been dipping into the Strategic Petroleum Reserve (SPR), which is the country’s emergency supply of oil, as part of his plan to reduce prices at the pump. The commander in chief has released more oil than any other president, reportedly depleting the SPR by about 40%. Biden has indicated the administration has a plan to rebuild the reserve, but not everyone is sold on it.
The Biden Agenda
During remarks on October 18, Biden noted the SPR contained about 400 million barrels, which he concluded would be adequate if an emergency arose. Still, he said he could release more from the stockpile if needed under what he deemed the “Ready and Release plan.” He also reassured the public that the United States was pumping out 12 million barrels daily.
But the commander-in-chief acknowledged a need to refill the SPR. He explained the plan includes purchasing barrels of oil when the price is at around $70 or between $67 and $72 barrel, reasoning that it will help encourage oil companies to keep producing without fear they’ll be unable to sell if prices go down.
Critics Weigh In
Not everyone is convinced that the plan will work. Manhattan Institute energy expert Mark Mills told Fox News that the president’s plan to replenish the SPR won’t be a fast solution. He said it will take time, possibly years, to get the reserves back to where they were. He noted the industry projects prices may stay between $80 and $100 for the next several years. American Exploration and Production Council CEO Anne Bradbury also told the same news source that she thinks the “industry doesn’t necessarily need or want a new government program.”
Meanwhile, the plan has proven unpopular with some Republicans, who criticized Democrats for blocking efforts to top off oil reserves at a far lower price a few years ago. Now, the administration wants to refill the reserves for around $4 billion more, according to the New York Post. The outlet quoted Sen. John Barrasso (R-WY) calling the move “highway robbery” against taxpayers.
A Doomed Plan?
By planning to buy oil down the road, the Biden administration hopes to indirectly increase production by encouraging companies to drill more of it. According to Fox News Digital, the White House expects to use fixed-price contracts as part of its plan to purchase more oil for the reserves.
However, the oil industry may not suddenly boost production just because of a purchase promise at the price of $70 a barrel. The Wall Street Journal reports that experts have pointed out producers want to grab high prices for their products when they can. In addition, the restrictions and regulations bogging down the industry increase their costs. They have to be cautious to maintain a profit for the shareholders.
What do you think? Will the Biden administration’s plan for oil work?
Copyright 2022, USNewsBreak.com