Biden to Drain Oil Reserves Instead of Restarting Keystone

The Biden administration on Thursday announced an unprecedented release from the nation’s Strategic Petroleum Reserve, putting an extra 1 million barrels into circulation every day for the next six months. The president estimated gasoline prices may decline between “10 cents to 35 cents a gallon.”

The White House says the release, which will total 180 million barrels of oil, represents a “bridge” as domestic and global production slowly climb to normal output. It’s the largest release since the reserve was established in 1974 to fill the country’s energy needs in case of natural disasters or wars.

Analysts say the move is not likely to resolve the shortage and ensuing price hikes, and Manish Raj, CFO at Velandera Energy Partners, was blunt in assessing its futility. Raj noted the SPR release is akin to “putting duct tape on a leaking ship,” adding it might hold momentarily but will not last.

This marks the third time the White House has ordered releases from the nation’s stockpiles in just over a year, all while firmly blocking construction on the Keystone XL pipeline — a pipeline, by the way, that is far more environmentally sensitive than moving crude by heavy truck or rail.

In another move Biden says will increase pressure on oil companies to ramp up production, the administration will begin punishing companies for unused leases on federal land. The president’s “use-it-or-lose-it” program calls for companies to pay extra if they do not use oil wells on land leased from the federal government.

Biden also announced he will invoke the Defense Production Act to spur domestic mining of minerals critical to battery production — which is critical to the electric vehicles he wants to see on the road.

Oil is nearly 70% higher than just a year ago, and analysts believe it will take a jump in global production to create a sustained drop in prices. Overall, high inflation and skyrocketing energy prices are issues the administration feels strong pressure to address, especially holding a slim congressional majority with midterm elections coming in November.

The Biden White House so far has tried everything from Ouija boards to begging terrorist regimes to increase production in their attempt to solve soaring gas prices — everything, of course, except the one surefire way to increase domestic production.