Press "Enter" to skip to content

Biden Negotiates International Release of National Oil Reserves; Let’s Try Conservation Instead

I would like to cheer President Joe Biden’s release of 50 million barrels of oil from the Strategic Petroleum Reserve to increase supply and lower consumer fuel prices. President Biden is taking a logical action, well within the scope of the federal government’s already-accepted interference in the free market in the form of hoarding several hundred million barrels of crude oil, to relieve consumers from increased prices for a basic, hard-to-substitute commodity. Unlike his predecessor, President Biden isn’t just winging some abrupt unilateral response; he worked for months to convince China, Japan, India, South Korea, and the United Kingdom to join in a coordinated release of crude stockpiles and multiply the economic impact. And rather than stoking unrealistic expectations, he’s calmly reminding Americans that this release of stockpiled crude will take weeks to trickle through the system and decrease prices at the pump.

But the oil market’s response yesterday indicates the release likely isn’t enough to achieve its goals:

“It’s not going to work simply because the strategic petroleum reserve — any country’s strategic petroleum reserve is not there to try to manipulate price,” Stephen Schork, editor of the Schork Report, said Wednesday on CNBC’s “Squawk Box Asia.”

Strategic petroleum reserves exist only to offset short-term, unexpected supply disruptions, he explained.

…“We are talking 50 million barrels coming out of the United States, potentially another 50 from our partners. That’s 100 million barrels of oil — that is one day’s worth of a global demand for crude oil,” Schork said [Saheli Roy Choudhury, “Oil Prices Are Headed for $100 Despite U.S. Efforts to Release Reserves, Analyst Says,” CNBC, 2021.11.24].

Why not let capitalism take its course? Instead of briefly taking the pressure off producers to meet increased supply, let’s let entrepreneurs solve the problem by investing in their own production capabilities to meet lucrative demand. Better yet, why not let rising prices encourage consumers to shift their demand in the direction that COP26 in Glasgow and President Biden’s speech thereto was all about: shifting our consumption away from fossil fuels to cleaner energy and saving the planet. We save the planet by burning less oil, not more. Instead of handing out oil, perhaps the government should subsidize electric bicycles. (See also: Great Britain, Germany, Sweden, France….)

Besides, gasoline prices creeping up past an inflationarily adjusted historical norm is not a strategic emergency. While there may be some kamikaze logic to burning up the entire Strategic Petroleum Reserve and other stocks as quickly as possible to force a transition to electric vehicles, from a strategic perspective, it would make more sense to keep the SRP taps closed and save that oil for a real emergency, like going to war to kick Russia out of Ukraine or digging giant caves to protect us from a planet-killing  asteroid.

As with all other inflation issues, gasoline prices are rising because our consumption is rising. If you want lower gasoline prices, don’t look to government to solve your problem on the supply side; take action yourself on the demand side: buy less gasoline. We use ten times more gasoline per person per day than folks in China and many European countries, and we don’t live ten times better. Skip a trip, ride your bike, buy a Chevy Bolt—conservation is the real sustainable route to saving your cash and your planet.

14 Comments

  1. larry kurtz 2021-11-24

    Former Vice-President Joe Biden campaigned on ending new oil and gas drilling on federal properties so those who would preserve habitat for the greater sage grouse and other threatened species contend a complete end to leases isn’t coming fast enough. But frustrations are mounting after a judge in Louisiana ordered the Biden Administration to resume leasing even as now President Biden pledged to curb emissions during the 26th United Nations Climate Change Conference (COP26) in Glasgow, Scotland.

    Extracting oil and gas from public lands releases about 20 percent of energy-related US greenhouse gas emissions so the Department of the Interior and Bureau of Land Management intend to scale back leases to the industry in Wyoming, Colorado, Montana, Utah, Nevada, New Mexico and other states. According to Interior the social costs of emissions from oil and gas production on public parcels exceeds $4 billion annually.

  2. Porter Lansing 2021-11-24

    Releasing oil reserves is better than sitting on your thumb and watching MAGA’s spin stories about your lack of action and misunderstanding of the levers of power, you wield; in a WashingtonThink kinda way.

  3. John 2021-11-24

    A HUGE problem is the democrats do not have and never had a transition plan to move off of fossil fuels. This results in the spasm of fossil fuel price increases when democrats are in the the White House proclaiming ‘no drilling, here, there’, combined with fossil fuel price gouging.

    The market will eventually resolve the issue. Electric vehicles are far more reliable, far less costly to own and operate than are internal combustion engine (ICE) vehicles. The global transition to EVs is occurring faster than the media, financial media, and vehicle media anticipated (since they firmly live in the past). This month Cadillac announced its discontinuing 1/3 (315) of its dealerships. That business model is a dead business walking. Future sales will be direct to consumer as is the Tesla model. Dealerships and most vehicle repair shops will go the way of the blacksmith creating cities’ challenges of empty store fronts, loss of taxes, loss of sources to sustain community non-profits. The technological transformation will be advantageous for society, while being wrought with swirling instability as legacy industries futility struggle to hang on to their ‘blacksmith’ business models and shops.

    The market will eventually resolve the fossil fuel issue for utilities. A utility in Australia met its demand this fall solely using solar, wind, and battery storage. The cheapest energy is solar. The cost curves of solar and battery storage are collapsing so much that it costs more now to operate a fossil fuel plant than it does to create new solar and battery storage.

    Twenty-first century Luddites will oppose change at every opportunity. Yet, they will only delay the inevitable march of the market to less cost, greater efficiency. (An aside, gas consumption is increasing as the globe emerges from the pandemic induced slow down. Gas consumption is likely to never exceed its pre-Covid peak.)

  4. larry kurtz 2021-11-24

    Ethanol is a bridge fuel, not a long term fix.

    Hydraulic fracturing can waste up to 16 million gallons of water per well so here in New Mexico that’s often too high a price to pay not to keep fossil fuels in the ground. In the Second Congressional District alone the oil and gas industry left hundreds of orphan wells but because New Mexico is flush with cash operators just walk away from them leaving the state and feds to do the work to cap them.

    Santa Fe-based Wild Earth Guardians joined other interested parties in suing the Trump Organization’s BLM to stop oil and gas encroachment on Chaco Culture National Historic Park. New Mexico’s congressional delegation celebrated the US House passage of then US Representative for New Mexico’s Third District now Senator Ben Ray Lujan’s amendment to halt drilling on public lands near the monument but the bill did not make it through Mitch McConnell’s Earth hater controlled Senate.

    Ending America’s dependence on ‘bridge fuels’ is an idea whose time has come.

    The amount of plastic in the municipal waste stream dwarfs remaining oil and gas reserves in the lower 48 so fuels, even face masks manufactured with recycled materials, can be done while oxidizing less carbon.

    Ores containing lithium are hideously carbon intensive to mine and the General Mining Law of 1872 allows foreign companies to exploit public lands instead of sharing the pecuniary rewards with landowners. But some decommissioned coal fired power plants are being remediated in part by harvesting needed minerals from coal waste.

  5. sx123 2021-11-24

    Millions of years of sun energy locked up in oil molecules. Tough to beat that; tough to beat oil derivatives’ energy concentration, portability and controllability (easy to control fluid). That’s the reality.

    But, since oil is a limited resource and EROI has been decreasing for years, I’d rather see oil used more as a material source (i.e., for plastics) than as an energy source. Reduced oil EROI means the need to use wind, hydro, solar etc. as energy sources is increasing. Oil is a big source of pollution too.

    Battery performance in cold weather will need to improve though before batteries can replace oil/gas in cold climates. There are winter safety concerns around this. BUT, for most people, EVs probably make the most sense.

  6. Cory Allen Heidelberger Post author | 2021-11-24

    Millions of years of sun energy, all released in a couple selfish centuries—no wonder the planet is burning up. How can our leaders lack the ability to see this danger?

  7. mike from iowa 2021-11-24

    Joe Munchkin of West South Duhkota Virginia is pressing Biden to re-authorize KXL for some damn reason or other. Tarsands makes dirty fuels at far greater expense and far more damage to environment, even if you could clean it up.

  8. Mark Anderson 2021-11-24

    Come on Cory, the three covid pub governors, you all know who I mean, have knocked off thousands of people in their effort to own Biden and run for VP, or maybe P. You think those boys and a girl give a dam about the climate?

  9. Mark Anderson 2021-11-24

    Another thing Biden should do is get rid of the China tariffs, the stupidity of Trump is still a tax on every American and it cost his rural supporters dearly. The Republicans would use this bigly however, but so what, they live in a separate universe. Like Marvel and DC. The DC universe just convicted three killers today, reality speaks loudly of truth.. The Marvel universe let one go just a few days ago, he’s a crying baby hero to the unwashed. Both groups shop at Publix, a Publix heiress helped pay for the riots in DC (a different DC), the current Publix is basically socialism in a food store, now thats DC. Now I’m now to to feed my rabbits, wild ones, I have trump neighbors who raise them, and not for petting. So it goes.

  10. Bonnie B Fairbank 2021-11-24

    I put $44.00 gasoline in my truck on 11/21/2021, and previously $38.04 on 10/12/2021. Both times gas was over $3.35/gal. I don’t drive much; I go to the public library, three stores, merchants that have wooden pallets I cut up for firewood, and the Community Action Center. I don’t want or need much. I refuse to drive 60+ miles to either Rapid or Chadron for cheap plastic crap. I’m one of those people you just want to slap around that has 89,000 miles on her 20-year-old vehicle and irritatingly says be mindful of what you want or need.
    Sermon over.

  11. grudznick 2021-11-24

    Good for you, Ms. Fairbank, you be a wise woman. Maverick Junction does tend to jab me for the gasoline, too, whenever I visit my good friend Bob.

  12. jerry 2021-11-24

    Let’s go Biden! The biggest difference between Thanksgiving 2020 and Thanksgiving 2021: 20 million people on unemployment benefits then vs. 2 million on unemployment today.” Booyah

    Gas prices are high in west river, cause we’re special I guess. Go to just about any other place and you can see there is a pretty good difference in price. Grifters gots to grift here.

  13. WillyNilly 2021-11-25

    We’ll never learn. How many times have we had high fuel prices and/or short supplies? So each time there is a campaign to have greater fuel efficiency, to drive fewer miles, to buy smaller vehicles and a few people actually do. But we soon go back to the killer vehicles because we feel ‘safer’ on the road. We live with fluctuating prices and supplies. When the planet is dark and black and the remaining living things require breathing assistance, maybe we’ll figure it out.

Leave a Reply

Your email address will not be published. Required fields are marked *