Biden admin cancels plan to refill emergency oil reserve amid high prices
Action represents major setback to Biden's SPR replenishment plans
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The Biden administration has abruptly canceled a plan announced last month to purchase up to three million barrels of oil as part of its effort to refill the Strategic Petroleum Reserve (SPR).
The SPR — which Congress established for emergency situations — currently contains 363.6 million barrels of oil, a 43% decline from January 2021 when President Biden took office, federal data shows. Biden began depleting the reserve in late 2021 to combat high fuel prices.
The Department of Energy said that while it remains committed to refilling the SPR, it would pull back its most recent solicitation for oil amid increasing prices. On March 14, DOE's Office of Petroleum Reserves announced the solicitation for three million barrels of oil to be delivered in August and September to its Bayou Choctaw site in Louisiana, one of four major SPR storage facilities.
"Keeping the taxpayer’s interest at the forefront, we will not award for the Bayou Choctaw SPR site in August and September, and will continue to solicit available capacity as market conditions allow," a DOE spokesperson said. "As always, we monitor market dynamics to remain nimble and innovative in our successful replenishment approach to protect this critical national security asset."
The spokesperson added that the administration has already taken steps to replenish the emergency reserve, the largest of its kind in the world, and deliver "a good deal for American taxpayers."
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Secretary of Energy Jennifer Granholm hosts a news conference on Dec. 13, 2022. (Mary F. Calver/File Photo / Reuters)
When DOE first announced the Bayou Choctaw refill plan last month, it said it would aim to purchase oil priced at $79 per barrel or below. Since then, oil prices have increased, with the U.S. benchmark hitting $85.71 earlier on Wednesday.
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The solicitation, though, is one of several to be announced by DOE. The agency has in recent months executed several of those purchases, but the reserve still remains at a historically low level.
President Biden announces the release of 50 million barrels of oil from the U.S. Strategic Petroleum Reserve on Nov. 23, 2021. (Evelyn Hockstein / Reuters Photos)
Overall, the president ordered DOE to release a total of about 260 million barrels of oil from the SPR in 2021 and 2022. Although the administration has recently initiated the process of refilling the reserve, Republican lawmakers and energy experts have warned its actions make the U.S. vulnerable to short-term supply shocks.
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"It’s pure insanity to watch the Biden administration cut American oil production and then claim they can’t refill our critical reserve because of the price," said Daniel Turner, founder and executive director of watchdog group Power the Future.
"Joe Biden drained the SPR for political reasons, cut our domestic production for his climate agenda, and now he’s leaving our critical reserve more vulnerable because he’s incompetent," he continued. "As a result, Americans are paying more at the pump, more at the grocery store and our SPR is less full during a time of rising turmoil in the Middle East."