How and Why Biden Destroyed the Strategic Petroleum Reserve

By Andrew Follett

Tuesday, April 09, 2024

 

Last Wednesday, President Biden’s Department of Energy (DOE) canceled a pair of oil purchases to refill the Strategic Petroleum Reserve (SPR), leaving America’s energy reserves dangerously low at a time of global uncertainty.

 

The DOE originally planned to buy oil at $79 per barrel. But oil prices have stubbornly refused to cooperate and remain above $86 per barrel, leading the DOE to cancel the purchase.

 

When former president Donald Trump attempted to fill the SPR to the brim when oil prices were at a rock-bottom price of $24 a barrel, congressional Democrats blocked the purchase, claiming it would be an oil-industry bailout.

 

Taxpayers would have been left on the hook for the price increase since then had the Biden administration proceeded with the purchase. But simply refusing to replenish the oil supply is a risky decision given that now there’s almost no oil reserve left. America’s oil reserve has declined by 44 percent since Biden took office, according to the U.S. Energy Information Administration. The SPR is at its lowest level since its initial filling in August 1983. The reserve can hold 714 million barrels. It’s currently about half full and thus could supply America’s needs for just 17 days.

 

Prior to Biden’s tenure, the SPR releases occurred for wars or natural disasters, such as the 1991 Gulf War or various hurricanes striking the oil refineries on the Gulf Coast. Such events could cause unexpected disruptions of the oil supply.

 

The SPR’s purpose is to “diminish the vulnerability of the United States to the effects of a severe energy supply interruption, and provide limited protection from the short-term consequences of interruptions in supplies of petroleum products.” It was not intended to bail out a president’s policy of producing less American energy. But that’s how Biden has used it: more as a political reserve than a strategic one.

 

In 2021, Biden made the unprecedented move of releasing oil from the SPR to combat high fuel prices, although prices remained stubbornly high regardless. Mysteriously, the release concluded right before the 2022 midterm elections, when high gas prices were a key issue. Biden claimed his plan to release another 15 million barrels from the SPR was “not politically motivated at all.”

 

But the problem isn’t just that American taxpayers were robbed of the opportunity to buy oil at bargain prices during the last administration and then saw the SPR used in an arguable attempt to score political points under Biden. Now, if America needed to significantly increase oil use in a natural disaster or war, the reserve is already mostly depleted.

 

The SPR’s depleted state certainly shows weakness to America’s enemies, as it demonstrates a lack of capacity to fight a long war. But the situation is actually worse than that. Biden’s policies have fatally undermined America’s ability to quickly increase oil production in an emergency.

 

The number of U.S. oil-drilling rigs has still yet to recover to pre-pandemic levels. Rig counts are down 22 percent compared with March 2020, mostly due to the anti-energy policies of the Biden administration creating legal and regulatory uncertainty. Especially damaging was Biden’s blocking of U.S. energy exports, which greatly weakened the growth of this strategically vital industry, and forced America’s allies to rely on foreign dictatorships for their energy security. So America’s strategic reserves are not only depleted, but our capacity to rapidly refill them during a crisis is as well.

 

Biden has greatly shrunk the market for U.S. energy. America’s capacity to quickly ramp up energy production in the event of a global conflict is sharply limited. That’s a major problem, given that the U.S. is directly or indirectly involved in major conflicts in Israel, the Red Sea, and Ukraine.

 

The situation in Israel presents particular risk to America’s energy reserves. The U.S. has a legal obligation to sell a portion of those reserves to Israel if the latter is unable to purchase energy in international markets. Although Israel has never exercised this legal right, given the current political and military situation in the Middle East, discounting the possibility would be extremely foolish.

 

But instead of unleashing more American energy, Biden has chosen to use America’s emergency reserves to solve his own political problems, to the detriment of America’s strategic interests, and has made his country vastly more vulnerable to true emergencies.

 

One hopes Biden and congressional Democrats will stop playing politics with this strategic resource before such an emergency arises, or the consequences could be grave. Blocking the opportunity to refill the reserves when prices were low, and then using high prices as an excuse to refuse to refill them now while wastefully and non-strategically depleting the reserves for political points, is the height of irresponsibility.