- The Strategic Petroleum Reserve (SPR) is at its lowest level since 1983, with only 50% of its storage capacity filled
- President Biden authorized significant releases as a political move ahead of the 2022 midterm elections
- Biden's energy policies have led to a significant increase in energy prices
- The ongoing Israel-Hamas conflict threatens the stability of the Middle East and can impact global oil supply
- The oil markets spiked, with WTI crude closing up 5.8% at $87.69 in reaction to concerns about the conflict's potential to disrupt the oil supply
Just as his approval ratings hit rock bottom, the nation’s Strategic Petroleum Reserve is half-empty and at its lowest since 1983.
President Biden’s energy policy is the root cause of many evils. Be it the Russia-Ukraine war, Bidenflation, food security, national security, etc. Since President Biden took office, energy prices have climbed 39%, with gasoline prices increasing by 53% and fuel oil by 61%.
Fifty years ago, in 1973, OPEC imposed an embargo on the U.S. due to its support for Israel during the Yom Kippur War. In response to this event, the U.S. established the Strategic Petroleum Reserve (SPR) in 1975 to enhance America's national energy security during supply disruptions.
The SPR stores oil in salt caverns thousands of feet below ground and has a storage capacity of 727 million barrels of oil. The U.S. consumes 20 million gallons of oil a day. On average, the SPR has held 33 days of supply.
The U.S. utilized the SPR for emergency releases in response to Operation Desert Storm in 1991, the aftermath of Hurricane Katrina in 2005, and the disruptions caused by the Libyan civil war in 2011.
But, President Biden has converted the Strategic Petroleum Reserve to a Strategic Political Reserve.
Like he signed an executive order to waive student loans to attract young voters, Biden timed significant releases before the 2022 midterms to bring down gasoline prices to mollify voters.
President Biden’s decision to use the SPR for political purposes, compromising national security, was myopic and irresponsible.
American Petroleum Institute (API) said, “The SPR was established to reduce the impact of severe supply disruptions, not as a long-term solution to the economic pain Americans are feeling at the pump. We urge the administration to recognize that short-term policy-making is no substitute for the long-term strategies needed to encourage energy production.”
The SPR has not been replenished due to high oil prices. The Department of Energy (DOE) scuttled replenishment plans when the oil price hit $80 a barrel. The restocking to old levels will likely take several years.
As the nation’s vulnerability increases, why not move the goalpost by lowering the SPR target to make ourselves feel good! That’s what a recent analysis by a senior economist at the Dallas Fed did on October 3, just a few days before the onset of the Hamas-Israel conflict.
The Dallas Fed paper said:
While the SPR peaked at 727 mb and held more than 600 mb just two years ago, current and prospective oil market conditions indicate the U.S. is unlikely to require that level of strategic inventories again. Moreover, refilling the SPR does not appear to be as pressing an emergency as the drop in absolute levels initially suggests. Rather, an appropriate target for the refilled level might be above what current funding allows but well below the maximum capacity of the reserves.
The Israel-Hamas conflict threatens the stability of the Middle East and can impact the global oil supply. On Friday, the oil markets spiked, with WTI closing up 5.8% to $87.69 in reaction to concerns about the conflict’s potential to upset the oil supply. The SPR was founded precisely to address times such as now. But Biden’s political maneuvers have compromised national security.
Biden’s war on fossil fuels transformed the U.S. from energy independence to energy dependence. The President would rather pipe oil from countries like Russia, Venezuela, Saudi Arabia, or OPEC+.
By doing so and coupled with politically motivated releases, President Biden has compromised the original purpose of the SPR and dented American national security for years to come.
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