The White House announced on Thursday, March 31, that it would release the largest historical amount of barrels of oil per day from its reserves to reduce gasoline prices and combat inflation, The Hill reported.
Beginning in May, the United States will release 1 million barrels of oil per day (BPD) from its Strategic Petroleum Reserve (SPR) for six months, which would result in a total release of about 180 million barrels. It will be a “wartime bridge to additional U.S. production and other production that we expect later this year,” the Biden Administration said.
The president confirmed the announcement on Thursday afternoon from the White House.
“This is a moment of consequence and peril for the world, and pain at the pump for American families,” Biden said.
“It’s also a moment of patriotism,” the president declared, calling on U.S. oil companies to drill more and criticizing their profits.
“Enough of lavishing excessive profits on investors and payouts and buybacks when the American people are watching, the world is watching,” Biden said.
“This is not the time to sit on record profits. It’s time to step up for the good of your country, the good of the world, to invest in immediate production that we need to respond to Vladimir Putin, to provide some relief for your customers, not investors and executives,” he added.
President Biden also urged lawmakers to impose tariffs on companies that do not use wells from their leases on public lands.
In contrast, the oil and gas industry argues that leasing is only the first step, but obtaining fuels requires permits to investigate, through drilling, whether the land contains extractable fuel.
In this regard, Republican legislators have stated that the problem lies in the Biden administration’s reluctance to grant oil permits and the construction of new pipelines.
Democrats argue that the U.S. needs to reduce dependence on fossil fuels by switching to renewable energy.
On this, Biden also announced Thursday that he would issue a directive to use the Defense Production Act for the production and processing of minerals and materials used for electric vehicle batteries, such as lithium, nickel, cobalt, graphite, and manganese, as part of his plan to reduce U.S. dependence on fossil fuels.
The Biden administration expects the announced release of reserves to create pressures that could reduce oil prices. However, it has ordered SPR releases on two previous occasions without causing a significant change in oil markets.
Furthermore, according to estimates by the International Energy Agency, the planned daily release will not reach the loss of approximately 3 million BPD from Russia that the sanctions are expected to cause, according to Reuters.