Biden announces historic oil reserve release, along with other steps, to reduce gas prices (1 Viewer)

[Chomsky]

Biden announces historic oil reserve release and presses oil companies to do their part to reduce gas prices

President Joe Biden on Thursday announced an unprecedented release of oil from US reserves and several steps his administration is taking to punish oil companies for not increasing production from unused leases on federal land.

www.cnn.com

(CNN)President Joe Biden is announcing an unprecedented release of oil from US reserves and taking steps to punish oil companies for not increasing production from unused leases on federal land, the White House says.

"After consultation with allies and partners, the President will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average -- every day -- for the next six months," the White House said. "The scale of this release is unprecedented: The world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up."
The release would amount to 180 million barrels of oil.

The President is also calling on Congress to "make companies pay fees on wells from their leases that they haven't used in years and on acres of public lands that they are hoarding without producing." "Companies that are producing from their leased acres and existing wells will not face higher fees," a fact sheet released by the White House reads, "but companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre."

Biden also will issue a directive to invoke the Defense Production Act to spur domestic production of critical minerals needed to manufacture batteries for electric vehicles and long-term energy storage.
The move from the White House adds critical minerals such as lithium, nickel, graphite, cobalt and manganese to the list of items covered by the 1950 Defense Production Act, a Korean War-era law allowing the President to use emergency authority to make large orders of a certain type of product or expand productive capacity and supply. It will allow the administration to support the production and processing of these critical minerals needed for a clean energy transition.
The Department of Defense will implement this authority, according to the White House, and will do so in consultation with tribal communities and using strong environmental, labor, and community standards.

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It looks like Joe Biden has a substantive and actionable plan to lower gas prices:

1] Six months of historic strategic reserve releases
2] Penalties for Oil companies that are not using their drilling licenses.

In addition, he also is implementing an emergency Defense Production Act order to re-classify & produce more critical minerals, which will also assist in our transition to clean energy.

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I applaud:

1] Taxing Oil Companies that sit on their licenses without producing. This will produce both more oil and more tax revenue. A double win!

2] Making us both more sufficient in critical minerals, thereby moving forward the transition to cleaner energy.

 

[Nomad4Ever]

Ok but can we like invest in nuclear? We won't be truly energy independent until we stop needing to import oil from anywhere, not just Russia.

The battery thing is nice but we quite literally don't have enough raw materials in the world to make enough batteries to meet our energy needs.

 

[Chomsky]

Ok but can we like invest in nuclear? We won't be truly energy independent until we stop needing to import oil from anywhere, not just Russia.

I agree.

I believe nuclear, solar, & wind energy, powering electric transportation, might be the way forward.

The battery thing is nice but we quite literally don't have enough raw materials in the world to make enough batteries to meet our energy needs.

Of that, I have no knowledge.

 

[Fletch]

Draining the strategic petroleum reserve just to trim pump prices by a few cents is short term thinking since the reserve will have to be refilled at some point. All this is doing is guaranteeing that high prices will last several months longer than they would have without this action.

 

[ttwtt78640]

Biden announces historic oil reserve release and presses oil companies to do their part to reduce gas prices

President Joe Biden on Thursday announced an unprecedented release of oil from US reserves and several steps his administration is taking to punish oil companies for not increasing production from unused leases on federal land.

www.cnn.com

--

It looks like Joe Biden has a substantive and actionable plan to lower gas prices:

1] Six months of historic strategic reserve releases
2] Penalties for Oil companies that are not using their drilling licenses.

In addition, he also is implementing an emergency Defense Production Act order to re-classify & produce more critical minerals, which will also assist in our transition to clean energy.

--

I applaud:

1] Taxing Oil Companies that sit on their licenses without producing. This will produce both more oil and more tax revenue. A double win!

2] Making us both more sufficient in critical minerals, thereby moving forward the transition to cleaner energy.

Hmm… that (bolded above) idea seems like it would force oil companies to surrender (cancel) those (currently idle) leases to avoid paying additional fees (penalties?).

That would assure less potential for oil companies to increase their production, by enacting a “use it immediately or lose it” federal lands lease policy. Coupled with Biden’s prior ban on issuing any new (oil or natural gas) leases on federal lands that is insane.

 

[ttwtt78640]

Draining the strategic petroleum reserve just to trim pump prices by a few cents is short term thinking since the reserve will have to be refilled at some point. All this is doing is guaranteeing that high prices will last several months longer than they would have without this action.

Yep, because replenishing the SPR will increase demand.

 

[Khayembii Communique]

Draining the strategic petroleum reserve just to trim pump prices by a few cents is short term thinking since the reserve will have to be refilled at some point. All this is doing is guaranteeing that high prices will last several months longer than they would have without this action.

Yes, they covered this in the release.

The Department of Energy will use the revenue from the release to restock the Strategic Petroleum Reserve in future years. This will provide a signal of future demand and help encourage domestic production today, and will ensure the continued readiness of the Strategic Petroleum Reserve to respond to future emergencies.

FACT SHEET: President Biden’s Plan to Respond to Putin’s Price Hike at the Pump | The White House

Americans face rising prices at the pump because of Putin’s Price Hike. Since Putin accelerated his military build-up around Ukraine, gas prices have

www.whitehouse.gov

 

[Khayembii Communique]

Hmm… that (bolded above) idea seems like it would force oil companies to surrender (cancel) those (currently idle) leases to avoid paying additional fees (penalties?).

That would assure less potential for oil companies to increase their production, by enacting a “use it immediately or lose it” federal lands lease policy. Coupled with Biden’s prior ban on issuing any new (oil or natural gas) leases on federal lands that is insane.

Yes, use it immediately or pay for it is precisely the point.

 

[Chomsky]

Hmm… that (bolded above) idea seems like it would force oil companies to surrender (cancel) those (currently idle) leases to avoid paying additional fees (penalties?).

That would assure less potential for oil companies to increase their production, by enacting a “use it immediately or lose it” federal lands lease policy. Coupled with Biden’s prior ban on issuing any new (oil or natural gas) leases on federal lands that is insane.

Interesting analysis.

A quick Google shows the permits are for 10 years.

I don't know if they're fungible and if there is a tradeable market for them.

 

[Fletch]

Yes, they covered this in the release.

The Department of Energy will use the revenue from the release to restock the Strategic Petroleum Reserve in future years. This will provide a signal of future demand and help encourage domestic production today, and will ensure the continued readiness of the Strategic Petroleum Reserve to respond to future emergencies.

FACT SHEET: President Biden’s Plan to Respond to Putin’s Price Hike at the Pump | The White House

Americans face rising prices at the pump because of Putin’s Price Hike. Since Putin accelerated his military build-up around Ukraine, gas prices have

www.whitehouse.gov

Yes, that is what they say, but they cannot restock it in 'future years.' It has to be restocked immediately or we will have no reserves in case of an actual emergency.

 

[Khayembii Communique]

Yes, that is what they say, but they cannot restock it in 'future years.' It has to be restocked immediately or we will have no reserves in case of an actual emergency.

First, this is an actual emergency.

Second, they're talking about releasing 180m bbls. The SPR is at like 625m bbls so there will still be ~445m bbls in the reserve.

 

[Chomsky]

Yes, they covered this in the release.

The Department of Energy will use the revenue from the release to restock the Strategic Petroleum Reserve in future years. This will provide a signal of future demand and help encourage domestic production today, and will ensure the continued readiness of the Strategic Petroleum Reserve to respond to future emergencies.

FACT SHEET: President Biden’s Plan to Respond to Putin’s Price Hike at the Pump | The White House

Americans face rising prices at the pump because of Putin’s Price Hike. Since Putin accelerated his military build-up around Ukraine, gas prices have

www.whitehouse.gov

Thank you for your comments & source.

If this was covered in my OP article, I would have included it in my excerpts.

 

[ttwtt78640]

Interesting analysis.

A quick Google shows the permits are for 10 years.

I don't know if they're fungible and if there is a tradeable market for them.

I’m not sure how these federal land lease contracts work either, but this seems be an effort to change their terms after the fact.

 

[Chomsky]

Yes, that is what they say, but they cannot restock it in 'future years.' It has to be restocked immediately or we will have no reserves in case of an actual emergency.

I would argue there is a strategic component: The world is at war, with oil & petroleum front & center.

 

[Chomsky]

I’m not sure how these federal land lease contracts work either, but this seems be an effort to change their terms after the fact.

That's exactly the idea; it's a strategic emergency order under the Defense Production Act.

Biden asked nicely, for quite awhile now. They didn't listen. He acted.

 

[trixare4kids]

Draining the strategic petroleum reserve just to trim pump prices by a few cents is short term thinking since the reserve will have to be refilled at some point. All this is doing is guaranteeing that high prices will last several months longer than they would have without this action.

You are correct. It's nothing but a temporary band-aid solution for a big wound.

 

[ttwtt78640]

Yes, that is what they say, but they cannot restock it in 'future years.' It has to be restocked immediately or we will have no reserves in case of an actual emergency.

This is a political emergency - the mid-term elections are rapidly approaching.

 

[Fletch]

This is an actual emergency...

Lol. No it isnt. And even if it were, you would have to refill this reserve as quickly as possible.

 

[ttwtt78640]

That's exactly the idea; it's a strategic emergency order under the Defense Production Act.

Biden asked nicely, for quite awhile now. They didn't listen. He acted.

The article stated “ask congress to…” which would not be necessary under the DPA (which is to be used for the “green” parts of his plan).

 

[trixare4kids]

This is a political emergency - the mid-term elections are rapidly approaching.

B i n g o

In fact, anything note-card-reader-in-chief does from today and up until to the midterms is for political opportunity. Blaming Putin and oil companies is so lame....

 

[Loulit01]

• Why is there a Strategic Petroleum Reserve?

Established in the aftermath of the 1973-74 oil embargo, the SPR was established to counter a disruption in commercial oil supplies which could threaten the U.S. economy. It is also the critical component for the United States to meet its International Energy Agency obligation to maintain emergency oil stocks.

SPR FAQs

Crude Oil Storage by Site (as of December 31, 2023)

www.energy.gov

Biden is using the Strategic Petroleum Reserve for exactly the purpose it was created. Doesn't the loony far right ever get tired of inventing, rationalizing, twisting, obfuscating and contorting to knock Biden only to be proven wrong? Everyone who criticized this initiative should be embarrassed and ashamed. Get a clue.

 

[Chase Morgan]

This is a political emergency - the mid-term elections are rapidly approaching.

Good point

We need to do everything humanly possible to keep filthy, corrupt, incompetent republicans in the minority … where they so richly belong...

 

[RAMOSS]

Ok but can we like invest in nuclear? We won't be truly energy independent until we stop needing to import oil from anywhere, not just Russia.

The battery thing is nice but we quite literally don't have enough raw materials in the world to make enough batteries to meet our energy needs.

That depends. There is an Australian company that has gone into prototyping a graphne alumium battery. If it lives up to anywhere near it's hype, it will pretty much be a drop in replacement for lithium ion batteries that do not use any of the rare earths. It literally is two very common substances, Graphene and aluminum.
They have built the coin type battery prototype factory, and have delivered prototypes to customers for evaluation, and are working on getting the pouch type (which ev cars could use) protogype factory built

Developer Of Aluminum-Ion Battery Claims It Charges 60 Times Faster Than Lithium-Ion, Offering EV Range Breakthrough

The graphene aluminum-ion battery cells from the Brisbane-based Graphene Manufacturing Group (GMG) are claimed to charge up to 60 times faster than the best lithium-ion cells and hold more energy.

www.forbes.com

 

[Fletch]

I would argue there is a strategic component: The world is at war, with oil & petroleum front & center.

The world is not at war and the reserve has to be replenished once Biden drains it. That will only prolong the high cost of fuel. And Im not sure how taxing oil companies translates into lower gas prices.

 

[Taylor]

I don't expect this will accomplish anything, but it does give the illusion that he's trying.