Facing tough midterms, Biden released oil from US reserves

WASHINGTON – The high price of gasoline is a problem that President Joe Biden continues to fix – and after about a year of extraordinary efforts he has done little to lower the cost significantly.

With the latest push Biden on Wednesday released 15 million barrels US strategic reserve and consider additional withdrawals this season, he told voters frustrated ahead of midterm elections that the White House is not giving up.

He rejected the notion that politics played a role in his latest actions. But the issue has clear political implications as the president’s approval rating has moved inversely with changes in gasoline prices, which remain high despite falling from their June peak.

“They’re not falling fast enough,” Biden said in remarks at the White House. “The family is hurting. You’ve heard me say it before, but I know.”

Biden has repeatedly said that high prices are his fault Russia invaded Ukraine earlier this year. Any decrease in the price of gas – no matter how big – the president points to his policy.

Biden denied his latest move was about the upcoming election, though he told The Associated Press in an interview earlier this year that his approval rating appears to be moving in the opposite direction of gas prices.

“It’s not politically motivated,” Biden said Wednesday in response to a reporter’s question.

An open question is whether the announcement will make a difference to voters in Senate and House races in November that could be decided by thin margins. Biden’s announcement comes as gas prices have fallen over the past two weeks. But a gallon of gas still averages $3.85, up from a year ago when Biden called for $3.35 per gallon for families and from roughly $2.40 per gallon during his 2021 primary.

Wednesday’s announcement completes the release of 180 million barrels authorized by Biden in March that was originally supposed to take place in six months. Biden has also ordered the release of 50 million barrels in November 2021 and promised to investigate the possibility of price gouging.

The withdrawal has sent the nation’s strategic reserves to their lowest level since 1984 in what the administration called a “bridge” until domestic production can increase. Reserves now contain about 400 million barrels of oil, a level opponents say has more to do with Biden’s efforts to help fellow Democrats than to boost U.S. oil production.

During Tuesday night’s Florida Senate debate between Republican Sen. Marco Rubio and U.S. Democratic Rep. Val Demings, Rubio complained that the U.S. is “begging” other countries for oil and depleting its own reserves to help the Democratic candidate.

“Our oil reserves are not there to win the midterms,” ​​Rubio said. “It’s there to help this country in an emergency or in the middle of a storm.”

The president’s political fortunes seem to be tied to gas prices. In an AP-NORC Center for Public Affairs poll, support for Biden recovered from 36% in July to 45% in September. That period largely overlapped with a drop in prices from record levels. The price started to rise again towards the end of September, only to drift down slightly in the new week.

Biden also wants to open the door to additional oil releases this winter in an effort to keep prices down. But administration officials would not detail how much the president would be willing to tap, or by how much they want domestic production to increase to stop the withdrawal.

Biden said the U.S. government would draw back on strategic reserves when oil prices rise or fall below $67 to $72 a barrel, which administration officials said would support domestic production by guaranteeing the level of basic demand. At the same time, he renewed his criticism of the benefits reaped by oil companies – repeating the bet made this summer that public condemnation will be more of a problem for these companies than the shareholders’ focus on returns.

The offer to buy back oil to fill reserves could be meaningful for voters, as it could lead to greater production in the US. It is possible to call out Republican critics that Biden should boost output by making more federal land available for drilling and approving the construction of pipelines. for transportation.

An analysis Monday by ClearView Energy Partners, an independent energy research firm based in Washington, suggested that the two states that could decide control of the Senate evenly split – Nevada and Pennsylvania – are sensitive to energy prices. The analysis noted that gas prices in the past month rose above the national average in 18 states, where 29 seats are potentially “at risk”.

Kevin Book, managing director at ClearView, said in a follow-up analysis that the federal offer to buy oil for reserves “could furnish at-risk Democrats in moderate districts with a modicum of oil-friendly political assurance. It could also give President Biden a pro-oil talking point before he heads to the producer (and swing) state of Pennsylvania on Thursday.

The call to increase production marks a continuation of the about-face by Biden, who has tried to move the US fossil fuel back and additional energy sources to satisfy the US and global supply as a result of the disruption of the Russian invasion of Ukraine and production. cuts announced by the Saudi Arabian-led oil cartel.

The prospective loss of 2 million barrels a day – 2% of global supply – by OPEC+ has the White House saying that Saudi Arabia is siding with Russian President Vladimir Putin and promising consequences for supply cuts that could raise energy prices. Biden’s latest release of 15 million barrels will not cover the US’s daily oil use, according to the Energy Information Administration.

Although voters want cheaper gasoline, the expected gains in supply have not materialized due to a weaker global economy. The US government last week revised downwards its forecast, saying domestic firms would produce 270,000 more barrels a day in 2023 than it forecast in September. Global production will be 600,000 barrels a day lower than forecast in September.

The difficult math for Biden is that oil production has not yet returned to pre-pandemic levels of around 13 million barrels a day. The government’s revised forecast is for production to average 12.4 million barrels next year.

Biden said his commitment to replenishing reserves should give US energy companies enough confidence to increase production, even as the administration pushes for a shift to renewable energy.

“We’re giving you more certainty, so you can act now to increase oil production,” Biden said.

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