The U.S. Strategic Petroleum Reserve (SPR) is supposed to be saved for times of war and serious crisis.
But Joe Biden decided to use the reserve to artificially lower gas prices before the 2022 elections, leaving the country extremely vulnerable.
And now the Department of Energy is trying to justify its plans to refill the reserve, but their math simply isn’t mathing.
DOE is starting to replenish energy stockpiles
President Joe Biden nearly tapped all of the nation’s Strategic Petroleum Reserve (SPR), leading to the lowest levels seen since the 1980s to lower gas prices just before the 2022 elections.
You might remember when people started putting stickers of Biden that said, “I did that” pointing to high gas prices just before the election. The Biden administration begged OPEC to sell more oil, and when they rejected him, he drained the Oil Reserve.
But now, the U.S. Department of Energy (DOE) says it will request to buy 3 million more barrels of oil to start replenishing what Biden has depleted.
The President released over 225 million barrels of oil from the SPR between March 2022 and August 2023.
The DOE has been buying more of the fossil fuel monthly, and in its most recent announcement, the agency claims it’s been buying the oil for less than what it was sold for over the past few years.
According to the DOE, that makes the move a “good deal” for U.S. taxpayers.
However, even if the federal government were to buy 3 million barrels of oil every month, it would still take a whopping 75 months to bring the SPR back to the level it was before Biden started draining it dry.
Yet a DOE statement said that the plan “is a continuation of DOE’s strategy of consistent solicitations aimed at purchasing oil when it can be purchased at a good deal for taxpayers.”
But Tim Stewart, president of the U.S. Oil and Gas Association, said it’s not a great deal when you take a closer look at the historic average price of oil, which was less than half of what the DOE is paying now.
The DOE purchased 13.83 million barrels of oil in the last months of 2023 at an average price of $77.31 per barrel, below the average price of $95 per barrel when it was sold in 2022.
Stewart says that the average price paid per barrel in the SPR has been much lower in the past, at closer to $29.70 per barrel.
He said, “We are purchasing refill barrels at twice the historic average. Yes, it comes at a cost.”
While Stewart concedes that it’s better to purchase oil at $75 per barrel instead of at $95, the federal government still needs to buy a massive amount to refill the SPR to its original levels.
He also mentioned that former President Donald Trump had included $3 billion in funding for oil purchases, as part of the pandemic stimulus package.
During that time, crude oil was less than $25 per barrel due to lower levels of demand, and Trump planned to top off the SPR while oil prices were low.
Democrats in Congress killed the funding proposed by Trump with Sen. Chuck Schumer (D-NY) saying the move was made to eliminate “a $3 billion bailout for big oil.”
A missed opportunity
According to Stewart, the government “could have picked up several hundred million barrels at $15, but because it was what President Trump wanted, Congress said no.”
He also said that if Congress would have approved the funding, then Biden’s decision to drain 225 million barrels wouldn’t be as much of an issue as it is now.
“Prior to 2022, the average person knew nothing about the SPR. That has completely changed. When the lovely 75-year-old blue-haired lady at church complains to me how Biden has drained the SPR – they must have caught the public’s attention,” he added.
Steward also compared the DOE’s recent purchases to a teenage son who’s allowed to use the family car and brings it home with a half-empty gas tank, then says it’s OK because he plans to put a gallon in today and then another gallon in tomorrow.
“This is how the voters see the Biden Administration’s management of the SPR,” he said.
Informed American will keep you up-to-date on any developments to this ongoing story.