High gas prices are a problem President Joe Biden has always tried to fix – and a year’s worth of extraordinary efforts have resulted in significant cost reductions.
With Biden’s latest push next Wednesday release 15 million barrels are from strategic reserve of the United States and consider additional withdrawals this winter, he told frustrated voters in advance midterm elections which the White House has not given up.
He rejected the notion that politics played a big part in his latest act. But the matter has clear political implications as the president’s approval rating has shifted against changes in gasoline prices, which have remained high despite falling since their June peak.
“They’re not falling fast enough,” Biden said in remarks at the White House. “Families are hurting. You’ve heard me say that before, but I get it. “
Biden always says that the high price is the fault of Russia invaded Ukraine earlier this year. Any drop in gas prices – no matter how large – the President attributes to his policies. Biden denied his latest move was about the upcoming election, although he told the Associated Press in an interview earlier this year that his approval ratings appeared to go against gas prices.
“It’s not politically motivated at all,” Biden said Wednesday in response to reporters’ questions.
The open question is whether the announcement will make a difference to voters in the November Senate and House races. Biden’s announcement comes amid a drop in gas prices over the past two weeks. Still, a gallon of gas is still averaging $3.85, up from a year ago when Biden called $3.35 a gallon a strain on families and from about $2.40. a gallon during his 2021 inauguration.
Wednesday’s announcement completes the release of 180 million barrels authorized by Biden in March, which was originally supposed to take place over six months. Biden also ordered the release of 50 million barrels by November 2021 and promised to investigate possible price manipulation.
The withdrawal pushed the nation’s strategic reserves to their lowest level since 1984 in what the administration called a “bridge” until domestic production could increase. The stockpile currently holds about 400 million barrels of oil, a level that opponents say has more to do with Biden’s efforts to help his Democratic comrades than to spur more oil production in the US.
During a debate in the Florida Senate Tuesday night between Republican Senator Marco Rubio and US Representative Val Demings, Rubio complained that the US was “begging” other countries to supply oil and running out of oil. exhausted its reserves to help Democratic candidates.
“Our oil reserves don’t exist to win midterms,” Rubio said. “They exist to help this country in an emergency or during a hurricane.”
The president’s political fortunes appear to be tied to gas prices. In the AP-NORC Center for Public Affairs poll, support for Biden recovered from a low of 36% in July to 45% in September. That period largely coincided with the price drop from record levels. Prices started to rise again in late September, falling only slightly in recent weeks.
Biden also wants to open the door to additional oil releases this winter in an effort to bring prices down. But administration officials would not detail how much the president would be willing to mine, nor how much they would like domestic production to increase to end the withdrawal.
Biden said the U.S. government will replenish strategic reserves when oil prices are at or below $67 to $72 a barrel, which administration officials say will support domestic production by securing demand levels. basic demand. At the same time, he continued his criticism of the profits made by oil companies – echoing a bet made this summer that public condemnation would matter more to these companies. rather than shareholder focus on profits.
The offer to buy back oil to fill reserves could make sense for voters, as it could lead to greater production in the US. transport.
An analysis Monday by ClearView Energy Partners, an independent energy research firm based in Washington, suggested that the two states that could decide on equal control of the Senate – Nevada and Pennsylvania – are sensitive to energy prices. The analysis notes that gas prices over the past month have risen above the national average in 18 states, where 29 House seats are potentially “risky”.
Kevin Book, chief executive officer at ClearView, said in a follow-up analysis that the federal offer to buy oil for storage “could give at-risk Democrats in moderate counties with some oil-friendly political collateral. It could also provide President Biden with a pro-oil talking point before he heads to producer (and swing) Pennsylvania on Thursday. “
The call to increase production marks a continuation of Biden, who has tried to shift the former US fossil fuels and towards additional energy source to meet US and global supplies due to disruptions from Russia’s invasion of Ukraine and production cuts announced by the Saudi-led oil group.
OPEC+’s potential loss of 2 million bpd – 2% of global supply – prompted the White House to announce Saudi Arabia was on the side of Russian President Vladimir Putin and pledged there would be consequences if the cuts were to be made. Supply can push up energy prices. According to the Energy Information Administration, Biden’s latest 15 million-barrel release will not include all-day oil use in the US.
Even if voters want cheaper gasoline, the expected increase in supply will not materialize due to a weaker global economy. The US government last week revised down its forecast, saying that domestic firms will produce 270,000 bpd less in 2023 than it forecast in September. Global output will be 600,000 bpd lower compared to September forecast.
The puzzle for Biden is that oil production has yet to return to pre-pandemic levels of about 13 million bpd. The revised government forecast is that production will average 12.4 million barrels next year.
Biden said the pledge to replenish reserves would give US energy companies enough confidence to ramp up production, even as the administration pushes to switch to renewables.
“We give you more certainty, so you can act now to increase oil production,” Biden said.
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