The Biden administration announced on Tuesday that it will release 1 million barrels of gasoline from a Northeast reserve created after Superstorm Sandy, aiming to reduce summer gas prices.
The gasoline will be sold in 100,000 barrels increments from storage sites in New Jersey and Maine. This method will foster competitive bidding to ensure gasoline reaches local retailers at competitive prices before the July 4 holiday, according to the Energy Department, According to AP News.
This initiative is designed to “lower costs for American families and consumers,” following a congressional mandate to sell off the decade-old Northeast Reserve and close it. The mandate was part of a spending deal approved in March to avoid a partial government shutdown.
The Energy Department timed the release of 1 million barrels, or approximately 42 million gallons, to offer motorists relief as the summer driving season starts.
As reported by ABC News, the average gasoline price nationwide is about $3.60 per gallon, a 6-cent increase from last year, per AAA. Utilizing gasoline reserves is one of the limited actions a president can independently take to address inflation, a significant concern during election years for the ruling party.
Energy Secretary Jennifer Granholm stated, “The Biden-Harris administration is laser-focused on lowering prices at the pump for American families, especially as drivers hit the road for summer driving season.”
By releasing the reserve strategically between Memorial Day and July 4th, they aim to ensure adequate supply in the tri-state and Northeast regions during peak demand.
White House Press Secretary Karine Jean-Pierre highlighted that this move complements President Joe Biden’s broader efforts to reduce gas and energy costs, which include historic releases from the Strategic Petroleum Reserve and major investments in clean energy. told by CNBC
In 2022, Biden significantly depleted the Strategic Petroleum Reserve following Russia’s invasion of Ukraine, reducing the stockpile to its lowest since the 1980s. This action helped stabilize rising gas prices but drew Republican criticism, accusing Biden of politicizing a reserve meant for emergencies.
The administration has since started refilling the oil reserve, which held over 367 million barrels of crude oil as of last week. Although this is lower than pre-Russia-Ukraine war levels, it remains the world’s largest emergency crude oil supply.
The Northeast gasoline sale requires the 42-million-gallon reserve to be transferred or delivered by June 30, the Energy Department noted.
Congressional Republicans have criticized the Northeast Reserve, established by former President Barack Obama, arguing that such stockpiles should be congressional initiatives.
A 2022 Government Accountability Office report stated the reserve, which has never been used, would offer minimal relief during a severe shortage and costs about $19 million annually to maintain.
GasBuddy analyst Patrick De Haan remarked that the Northeast reserve sale would minimally impact national gasoline prices, though there could be slight price reductions in the Northeast.
He pointed out that the million-barrel reserve equates to about 2.7 hours of total U.S. gasoline consumption, emphasizing that gasoline has a limited shelf life, necessitating frequent rotations.
Consequently, the U.S. is the only nation with an emergency gasoline stockpile, whereas the Strategic Petroleum Reserve holds significantly more vital emergency oil.
