In an abundant year for American energy policy ideas that are the equivalent of shooting the economy in the foot, one stands out for its simplicity: the giant, empty caverns known as the Strategic Petroleum Reserve (SPR).
When gasoline prices surged in 2021, the Biden Administration first started tapping the SPR. It was just 11 months into a term that had seen the rapid rise in energy prices following the Administration’s open declaration of hostility toward the American oil and gas industry. The Russian invasion of Ukraine goosed prices higher, and the Administration again turned to the SPR in 2022 in an effort to show America that it was doing something to alleviate the pain at the pump. It drained the SPR to the lowest level in 40 years, while continued higher energy prices contributed to the highest inflation in 40 years.
The Administration bragged about the oil depletions as “record releases,” which is like gloating about emptying the household savings account to invest in a worthless boondoggle. That is exactly what happened; the SPR releases provided a few days of temporary relief before prices shot higher. As energy prices stayed high, inflation worsened.
Today, those giant storage caverns – created to aid the U.S. in a global energy crisis, not for political expediency – remain empty, with apparently no plan for them to be replenished. In fact, one report predicts it will take decades to restock the reserves from their current all-time low of a mere 20 days supply. Consumer Energy Alliance warned over a year ago that draining the SPR for political purposes without lifting restrictions on American oil and gas production would prove a costly mistake.
So here we are, watching gas prices streak past an eight-month high. At the same time, the Administration continues to send negative market signals by – for the first time in history – failing to produce a new federal offshore leasing plan, as required by Congress. Due over a year ago, it will not be ready until the end of this year, according to the Interior Department.
R&I ~ MJM
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