Biden Should Draw down the Strategic Petroleum Reserve!

Since January, gas prices have been continuously increasing and have reached $3.415 nationwide and a whopping $4.682 in California. High gas prices are particularly burdensome on populations of people who drive long distances to work whether that’s urban commuters in LA or the people who drive from the 124 miles from Paintsville, KY to work at the Toyota plant in Georgetown, KY outside Lexington. People also commute over distance to work at the University, Hospital, or one of the factories around my town of Morehead, KY. Likewise, the local Walmart Superstore is a magnet for shoppers from isolated rural areas who have little alternative for clothes, school supplies, fresh vegetables, etc.

Political blame for rising gas prices is settling on the Biden administration and they need to both do something and need to be seen doing something. I imagine the Biden administration is considering their options but the easiest thing they can do is to release oil from the Strategic Oil Reserve which was set up as a mechanism for relieving surges in gas prices.

According to Cherise Threewit of HowStuffWorks: “The Strategic Petroleum Reserve is a government-owned stash of oil that’s stored in four salt caverns in the Gulf Coast region. The reserve has a capacity of 727 million barrels (though there are plans to increase storage by expanding the existing caverns and building additional storage sites).”

The Obama administration siphoned 30 million barrels of oil from the Reserve in response to oil market dislocations caused by turmoil in Libya during the 2011 Arab Spring. Given the enormity of the dislocations associated with the pandemic and the need for economic recovery, the Biden administration would be well justified in drawing off however million barrels of oil needed to bring gas prices back down to around $2.50 or whatever they were when Biden took office.

It could be argued that cheap gas is bad climate and environmental policy, but I wonder if that’s true. One effect of high gas prices is to encourage the big oil companies and wildcatters to look for more oil, generate political pressure to open up oceans and wildness preserves to oil exploration, and set up more fracking operations. People use more gas when it’s cheap, but cheap gas reduces the pressure for oil exploration and might be the better climate policy in the long run.