These measures are an attempt to reduce gas prices, while at the same time making oil companies responsible for increasing supply. The dramatic move comes as the months leading up to the midterm elections have become a political issue.
“After consultation with allies and allies, the president will release the largest oil reserves in history, on average every day – one million extra barrels on the market for the next six months,” the White House said. . “The volume of this output is unprecedented: the world has never released oil reserves at a rate of 1 million per day for this long period of time.
This output is 180 million barrels of oil.
No action has had a significant impact on gas prices, and global limitations on Russian energy exports continue to rise due to rising prices.
The United States consumes about 20 million barrels of oil a day, and global consumption is about 100 million barrels. Biden’s planned releases will put more oil on the global market and reduce costs.
The president also calls on Congress to “pay for wells that companies have not used for years and wells that have been left unproduced on acres of public land.” For months, the Biden administration has publicly pushed back the notion that it is pushing oil producers out of high GDP, citing millions of acres of land with approved permits for oil and gas production.
“Leasing acres and companies producing from existing wells will not face higher fees,” says a fact sheet released by the White House. “
Biden will also issue an order enforcing the Defense Production Act to encourage the domestic production of vital minerals needed to manufacture batteries for electric vehicles and long-term energy storage.
The White House move adds important minerals such as lithium, nickel, graphite, cobalt and manganese to the list of items covered under the 1950 Defense Production Act, which is a Korean wartime law that allows the president to use his emergency powers to issue major orders. Expanding the capacity and distribution of a particular type of product or product. This will allow management to support the production and processing of these vital minerals needed for clean energy conversion.
According to the White House, the Department of Defense will exercise this power and do so in consultation with tribal communities, using strong environmental, labor and community standards.
Biden is dealing with a major political problem
Nevertheless, the current cost increase began months ago because oil demand increased when the corona virus infection subsided. The White House has expressed frustration that oil companies have not returned their production to pre-epidemic levels, focusing on paying dividends to investors.
There is an internal debate among executives about how to pursue oil and gas companies that do not increase production. Biden scolded them in previous comments, but some officials believe the full-blown campaign against the companies could backfire.
Russia’s occupation of Ukraine has given Biden another leg up. Earlier this month, Biden sought to blame the Russian president for the rise in prices: “Make no mistake: the current rise in gas prices is largely Vladimir Putin’s fault.” Since then, he has repeated the phrase “Putin’s price rise”.
This story has been updated with background information.
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