WASHINGTON — Can President Joe Biden bring down gas prices? This week the White House announced it would tap into the Strategic Petroleum Reserves to combat high energy prices.
If you aren’t familiar with the Strategic Petroleum Reserves and how they work, we went through the experts to explain.
WHAT ARE THE STRATEGIC PETROLEUM RESERVES?
“The nation found that because we consume a lot of crude oil and we are subject to oil-producing nations cutting off supply,” DeHaan said. “The leaders thought we should probably have some sort of emergency reserve and that's how the SPR was born back in the 1970s.”
The Department of Energy reports the government currently has more than 600 million barrels of oil stored in facilities in Texas and Louisiana along the Gulf Coast.
WHEN HAVE THEY BEEN USED BEFORE?
“Very rarely have we seen releases from the strategic reserve,” DeHaan said.
The last time we tapped into the reserves was in 2011. According to the Congressional Research Service, that year, President Barack Obama released millions of barrels of oil to curb a conflict in Libya that caused a massive worldwide oil supply disruption.
“It has never been used when there hasn't been a disruption,” DeHaan explained. “So this situation would be different in that this is primarily being used to bring prices down, even though there's no physical disruption.”
WILL THE LATEST RELEASE CAUSE IMMEDIATE CHANGES TO GAS PRICES?
“The President authorized up to 50 million barrels of release, that does not mean that all of a sudden tonight that there's more oil on the market," said DeHaan.
The Department of Energy reports that it takes at least 13 days for the oil released to hit the markets. About 32 million of the gallons will get released over several months, according to the White House. The other 18 million will come out over the next several years.
“This is not necessarily flooding the market with unexpected oil; it is bringing up the timeline of what had previously been agreed to," said DeHaan.
As to what effect this could have on gas prices, DeHaan said it could bring prices down a few cents in the next few weeks, but any effect would not be immediate.
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