The Biden administration finds itself in another bind. After draining the Strategic Petroleum Reserve (SPR) to a 39-year low last year, the administration's plans to replenish it have hit a snag due to higher than expected oil prices. The Department of Energy set a deadline of February to purchase 3 million barrels of crude for the reserves (the administration drained some 220 million barrels from the SPR last year). But so far, that plan is on hold as the DoE wants the price to be around $70 a barrel, while crude has risen to just over $80 a barrel in recent weeks.
Energy Secretary Jennifer Granholm insists they have a Plan B for refilling the reserves, but is providing few details other than telling reporters to watch for an announcement. In the meantime, she vows Biden will veto a Republican-backed bill that would restrict the president's ability to draw from the SPR in the future.
This entire scenario was predictable, according to David Holt, president of the Consumer Energy Alliance. "This really just shows the problem with using the Strategic Petroleum Reserve for political reasons, rather than the emergency reasons for which it was created," he tells KTRH. "You want to save the SPR for global conflicts and situations that really warrant that emergency release, not just for high prices...that's politics."
Now the administration is stuck with the choice of keeping the SPR at a historically low level which could endanger national security, or having taxpayers pay a pretty penny to fill it up. "Ideally you'd like to fill it back up at a reasonable price," says Holt. "Unfortunately, I think the upward pressure on the price of a barrel of oil is only going to remain for the time being...this puts this administration in a difficult situation."
All of this goes back to the president's move to use the reserves as a price control lever, which experts have repeatedly criticized. "The whole underlying premise behind the SPR releases was flawed from the very beginning," says Holt. "And this is just showing why it was flawed now, because they're unable to fill it back up without costing taxpayers even more money."