Democrats and climate activists generally supported President Joe Biden’s decision to release a record 50 million barrels of oil from America’s strategic reserve, even as the move appeared to contradict his long-term vision of combatting climate change.
The U.S. action, announced Tuesday in co-ordination with countries such as India, the United Kingdom and China, is aimed at global energy markets and helping lower gasoline prices that have risen more than a dollar per gallon since January. But it could also undermine Biden’s climate goals, including a 50 per cent cut in greenhouse gas emissions by 2030.
Some leading climate hawks, however, said they were not concerned by the move because they see it as a short-term fix to meet a specific problem. Sen. Ed Markey, D-Mass., who has focused on combatting climate change, said Biden was “taking effective action to protect Americans from oil price gouging” even as the administration continues to boost renewable energy that it hopes will eventually mean less dependence on fossil fuels.
“This is what reserves are for – defending our economy against disruption, Markey tweeted. “Profiteering can’t go unanswered, especially as Big Oil makes billions and fuels the climate crisis through exports.
The Strategic Petroleum Reserve is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. There are roughly 605 million barrels of petroleum in the reserve.
Markey and other Democrats had urged Biden to release oil from the reserve to ease prices on consumers. There have also been calls on the president to reinstate a ban on crude oil exports that was lifted in 2015. Biden has made no move to reimpose the export ban, which was repealed by congressional Republicans in a bid to assert U.S. energy dominance and promote domestic production.
Biden has authority under the legislation to declare an emergency and limit or stop oil exports for up to a year but is not expected to do so.
Kelly Sheehan, senior director of energy campaigns with the Sierra Club, hailed Biden’s actions as a way to ease Americans’ energy burdens. But she said the current spike in oil prices was a reminder that “the only way to truly achieve energy security is to rapidly transition away from risky fossil fuels like oil and gas and make it easier for more people to access clean energy.
Lorne Stockman, research director of Oil Change International, an environmental group focused on creating a “fossil-free future, said Biden should have acted sooner, if only to counter a barrage of Republican criticism blaming him for high gasoline prices.
“Presidents are always blamed for high gas prices, whether they have anything to do with it or not, Stockman said, calling the measure a small step to bring short-term relief to American consumers.
Speaking at the White House on Tuesday, Biden said the rise in gas prices made the move necessary and that it wouldn’t distract from his larger ambitions of moving toward energy independence.
“My effort to combat climate change is not raising the price of gas,” Biden said. “What it is doing is increasing the availability of jobs building electric cars like the one I drove … in a GM factory in Detroit last week.”
Americans who buy electric cars will save up to $1,000 in fuel costs this year, Biden said, “and we’re going to put those savings within reach of more Americans and create jobs installing solar panels, batteries and electric heat pumps. We can make our economy and consumers less vulnerable to these sorts of price spikes when we do that.”
Biden said the White House was looking into potential price gouging by oil companies squeezing customers while making money off lower costs. And Energy Secretary Jennifer Granholm said U.S. companies were keeping production below pre-pandemic levels in order to increase profits.
The coronavirus pandemic has roiled energy markets. As closures began in April 2020, demand collapsed and oil futures prices turned negative. Energy traders did not want to get stuck with crude that they could not store. But as the economy recovered, prices jumped to a seven-year high in October.
Sen. John Barrasso, R-Wyo., called Biden’s use of the strategic reserve, along with calls for OPEC and Russia to increase production, “desperate attempts to address a Biden-caused disaster” and no substitute for increased American energy production.
Lukas Ross, manager of climate and energy justice at Friends of the Earth, another environmental group, said the spike in gas prices shows that “our continued dependence on a volatile compound that is literally cooking the climate is exactly why we need” Biden’s sweeping social and environmental bill approved as quickly possible.
The $2-trillion bill, which has been approved in the House and is pending in the Senate, includes about $550-billion for climate change efforts, including proposals to boost wind and solar power and support electric vehicles. Republicans unanimously oppose the measure.
Biden has said the U.S. needs to transition away from oil dependence, and “now is the moment to keep that promise by urgently speeding the transition to electric cars and a renewable energy grid,” said Kassie Siegel, director of a climate law institute at the Center for Biological Diversity, another environmental group.
“Price volatility will always be part of Big Oil’s playbook,” she added. “Let’s break their stranglehold on our economy once and for all.”
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.