Biden: ‘My Administration Has Not Stopped or Slowed Oil Production - Quite the Opposite’

Melanie Arter | October 19, 2022 | 7:33pm EDT
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Morning commuters drive past a sign displaying gas prices at a petrol station in Alhambra, California on October 19, 2022. (Photo by FREDERIC J. BROWN/AFP via Getty Images)
Morning commuters drive past a sign displaying gas prices at a petrol station in Alhambra, California on October 19, 2022. (Photo by FREDERIC J. BROWN/AFP via Getty Images)

(CNSNews.com) - President Biden announced Wednesday that he is releasing another 15 million barrels of oil from the Strategic Petroleum Reserve through December.

The president said the reserve is “more than half full with about 400 million barrels of oil,” which is “more than enough for any emergency drawdown.”


“Earlier this year, because of Putin’s invasion of Ukraine, the price of oil and gas increased dramatically, and I acted decisively at the time, and thanks in part to those actions, the price of our gas has fallen 30 percent from the summer highs. Now it’s down about $1.15 a gallon from their peak during the summer. Gas prices have fallen every day in the last week,” he said.

“Let me repeat, gas prices have come down, and they continue to come down again. They’re now down more than 27 cents a gallon in Wisconsin last week, 27 cents in Oregon, 16 cents in Ohio, 25 cents in Nevada, 17 cents in Indiana, in just the last 10 days. Now that’s progress, but they’re not falling fast enough. Families are hurting,” Biden said.

The president said that according to independent analysts, drawdowns “have played a big role in bringing down oil prices,” so he plans to continue using it “responsibly.”

With my announcement today, we’re going to continue to stabilize markets and decrease the prices at a time when the actions of other countries have caused such volatility, and I told my team behind me here to be prepared to look further– look for further releases in the months ahead if needed. We’re calling it a ready and release plan. This allows us to move quickly to prevent oil price spikes and respond to international events.

Secondly, we need to responsibly increase American oil production without delaying or deferring our transition to clean energy. Let’s debunk some myths here. My administration has not stopped or slowed oil production - quite the opposite. We’re producing 12 million barrels of oil per day, and by the end of this year, we will be producing 1 million barrels a day more than the day in which I took office.

In fact, we’re on track for record oil production in 2023, and today, the United States is the largest producer of oil and petroleum products in the world. We export more than we import, and I still heard from oil comp- — and I’ve heard from oil companies that they’re worried that investing in additional oil production today will — will — in case of the — in case demand goes down in the future, and they’re not going to be able to sell their oil products at a competitive price later. Well, we have a solution for that.  

Biden said he’s planning to refill the Strategic Petroleum Reserve “in the years ahead at a profit for taxpayers.”

The United States government is going to purchase oil to refill the Strategic Petroleum Reserve when prices fall to $70 a barrel, and that means oil companies can invest to ramp up production now, with confidence they’ll be able to sell their oil to us at that price in the future: $70.
 
Refining and refilling the reserve at $70 a barrel is a good price for companies, and it’s a good price for the taxpayers, and it’s critical to our national security. To put it in context, since March, the average price of oil has been more than $90 a barrel, the highest since 2014.  
By selling from the Strategic Petroleum Reserve at the higher price of $90 earlier this year and then refilling it in the future at a lower price, around $70, it will actually make money for the taxpayers, lower the price of gas, and help bolster production, all while totally consistent with my commitment to accelerate to transition to clean energy. 

The president also put oil companies on notice. He said that they are “sitting on record profits,” so they can “act now to increase oil production now.” Furthermore, Biden called on them to “pass the savings on to consumers.”

Consider this: In the second quarter of this year, profits at six of the largest produce- — publicly traded oil companies were more than $70 billion. That’s $70 billion in just one quarter — 90 days. Seventy billion. So far, American oil companies are using that windfall — the windfall of profits to buy back their own stock, passing that money on to their shareholders, not to consumers.
 
In fact, in the first half of the year, those same companies spent over $20 billion buying back their own stock and, most importantly, buying back — a buyback that — the most significant buyback in the last — almost a decade.
 
That’s great if you own a lot of stock in oil companies or if you’re an executive in an oil company.  It puts a lot of money in your pocket.  That — it’s how you get paid, but it’s not the case for the vast majority of Americans paying at the pump.
 
Here’s another thing: When the cost of oil comes down, we should see the price at the gas station — at the pump come down as well. That’s how it’s supposed to work, but that’s not what’s happening.
 
In the past two weeks, the price of oil has fallen $4 a barrel. And you think — and thanks in large part to steps we’ve taken this year, the price of oil has fallen nearly $40 a barrel since mid-June. That’s a 30 percent drop in the price of a barrel of oil, but guess what? Gas prices haven’t fallen that much, and it’s not right. Gas prices at the pump should be lower.
 
In fact, if retailers and refiners were earning the average profit they’ve made over the last 17 years, Americans would be paying at least 60 cents less per gallon for every gallon they buy.  Say it again: 60 cents less for every gallon they buy. That makes a big difference in a family.
 
My message to the American energy companies is this: You should not be using your profits to buy back stock or for dividends. Not now. Not while a war is raging.

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