President Joe Biden announced Wednesday a plan to release 15 million barrels of oil from the nation’s strategic oil reserve to try to decrease gas prices just three weeks prior to the midterm elections.
Tune in as I deliver remarks on additional actions to lower costs and strengthen energy security. https://t.co/mpd1G1vCGT
— President Biden (@POTUS) October 19, 2022
Here’s Biden’s full statement:
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, and gas prices have fallen every day in the last week. 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 this past week, 27 cents in Oregon, 16 cents in Ohio, 25 cents in Nevada, 17 cents in — in Indiana in just the last 10 days. And that’s progress.
But they’re not falling fast enough. Families are hurting. You’ve heard me say before, but I get it. I come from a family — if the price of gasoline went up at the gas station, we felt it. Gas prices hit almost every family in this country, and they squeeze their family budgets.
And when the price of gas goes up, other expenses get cut. That’s why I have been doing everything in my power to reduce gas prices since Putin’s invasion of Ukraine caused these price hikes — these prices to spike and rattled international oil markets.
I focused on how we can protect American families from that spike and give folks just a little bit of breathing room, as my dad would say.
Today I’m announcing three critical steps that my administration will take to reduce gas prices at the pump. First, the Department of Energy will release another 15 million barrels from the Strategic Petroleum Reserve, extending our previously announced release through the month of December.
Independent analysis they — excuse me, independent analysts have confirmed that drawdowns from the reserves so far have played a big role in bringing down oil prices — bringing them down. So, we’re going to continue to responsibly use that national asset.
Right now, the Strategic Pol- — the Strategic Petroleum Reserve is more than half full, with about 400 million barrels of oil. That’s more than enough for any emergency drawdown.
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’ve 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 me — let’s debunk some myths here. My administration has not stopped or slowed U.S. 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. Today, I’m announcing a plan to refill the Strato- — the Strategic Petroleum Res- — Oil 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.
So my message to oil companies is: You’re sitting on record profits, and you’re — and we’re giving you more certainty. So you can act now to increase oil production now.
The third thing I’m doing is I’m calling on oil companies 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.
You should use those record-breaking profits to increase production and refining. Invest in America for the American people. Bring down the price you charge at the pump to reflect what you pay for the product.
You still make a significant profit. Your shareholders will still do very well. And the American people will catch the break they deserve and get a fair price at the pump as well.
One more thing I want to mention today. Our country needs to pass permitting reform to accelerate the development of clean energy.
Right now, the process of getting clean energy projects approved is too cumbersome and too time consuming. So, I’m asking the Congress: Pass a permitting bill to speed up the approval of all kinds of energy production from wind, to solar, to clean hydrogen. Because we need to get this moving now, quickly — now.
It would take — you know, this — if we do this, it would take the historic clean energy investments that I signed into law and put them into action.
In fact, one independent analyst has already estimated that the $369 billion we’re making in federal investments that will generate — if we just — just that will generate $1.7 trillion in total public and private investments in the years ahead.
You can increase oil and gas production now while still moving full speed ahead to accelerate our transition to clean energy. That way — that way, we can lower energy costs for American families, enhance our national security at a very difficult moment.
Let me close with this. I know it’s been a rough four or five years for the country. For a lot of families, things are still tough.
The choices made by other countries are affecting the price of gas here at home. That’s why I’ve been acting so aggressively.
Without the steps we have taken over the past several months to ramp up production and lower prices and get relief to consumers, gas prices would be higher than they are today.
And we’ll keep doing everything we can to keep it going to ensure our energy independence and security is available and to lower gas prices here at home and to give folks a little bit of breathing room.
We just have to remember who we are. We’re the United States of America, for God’s sake. There’s not a single thing we can’t do when we put our minds to it. And we can strengthen our energy security now, and we can build a clean energy economy for the future at the same time. This is totally within our capacity. Totally within our capacity.
Gas prices are coming down. We’re going to do everything we can to make sure they continue to come down and companies act responsibly so it’s reflected at the pump.
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