U.S. President Joe Biden must act – and act quickly – to rein in the crude oil markets. Pressure is coming from all sides, including from his Democratic Party.
Last week, 11 Democratic senators, including several known for their concerns on climate change, urged Biden in a letter to act quickly.
“As the United States works to boost the development of clean and renewable energy over the long term, we must ensure that Americans are able to afford to fill up their cars at the pump in the meantime,” said the letter, which was signed by climate hawks such as Elizabeth Warren of Massachusetts and Green New Deal author Ed Markey, Bloomberg reported.
The Democrats’ call for action comes as Republicans steadily hammer the Biden administration over rising energy prices while questioning moves that include a pause on oil and gas drilling and scrapping the Keystone XL oil pipeline project, the report added.
Biden has some tools at hand.
Quoting Energy Secretary Jennifer Granholm, the news agency Al Arabiya reported last Monday that Biden was weighing options to address soaring gasoline prices. “He’s certainly looking at what options he has in the limited range of tools a president might have to address the cost of gasoline at the pump because it is a global market,” Granholm told MSNBC.
Granholm noted that the Organization of Petroleum Exporting Countries (OPEC) controls the vast majority of the world’s oil supply, saying that Biden “wants to see an increase in supply from everyone.”
Biden could authorize a sale of oil from the U.S. Strategic Petroleum Reserve (SPR), which is held in a series of underground deposits off the Texas and Louisiana coasts, analysts say.
A couple of days before the secretary’s pronouncements and after the oil-producing countries that make up OPEC+ rebuffed U.S. pleas to pump more crude, Biden said the United States had tools to respond to high oil prices.
Just hours after U.S. government data showed American inflation soaring to a 31-year high, Biden vowed to fight the surge as “a top priority.” Key to his administration’s response, Biden said in a statement, would be addressing the rising cost of energy – what he described as “the largest share of the increase in prices.” He promised his National Economic Council would explore how to reduce prices.
Media reports suggest the most likely course of action could be a release of oil from the emergency reserves.
“The administration, by all counts, is looking hardest at an SPR release, which the market has come to expect,” Bob McNally, president of consultant Rapidan Energy Group and a former White House official, was quoted as saying.
The president seems to have a few other options in hand and is reportedly looking closely at them. A ban on exports of U.S. oil and refined products is among the remedies the White House has been considering.
“The secretary and the president continue to monitor the markets and prices, including the forecast yesterday from the EIA, and continue to evaluate any options for appropriate action at the appropriate point,” said Jeremiah Baumann, the Energy Department’s deputy chief of staff.
However, a consensus seems to elude the president’s energy team.
Bloomberg reported that a small group of top Biden aides has been meeting for several weeks, trying to come up with the best way to bring down the cost of gasoline. But even after extensive discussions, they’ve yet to reach a consensus, the report added.
Some key officials at the Energy Department are inclined to take a wait-and-see approach. But White House aides are pushing to tap the nation’s emergency oil reserves or take the even more radical step of halting oil exports, people in the know were quoted as saying.
The indecision had dragged out any real action from the administration, as gasoline prices soared to seven-year highs. It also underscores how the pressure to tamp down inflation has pitted the Biden administration’s policies on energy, free trade and climate change against each other, Bloomberg added.
Biden can’t defer action any longer. He must act now.
Toronto-based Rashid Husain Syed is a respected energy and political analyst. The Middle East is his area of focus. As well as writing for major local and global newspapers, Rashid is also a regular speaker at major international conferences. He has been asked to provide his perspective on global energy issues by both the Department of Energy in Washington and the International Energy Agency in Paris. For interview requests, click here.
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