The United States Department of Energy abruptly canceled two major purchases to refill the country’s Strategic Petroleum Reserve with more than three million barrels of oil on Wednesday, citing rising fuel costs. The SPR, established by Congress for use in emergency situations, has been steadily depleted since President Joe Biden took office in 2021—ironically to offset the same high gas prices that now make the refill impossible.
The initial purchase order was announced by the DOE’s Office of Petroleum Reserves on March 14th with the goal of refilling the Bayou Choctaw SPR storage facility between August and September. However, given the recent uptick in single-barrel costs, the Department expressed concern about the cost of the three-million-barrel operation.
When the plan was announced last month, the ideal purchase point was set at $79 per barrel. Since then, prices have only increased, with the US benchmark hitting $85.71 per barrel on Wednesday.
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“Keeping the taxpayer’s interest at the forefront, we will not award for the Bayou Choctaw SPR site in August and September, and will continue to solicit available capacity as market conditions allow,” a DOE spokesperson said. “As always, we monitor market dynamics to remain nimble and innovative in our successful replenishment approach to protect this critical national security asset.”
However, the Department said it still remains committed to refilling the Strategic Petroleum Reserve in a way that delivers “a good deal for American taxpayers.”
In recent months, several other solicitation orders have been completed at the desired price point, but the SPR still remains at a 40-year low. According to the latest data, the national SPR currently contains 363.6 million barrels of oil, a 43 percent decline from January 2021, when Biden took office. Later that year, he began releasing gasoline from the reserve to offset high gas prices, which had soared higher than $4 a gallon after his election.
Between 2021 and 2022, the Biden DOE released roughly 260 million barrels of oil, ignoring warnings from regulators and Congressional Republicans that the move would jeopardize the country’s emergency preparedness.
“It’s pure insanity to watch the Biden administration cut American oil production and then claim they can’t refill our critical reserve because of the price,” said Daniel Turner, founder and executive director of watchdog group Power the Future. “Joe Biden drained the SPR for political reasons, cut our domestic production for his climate agenda, and now he’s leaving our critical reserve more vulnerable because he’s incompetent,” he continued. “As a result, Americans are paying more at the pump, more at the grocery store and our SPR is less full during a time of rising turmoil in the Middle East.”
Despite the cancelation of the refill order, the administration has not ruled out further SPR releases to offset costs at the pump.
“Domestic crude prices are likely to remain too high for the remainder of the year for DOE to resume its refilling program,” said Bob McNally, president of consultant Rapidan Energy Group and a former adviser to President George W. Bush. “If pump prices keep rising, the Biden administration will shift gears and reconsider SPR releases, though we currently do not think they are imminent.”
Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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