The Biden administration said Tuesday it is releasing 1 million barrels of gasoline from a Northeast reserve created after Hurricane Sandy in an attempt to lower prices at the pump this summer.
Sales from storage facilities in New Jersey and Maine will be made in increments of 100,000 barrels at a time. This approach will create a competitive bidding process that will ensure gasoline can reach local retailers ahead of the July 4 holiday and be sold at competitive prices, the Energy Department said.
The move, which the department said is aimed at helping “lower costs for American families and consumers,” follows a congressional mandate to sell the 10-year Northeast reserve and then close it. Language was included in spending deal passed by Congress in March to prevent a partial government shutdown.
The Energy Department said the sale of 1 million barrels (about 42 million gallons) was timed to ease the needs of motorists ahead of the start of the summer driving season.
Gasoline prices are averaging about $3.60 a gallon nationwide, up 6 cents from a year ago, according to AAA. Drawing on gasoline supplies is one of the few actions the president can take alone to try to control inflation, which is the responsibility of the party in control of the White House in an election year.
“The Biden-Harris Administration is focused on lowering prices at the pump for American families, especially as drivers hit the road for the summer driving season,” Energy Secretary Jennifer Granholm said in a statement. “By strategically releasing this reserve between Memorial Day and the 4th of July, we are ensuring ample supply flows into the tri-state area and the Northeast at a time when hardworking Americans need it most.”
White House press secretary Karine Jean-Pierre said the gas release from the Northeast Reserve builds on President Joe Biden’s actions “to reduce gas and energy costs, including historic emissions from the Strategic Petroleum Reserve and the largest clean energy investment in history.” .
Biden significantly depleted the strategic oil reserve in 2022 following Russia’s invasion of Ukraine, causing stocks to fall to their lowest levels since the 1980s. The election-year move helped stabilize gasoline prices, which had risen after the war in Europe, but prompted complaints from Republicans that the Democratic president was playing politics with reserves earmarked for national emergencies.
Since then, the Biden administration Replenishment of oil reserves began, which had more than 367 million barrels of crude oil as of last week. The total is lower than pre-Russian-Ukrainian war levels, but is still the world’s largest emergency stockpile of crude oil.
The sale in the Northeast would require the 42 million gallon reserve to be transferred or delivered no later than June 30, the Energy Department said.
Republicans in Congress have long criticized the Northeast Reserve created by former President Barack Obama, saying that any such reserve should have been created by Congress. A 2022 Government Accountability Office report found that a reserve of gasoline that was never used would provide minimal relief during a severe shortage. Maintaining the reserve costs approximately $19 million per year.
Patrick De Haan, an analyst at GasBuddy, said the sale of the Northeast reserve would have little impact on national gasoline prices, although the Northeast “could see some downward pressure on prices.” The million-barrel supply represents only about 2.7 hours of total U.S. gasoline consumption, he said.
“As an analyst, this reserve never made much sense,” De Haan told The Associated Press. The reserve is very small and needs to be changed frequently “because gasoline has an expiration date,” De Haan said. “That’s why there’s really no country that has an emergency supply of gasoline” other than the United States.
The Strategic Petroleum Reserve has much more oil available in an emergency, he said.