November 25, 2021: -On Wednesday, the Biden administration’s decision to release oil from U.S. reserves is a “mistake,” former U.S. Energy Secretary Dan Brouillette said.
“I do think it’s a bad policy choice. There’s no question about that,” he told CNBC one day after President Joe Biden announced that 50 million barrels of oil would be releasing from the country’s Strategic Petroleum Reserve.
China, India, Japan, South Korea, and the U.K. will be releasing their oil reserves as part of global efforts by high energy-consuming countries to cool energy prices.
The SPR in the U.S. is a national security asset meant to protect the country and its citizens from supply disruptions, like during emergencies, said Brouillette, serving as energy secretary under former President Donald Trump.
“It’s not a supply emergency, and the emergency I can see in this case is a political emergency,” he said.
The Biden administration’s action showing they are concerned about the midterm elections in 2022, Brouillette said.
“This is driving the decision because, as I said earlier, it’s not a supply emergency,” he said.
According to the Energy Information Administration, oil producers in the U.S. pump around 11 million barrels per day.
Three presidents have used the SPR as an emergency response tool in the past, according to the Office of
Fossil Energy and Carbon Management. The drawdowns were ordered to help stabilize the market during Libya’s civil war, Hurricane Katrina, and the Persian Gulf War.
Oil prices have risen over 60% this year as economies reopened, and there was a sharp rebound in demand.
The U.S. asked OPEC and its allies to increase production to tamp down prices, but the oil alliance stuck to the planning of adding supply gradually.
Brouillette said using the SPR to “strike back” at OPEC is “absolutely the wrong approach,” and there are other levers the U.S. can use.
Instead of tapping the reserves, the U.S. should allow projects. One of them is the Keystone XL pipeline, a major U.S.-Canada oil pipeline expected to carry about 830,000 barrels per day of Alberta oil sands crude to Nebraska. In June, it was officially canceled after Biden revoked a necessary permit needed for a U.S. stretch of the 1,200-mile project.
Washington could allow oil production on federal land, the former energy secretary said.