By Ari Natter (Bloomberg) —
President Joe Biden faces growing pressure from fellow Democrats to address rising gasoline prices by taking steps that include a possible ban on oil exports and the release of crude from the nation’s strategic reserves.
Eleven Democratic senators, including several known for their concerns on climate change, urged Biden in a letter this week to act quickly with the national average price for a gallon of gasoline at its highest level since 2014. The senators invoked the “undue burden” on families and small businesses and pressed for the release of oil from the nation’s strategic reserve or even the more drastic step of banning export of U.S. crude.
“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.
The letter could give Biden political cover to unleash millions of barrels from the Strategic Petroleum Reserve even as the administration participates in international climate talks concluding in Scotland this week.
The most likely course of action is a release of oil from the Strategic Petroleum Reserve, said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.
“The administration, by all counts is looking hardest at an SPR release, which the market has come to expect,” McNally said. “I still believe the market is expecting an SPR release later this week and I think that’s the likeliest option.”
Imposing a ban is seen as less likely as it would disrupt the flow of oil around the world. It was only six years ago that Congress lifted a 40-year-old ban on U.S. oil exports, reshaping global crude markets, shifting geopolitical power and upending entire economies. The U.S. has emerged as the world’s largest oil producer and its oil has reached more than 50 countries, with shipments often surpassing those of any OPEC nation aside from Saudi Arabia.
In August alone, the U.S. exported nearly 3 million barrels of crude a day, Energy Information Administration data show.
The White House has said it is considering “all tools available” to it as increasing oil and gasoline prices threaten the economic rebound and pose a political risk for the president. But his options for taming the surge are limited, and many of them would be either short-lived or conflict with his agenda of fighting climate change.
Crude fell 1.6% to $82.84 a barrel at 11:16 a.m. in New York.
© 2021 Bloomberg L.P.
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