The Biden administration announced Tuesday it would release 1 million barrels of gasoline from a Northeast reserve established after Superstorm Sandy in an effort to lower prices at the pump this summer.
The sale, from storage sites in New Jersey and Maine, will be distributed in increments of 100,000 barrels at a time. This approach will create a competitive bidding process that will ensure gasoline can get to local retailers before the July 4 holiday and sold at competitive prices, the Department of Energy said.
The move, which the department said is intended to help “reduce costs for American families and consumers,” follows a congressional mandate to sell the 10-year-old Northeast Reserve and then to close it. The language was included in a spending deal approved by Congress in March to avoid a partial government shutdown.
The Energy Department said the sale of 1 million barrels, or about 42 million gallons, was timed to provide relief to motorists as the summer season begins.
Gasoline prices average about $3.60 per gallon nationwide, up 6 cents from last year, according to AAA. Tapping gasoline reserves is one of the few steps a president can take himself to try to control inflation, an election-year responsibility for the ruling party in the White House.
“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,” said Energy Secretary Jennifer Granholm, in a press release. “By strategically releasing this reserve between Memorial Day and July 4, we are ensuring sufficient supply flows to the Tri-State and Northeast when American workers need it most.”
White House Press Secretary Karine Jean-Pierre said the release of gas from the Northeast Reserve builds on President Joe Biden’s actions “to reduce gas and energy costs.” energy – including historic releases of the Strategic Oil Reserve and the largest-ever investment in clean energy.”
Biden significantly drained the strategic oil reserve in 2022, following Russia’s invasion of Ukraine, bringing stocks to their lowest level since the 1980s. This election year decision helped stabilize gasoline prices which had increased in the wake of the war in Europe, but sparked complaints from Republicans that the Democratic president was playing politics with a reserve intended for national emergencies.
The Biden administration has since started to fill the oil reserve, which contained more than 367 million barrels of crude oil last week. The total is below pre-war levels between Russia and Ukraine, but it still constitutes the world’s largest emergency supply of crude oil.
The Northeast sale will require the 42 million gallon reserve to be transferred or delivered no later than June 30, the Department of Energy said.
Congressional Republicans have long criticized the Northeast Reserve, which was created by former President Barack Obama, saying such a stockpile should have been created by Congress. A 2022 report from the Government Accountability Office said the gasoline reserve, which has never been tapped, would provide minimal relief in the event of a severe shortage. Maintaining the reserve costs approximately $19 million per year.
Patrick De Haan, an analyst for GasBuddy, said the sale of the Northeast Reserve would have little impact on gasoline prices nationally, although there “may be some slight pressure to the drop in prices” in the North-East. The 1 million barrel reserve represents only about 2.7 hours of total U.S. gasoline consumption, he said.
“As an analyst, that reservation never really made much sense,” De Haan said in an interview with The Associated Press. The reserve is very small and must be replenished frequently, “because gasoline has a shelf life,” De Haan said. “This is why no country has an emergency stock of gasoline” other than the United States.
The Strategic Petroleum Reserve has much larger quantities of oil needed in an emergency, he said.
