US Plans to Refill Strategic Reserve If Advantageous to Taxpayers This Year
(Reuters) — The Biden administration plans to refill the U.S. Strategic Petroleum Reserve soon and hopes to refill it at lower oil prices if it's advantageous to taxpayers during the rest of the year, U.S. Energy Secretary Jennifer Granholm said on Wednesday.
President Joe Biden last year directed the largest ever sale from the SPR, trying to relieve oil prices that surged following Russia's invasion of Ukraine. The invasion and subsequent sanctions on Russian energy have shifted oil flows and restructured the global crude market.
The administration intended to repurchase crude oil for the SPR when prices were at or below about $67-$72 a barrel, after last year's 180 million barrel sale dragged down the stockpile to its lowest level since 1983, the White House said in October.
U.S. crude and international benchmark Brent futures are currently above $80 per barrel. The benchmarks traded between $67-$72 a barrel in March before OPEC+ announced surprise additional oil production cuts this month that sent prices about $5 a barrel higher.
"We cannot sell and take in (crude oil) at the same time," Granholm said.
The SPR is currently selling crude oil from two of the four SPR storage sites in the United States, Granholm said, fulfilling the congressional mandate to sell 26 million barrels in fiscal 2023.
Marathon Petroleum Supply and Trading, Equinor Marketing and Trading, Shell Trading Company, Aramco Trading Americas, Macquarie Commodities Trading, and Phillips 66 were awarded the contracts for the oil, the Department of Energy said in March.
Dirtier Energy Use 'Temporary'
Russia's invasion of Ukraine last year prompted an energy crisis as Europe and other regions scrambled to find barrels to replace lost Russian crude in the market.
That accelerated use of dirtier energy during a time when companies and governments are hoping to push cleaner fuels, but that shift toward dirtier fuels is temporary, Granholm said on Wednesday at an energy conference in New York.
The Biden administration wants to reduce reliance on countries such as China for processing critical minerals needed for cleaner technology like electric vehicles, Granholm said. Biden's Inflation Reduction Act was designed to incentivize clean energy production in the United States, she added.
The IRA, a $430 billion law, offers massive subsidies for U.S.-made products and is aimed at addressing the climate crisis and promoting renewable energy.
Permitting reform is also pivotal for accelerating clean energy use, Granholm said.
Biden is looking at using executive power and Congress to push forward permitting reform around energy projects, Granholm said. The White House is discussing with agencies firm deadlines for the amount of time it takes to issue permits, she added.
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