Biden removed a page from Trump’s vaccine book to solve gas prices

  • The Biden administration released crude oil from government stockpiles to combat soaring gas prices.
  • Now, in addition to new releases, the administration wants to enter into contracts to replenish the stock.
  • It sounds like Trump’s Operation Warp Speed ​​guarantees to buy Covid vaccines from biotech and pharmaceutical companies.

Government is releasing even more oil from its stockpile in a bid to drive down gas prices, Biden administration announced tuesday.

Since March, the federal government has been releasing barrels of crude oil from the Strategic Petroleum Reserve (SPR) to bring more oil to market and try to bring down exorbitant prices at the pump.

The White House said it has already sold 125 million barrels of the reserve, and more will now be released. The Treasury Department estimates that the releases lowered prices by about 17 to 42 cents per gallon.

The Biden administration also plans to replenish the SPR — and wants to do so by encouraging more production through fixed-price contracts.

“Fixed-price contracts can give producers the confidence to make investments today, knowing that the price they receive when they sell to the SPR will be locked in place, giving them some protection against moves at market decline,” the White House said. said in a fact sheet on the proposal.

As of March 2020, oil production and refining capacity in the United States is well below pre-pandemic levels – you may recall that crude oil had a negative value in April 2020. The number of refineries in operation has fallen by six since 2020, according to data from the US Energy Information Administrationand there were five idle refineries in 2022, down from four in 2020. The number of barrels operating refineries can pump is still nearly 800,000 below 2020 levels.

And the end of the hydraulic fracturing boom in the United States amid the pandemic has also exacerbated production issues as drillers remain cautious about restarting expensive wells in the face of potential future price drops. Locking in current prices takes some of the risk out of the production restart equation.

It looks like an earlier federal guarantee during Operation Warp Speed ​​under President Donald Trump. The public-private partnership program invested money in vaccine development and established some security for companies like Pfizer and Moderna to undertake research that had no guarantee of success, with the understanding that the federal government would buy the vaccines. Now Biden is similarly trying to convince wary oil drillers to start pumping again with a price guarantee.

Gasoline prices have fallen in recent weeks after peaking at a record $5 a gallon in mid-June. Today, the current average price of a regular gallon is $4.327, according to AAA. The weekly data from US Energy Information Administration had regular gasoline at $4,330 for the week ending July 25.

This is a welcome relief for US consumers, but prices are likely to remain high for some time as the The conflict in Ukraine drags onand the global economy faces tight oil supplies.

“The real answer is to get to a clean energy economy as soon as possible; turn that into something positive,” Biden said in Remarks on high gasoline prices on July 22. “That means cleaner renewable energy, more affordable electric vehicles, and clean energy made here in the United States. That’s how we’ll protect the climate and create jobs.”

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