US energy secretary slams 'extreme' Republican agenda to put limits of SPR drawdowns

President Joe Biden will veto a Republican-backed bill tying releases of crude oil from the US Strategic Petroleum Reserve to the creation of a plan to increase energy production on federal lands if it makes it to his desk, Energy Secretary Jennifer Granholm told reporters Jan. 23.

Granholm, during a White House press briefing, bashed legislation that is expected to come up for a vote in the House of Representatives this week as part of an "extreme agenda that risks worsening supply shortages in times of crisis and risks raising [gasoline] prices for American families."

The Strategic Production Response Act (H.R. 21), introduced Jan. 9 by House Energy and Commerce Committee Chairman Cathy McMorris Rodgers, Republican-Washington, would limit the drawdown of oil from the SPR by forcing the Department of Energy to develop a plan to increase the percentage of federal lands and waters leased for oil and gas production by the same percentage of oil that it seeks to release from the SPR.

The bill was among 11 legislative initiatives House Republicans laid out as "ready-to-go legislation" that they planned to prioritize and bring to the floor in the first weeks of 2023. Another of those priorities, a bill (H.R. 22) to prevent oil from the SPR from ending up in China, cleared the House in a bipartisan 331-97 vote Jan. 12.

While a sizable number of Democrats saw value in that bill, they have come down harshly against H.R. 21. Key Democratic House committee leaders called it "a Republican gift to Big Oil" and have planned a Jan. 24 press briefing to lay out their opposition.

Nonstarter

White House Press Secretary Karine Jean-Pierre Jan. 23 equated the upcoming vote on the legislation to "House Republicans using their narrow majority to force the American people to pay higher [gasoline] prices just as big oil companies are amassing record profits."

Granholm followed those remarks with warnings that the bill "would interfere with our ability to be responsive to release oil during an international emergency, helping [Russian President Vladimir] Putin's war aims," as well as "potentially delay allowing oil to be released for domestic emergencies following a natural disaster or a pipeline outage at home, leaving prices at risk of rising in the wake of a market shock."

She asserted that the bill "needlessly aims to weaken the [SPR's] usefulness as a tool to ensure energy security," and "imposes unnecessary, unhelpful restrictions on when the SPR can be used to help provide supply."

Granholm contended that there was room for bipartisanship to advance a managed transition to clean energy and to expand access to affordable, reliable domestic energy resources. "But proposals like H.R. 21, which risks raising [gasoline] prices and making it harder to offer Americans relief in the future, are simply nonstarters," she said.

SPR refill setback

Republicans have accused the Biden administration of draining the country's strategic oil reserves for political purposes following an unprecedented 180-million-barrel release over several months to combat energy price hikes spurred by Russia's invasion of Ukraine.

Though President Joe Biden in November satisfied his historic commitment to release those 180 million barrels, he has signaled further releases from the SPR are possible as his administration considers options for stabilizing global oil markets and addressing pain at the pump domestically.

Crude volumes at the SPR stood at 371.6 million barrels the week ended Jan. 13, according to the Energy Information Administration, the lowest level since December 1983.

Efforts to replenish the SPR have yet to pan out. The DOE earlier in the month declined to accept any offers it received as part of a solicitation to repurchase up to 3 million barrels of sour crude, pointing to high prices as a factor in scuttling the first test of its SPR refill plan.

"I have no concerns that we will be able to refill and replenish the SPR and do it at a savings to taxpayers," Granholm said in response to a question on this initial setback.

She said an announcement would be forthcoming on next steps for refilling the SPR but declined to share any other details.

Gasoline prices on the rise

The White House has touted the SPR releases as vital to shoring up global oil supplies and lowering prices at the pump.

Average gasoline prices in the US are down about $1.60/gal from last summer's peak and below prices seen at the start of Russia's invasion of Ukraine. But prices are up 33 cents/gal over the past month.

Asked about the rise in prices, Granholm attributed to "international and climate events," specifically a late December cross-country winter storm that pulled 2 million barrels off the US market as refineries shut down and expectations of a possible increase in global oil demand if China loosens its COVID-19 restrictions.

"We know that there are still refineries that have been pulled down both for maintenance as well as because of the winter storm Elliot, but in the end, we think it'll be balancing out soon," she said of gasoline prices.