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WASHINGTON – President Joe Biden is releasing 50 million barrels of oil from the nation's emergency stockpile to lower energy costs amid a spike in gas prices and soaring inflation, the White House announced Tuesday.
Thirty-two million barrels will be released from the Strategic Petroleum Reserve over the next several months and will be replaced in the years ahead. An additional 18 million barrels that Congress authorized for sale will be released in the coming months.
"American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic," the White House said in a statement. "That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply."
After months of diplomatic negotiations, the United States will release the oil in parallel with other major energy-consuming countries, including China, India, Japan, South Korea and the United Kingdom.
Biden has been under mounting political pressure to provide Americans relief from higher gas prices and to tame inflation, which hit a 31-year high last month. Republicans blamed Biden's policies for the increased cost of consumer goods, including energy prices; Democrats pointed to positive economic indicators, such as declining unemployment.
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Gas prices have risen this fall
Gas prices rose steadily over the past few months before leveling off last week.
Average gas prices fell for the second straight week, dropping 1.9 cents from a week ago, according to the fuel price website GasBuddy. The average price stands at $3.39 per gallon, according to data that GasBuddy compiled from more than 11 million individual price reports covering more than 150,000 gas stations.
The national average is up 2.8 cents from a month ago and $1.30 per gallon higher than a year ago. The national average price of diesel has risen 0.1 cent in the past week and stands at $3.63 per gallon.
Biden called on oil-producing nations such as Saudi Arabia and the United Arab Emirates to ramp up production to provide some relief to American consumers, but those countries rebuffed requests to pump more crude, leaving Biden with few options to lower gas prices.
Biden called last week for federal regulators to investigate whether oil and gas companies are engaging in "illegal conduct" by profiting from gas prices that have skyrocketed during the pandemic. He requested the probe in a letter to Federal Trade Commission Chair Lina Khan, claiming "mounting evidence of anti-consumer behavior by oil and gas companies."
The federal government reported this month that inflation has surged over the past 12 months as the U.S. economy recovers from the coronavirus pandemic. The consumer price index increased by 0.9% in October, the U.S. Bureau of Labor Statistics said, leaving prices 6.2% higher than a year earlier. It's the largest 12-month increase since 1990.
What is the Strategic Petroleum Reserve?
The Strategic Petroleum Reserve is a stockpile to preserve access to oil in case of natural disasters, national security issues and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. There are roughly 605 million barrels of petroleum in the reserve.
The reserve was established by Congress in 1975 after the oil crisis in 1973, when oil-exporting nations throttled their production and caused energy prices to soar.
The United States has tapped the reserve to raise revenue as shifts in global oil production made lawmakers less concerned about potential shortages.
The last major release of the oil reserve came in 2011, when President Barack Obama released 30 million barrels of oil to counter disruptions in supply due to civil unrest in Libya. President George W. Bush released 11 million barrels of oil from the reserve in 2005 to counter disruptions from Hurricane Katrina, and his father, President George H.W. Bush, released 17 million barrels during the Persian Gulf War.
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.
Contributing: Matthew Brown, USA TODAY; The Associated Press
This article originally appeared on USA TODAY: Gas prices relief? Biden releases 50M strategic oil reserve barrels