The 1 million barrels per day for six months will amount to about 180 billion barrels. The stock will be replenished when the cost of oil is lower, Biden said. White House officials said that the concern isn’t entirely the “immediate short-term price movements” in the oil market, but responding to the lack of supply with Russian oil coming off the market.
The White House called that “part one” of Biden’s response to the supply crisis and increasing energy prices. “Part two,” senior administration officials said in a background briefing call, is “charting a path towards real American energy independence by accelerating the clean energy transition so that we are no longer reliant on foreign oil.” That includes a “use it or lose it” policy, calling on Congress to impose fees on the energy companies that are sitting on “more than 9,000 unused but approved permits for production on federal lands and more than 12 million unused acres.”
Another senior administration official told reporters that Biden was also calling on Congress “to pass his landmark plan to speed the transition to a cleaner energy future made here in the United States of America” to end the nation’s dependence on foreign oil.
“Implementing the President’s climate plans would save Americans more than $900 a year in gasoline from the adoption of electric and hydrogen vehicles,” the official said. “It would save Americans $500 a year by increasing the use of clean electricity to power homes, not only on the grid but in the household as well—technologies like heat pumps and solar and storage.” To that end, Biden will also invoke the Defense Production Act “to secure American supplies of the critical materials needed to boost our clean energy economy.” That means calling for an increase in domestic production of the minerals needed to manufacture batteries for electric vehicles and long-term energy storage.
The administration is also using $3.2 billion from the infrastructure law passed last year to states, Tribes, and territories for the weatherization of homes. “That’s 10x the amount of historic funding levels that will help electrify and make efficient homes all around the country,” the official said.
OPEC and allied producers including Russia, meanwhile, have decided to continue with a modest increase in production of crude. They will increase baseline production from about 400,000 barrels a day to 432,000 barrels a day in May. That’s the production schedule of gradual increases they decided on before the Russian invasion of Ukraine, restoring production cuts stemming from the COVID-19 pandemic and cratering of demand.