Schumer Encourages Biden to Tap Petroleum Reserves to Control Surging Fuel Prices

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
November 15, 2021 Updated: November 15, 2021

Senate Majority Leader Chuck Schumer (D-N.Y.) urged the Biden administration on Sunday to make use of the Strategic Petroleum Reserve in order to curb increasing gasoline prices as Americans enter the holiday season.

“COVID’s wreaked havoc on our supply chains. No industry is spared but fuel, gasoline is the worst of all. When fuel is in a crunch, everything dominoes. But we can put our finger on the scale with something called the SPR,” Schumer said at a news conference in New York, referring to the Strategic Petroleum Reserve.

“We’re here today because we need immediate relief at the gas pump and the place to look is the Strategic Petroleum Reserve. It’s temporary but it has reduced prices significantly in the past, and it also says to the monopoly that controls oil, ‘Don’t mess around because we’re going to counter what you do.’”

Last week, a group of 11 Senate Democrats, including Vermont’s Patrick Leahy and Connecticut’s Richard Blumenthal, signed a memo asking Biden to explore options like tapping the SPR and halting exports of crude oil to get a handle on the fuel prices. They said that the high costs place an undue burden on families still recovering the effects of the pandemic.

“We agree with your recent comments at the United National Climate Change Conference (COP26) that as the United States works to boost the development of clean and renewable energy over the long-term, we must ensure that Americans are able to afford to fill up their cars at the pump in the meantime,” the letter reads.

Energy Secretary Jennifer Granholm told CNN that Biden is “certainly looking at that” but has not made a final decision yet. Meanwhile, as oil hit $80 a barrel, Organization of the Petroleum Exporting Countries (OPEC) allies turned down a U.S. appeal to release more crude into the market and stabilize the price.

The national average for a gallon of gasoline was $3.41, and Granhol said to CNN that she hoped it would not reach $4, noting that OPEC was “controlling the agenda.” Last year, vehicle owners were paying $2.12 a gallon on average.

“We are very committed to do everything that we can to make sure that American consumers don’t bear the brunt of high gas prices and value tile energy prices,” National Economic Council director Brian Deese told CNN’s “State of the Union” program on Sunday.

The U.S. SPR is a stockpile of crude stored in four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts.

Anytime a global disruption of crude oil takes place, the SPR provides a backup supply for the entire country. The storage capacity comes to around 714 million barrels, with almost 606 million barrels stored currently, as of Nov. 12. The SPR is the largest of its kind in the world, and accounts for about half of total global strategic reserves.

However, analysts have warned that an SPR release would only produce a short-term effect in the market, unless overall U.S. production capacity improves, which means the price will go back up.