378796 09: A pipeline carries oil September 20, 2000 at the Federal Strategic Petroleum Reserve facility known as Big Hill near Beaumont, Texas. It is one of four crude oil storage sites run by the U.S. government that could be tapped to ease the oil crisis. The Big Hill facility has 14 underground solution-mined storage caverns that have a combined storage capacity of 160 million barrels. The site has demonstrated the capability to deliver crude at 930,000 barrels per day. The Big Hill site is connected via a 25-mile, 36-inch pipeline to the Sun Marine Terminal and the Unocal Marine Terminal at Nederland, Texas. The pipeline also interconnects with the Texaco 20-inch pipeline system in Port Arthur, Texas. The reserve, created in 1975 after the Arab oil embargo, is intended to provide a stopgap in case of disruptions in oil imports. It has been used only once, during the Gulf War in 1991. (Photo by Joe Raedle/Newsmakers)
Biden released reserve oil but gas prices may still hit record highs this summer
01:19 - Source: CNNBusiness

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CNN  — 

The West needs more oil now. The world needs to get off oil and gas ASAP.

These competing, urgent realities are crashing into each other:

  • Climate. The world is approaching a more catastrophic phase of climate change and needs to move quickly to reduce carbon emissions.
  • Sanctions. Punishing Russia will raise prices in the West, particularly gas prices.
  • Economy. High gas prices could help drive the US into a recession and turn the outcome of the midterm elections in November.

The result is an epic quandary of the oil addiction that runs the world economy. President Joe Biden announced a new plan Thursday that he said would address all of the above by increasing the availability of oil in the short term, improving fuel economy in vehicles and securing access to components used in batteries for electric vehicles – while working to get off oil in the future.

More now, less later. “Look, the bottom line is this,” Biden said at the White House. “Between ramping up production in the short term and driving down demand in the long term, we can free ourselves from our dependence on imported oil from across the world.”

Biden’s plan to bring down gas prices

The President is authorizing an unprecedented 1 million barrels of oil per day – 180 million barrels total – to be released from the nation’s Strategic Petroleum Reserve.

He also wants oil companies to increase production and for Congress to penalize firms that don’t produce from federal lands.

Will these moves work to lower prices?

Even Biden admits he doesn’t really know, and the way the worldwide oil markets work, it will largely depend on how much other oil producers add – or don’t add – to their production.

At most, he said we’re looking at a cost decrease of 10 cents to 35 cents per gallon when the effect of additional oil on the market kicks in. The national average for regular gasoline was $4.24 Wednesday, which was down from a record set earlier in March.

Stuck between ambition and reality

CNN’s senior climate editor Angela Fritz told me Biden is “stuck between progressive ambition to take meaningful climate action and the reality that the US is still extremely dependent on fossil fuels and people want cheap gas.”

That does not mean there is not progress in terms of renewable and clean energy. Fritz pointed out that wind and solar generated a record amount of the world’s power in 2021.

CNN has previously reported that people in the US are clearly dissatisfied with energy policy, likely because of high gas prices.

As a salve to the long-term problem of climate change, Biden said Thursday he would invoke the Defense Production Act to spur domestic production of critical minerals needed to manufacture batteries for electric vehicles and long-term energy storage.

This is an important step since Biden has warned China has moved to control much of the global market of these minerals.

In the meantime, the climate crisis is taking its toll.

‘Delay means death’

Just days into Russia’s invasion of Ukraine last month, the United Nations warned in an alarming new report that the world is running out of ways to adapt to the climate crisis.

“The facts are undeniable. This abdication of leadership is criminal,” UN Secretary-General Antonio Guterres said in a statement. “The world’s biggest polluters are guilty of arson of our only home.”

He also said that “current events” showed the world was too reliant of fossil fuels, calling them “a dead end,” in an apparent reference to the Ukraine conflict and energy crisis.

Proof of the climate crisis

Fritz pointed out that reservoirs on the Colorado River are drying up, threatening the water supply for more than 40 million people. We are already seeing the beginnings of how this will play out in cities and towns across the West: Jurisdictions that have water are going to start cutting people off. Corporations are buying up land with water rights so they can profit in the years to come.

Forecasters predicted that the West’s extreme drought would push east this spring, and we’re seeing that play out now. It’s leading to extreme fire risk in the central US: More than 700 fires scorched around 164,000 acres in Texas in March. “Even a few degrees of warming can make a big difference,” one expert told CNN’s climate team.

Un-freezing Antarctica

Fritz also pointed to reports this week of a shift in Antarctica, which has so far been less affected by the climate crisis than its Arctic counterpart.

Sea ice around the South Pole’s continent has been relatively stable, but fell to a record low this year. And then this month, temperatures on the Antarctic Plateau shot to 70 degrees warmer than normal. As that happened, a previously stable ice shelf disintegrated.

Why do we care about Antarctica? There’s so much ice on the continent – if even a fraction of it melts, the world could be in for several feet of sea level rise.

The daily reality for people

Antarctica is so far away, however, and many Americans might be more focused on the cost of getting to work.

Why is California gas so expensive? Oil markets are complicated, and it turns out the $6 per gallon gas in California has a lot to do with an unscheduled outage at one major production facility in Torrance. Read this story from CNN’s Chris Isidore.

Biden sought to place much of the blame for the rise in gas prices at the feet of Russian President Vladimir Putin for invading Ukraine and said it is worth the price to stand up to the autocrat.