By Lauren Egan and Shannon Pettypiece -
NBC News
The Biden administration is releasing oil from the nation's Strategic Petroleum Reserve in an effort to address rising gasoline prices ahead of the holiday season, the White House reported Tuesday.
As part of the measure, the Department of Energy will make 50 million barrels of oil available to lower prices and address the mismatch between consumer demand and supply amid the pandemic, according to the government.
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The decision was made jointly with other major energy consuming countries - including India, Japan and South Korea - to curb rising energy prices, after oil-rich nations rejected repeated calls to increase production. as the global economy recovers from the COVID-19 pandemic and fuel demand increases.
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"The increase in gasoline prices has occurred because the global supply of oil has not kept pace with global demand as the economy has recovered from the pandemic, because countries and companies have slowed the supply of oil and the declines in oil prices that we have seen have not translated into lower prices at the pump, "explained a senior administration official in a call with journalists. "The president is acting on both fronts and is committed to using all the tools that are necessary."
Gasoline prices in the United States before Thanksgiving averaged $ 3.42 a gallon, the highest since 2014. Some parts of the country are experiencing steeper increases, such as California, where prices are higher than $ 4.50 in some areas.
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More than 48 million people are expected to drive during Thanksgiving, according to predictions from the American Automobile Association (AAA).
The White House has tried to address the issue of gasoline prices, as concerns about inflation have increasingly turned into criticism of the Biden presidency.
Biden and other administration officials have lobbied the alliance of the Organization of the Petroleum Exporting Countries, led by Saudi Arabia and Russia, to pump more oil and in the hope that the price of gasoline will drop.
The Organization of Export Countries (OPEC), whose member countries together account for about 77% of all crude reserves, has refused to increase production, sticking to its plan of modest monthly increases.
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Biden also asked the Federal Trade Commission last week to investigate "anti-consumer" behavior by oil and gas companies and whether it could have caused gasoline prices to spike.
The Strategic Petroleum Reserve was created after the oil crisis of the 1970s as a national energy safety net.
The emergency crude is stored in four underground salt caverns along the Texas and Louisiana coasts.
The four sites currently contain some 620 million barrels of crude, the world's largest emergency supply.
The reserve is capable of supplying all the consumption needs of the United States for approximately one month.
The president can order a total withdrawal from the reserve in the event of a serious power outage and can also order a limited withdrawal - up to 30 million barrels - to meet short-term emergency needs.
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Since its inception, only three presidents have ordered the release of oil from the Strategic Petroleum Reserve.
Former President Barack Obama ordered the release of 30 million barrels in 2011 to compensate for supply disruptions caused by Libya's civil war;
Former President George W. Bush released 11 million barrels in 2005 to help refineries damaged by Hurricane Katrina;
and former President George HW Bush released 17 million barrels in 1991 in response to the Gulf War.