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Biden will release more oil to fight high prices

STEVE INSKEEP, HOST:

The White House says President Biden will release oil from the Strategic Petroleum Reserve. Presidents occasionally do this at times of high oil prices. Biden himself has done it, and it's often of symbolic effect. But the Biden administration is releasing a lot more oil this time. And NPR White House correspondent Tamara Keith is here. Hi, Tam.

TAMARA KEITH, BYLINE: Hi.

INSKEEP: How much oil?

KEITH: A lot of oil. This is the largest release of oil reserves in history, putting 1 million additional barrels on the market per day on average every day for the next six months. The U.S. will then use revenue from this release to restock the country's reserves, which are held in underground salt caverns in Louisiana and Texas. The White House says this is also being done in coordination with other countries around the world who will be releasing from their reserves as well. It's also proposing a use it or lose it policy that would force oil companies to pay fees for land that they have leased but where they haven't drilled or produced oil.

An administration official says that, you know, they've been talking to oil companies. Some have said that they will ramp up production in response to the market instability that's been caused by Russia's war on Ukraine. But that is going to take time. So that's why the administration is making this move now. But also they said there are other companies that are focused on dividends and using high prices to return profits to investors rather than investing in increased production. And you can expect to hear the president shake his fist at them today.

INSKEEP: Oh, sure. And there's a lot of politics going on here. The administration is being blamed for blocking oil in some fashion. The administration has responded that the companies need to drill with the leases that they already have. So that's what they're addressing today. Can these moves really make a difference?

KEITH: Well, even just the anticipation of this move brought down oil prices this morning on the global markets. Now, that may well just be a temporary market movement, but it does indicate that this is a significant move that the president is making. The world uses about 100 million barrels of oil today. So while a million a day is a lot, it is also not that much. The U.S. produces about 11 million barrels a day. Here's the bigger context - AAA says the average price for gasoline for a gallon of regular is now $4.23. That is slightly down from the high, but it's about the same it was last week. It's 60 cents more per gallon than it was just a month ago. And concerns about inflation are real. The president doesn't have a lot of levers to affect the oil prices, but this is the lever he has, and he is using it now. And as you say, he did use it in November on a much smaller scale. And then, it didn't really make a dent.

INSKEEP: Anything the administration can do about inflation has got to feel like something politically essential.

KEITH: Yeah, Biden's approval rating is in the neighborhood of 40%. And this is an election year, which has Democrats very worried. Using his bully pulpit to complain about energy companies or to say that these are, quote, "Putin's price hikes" only goes so far. And this is a pretty dramatic action that the president is making to signal to the country that he feels their pain and he is doing what he can do.

INSKEEP: NPR's Tamara Keith, always a pleasure talking with you. Thanks.

KEITH: Good talking to you, too. Transcript provided by NPR, Copyright NPR.