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Energy & Environment Biden releases largest-ever oil reserves

Energy & Environment Biden releases largest-ever oil reserves

Energy & Environment Biden announces largest-ever oil reserve release
AP Photo/Mark Lennihan

Welcome to Thursday’s Overnight Energy & EnvironmentThe latest news on energy, the environment, and beyond is available at. Subscribe here.

Today were looking at the Biden administrations historic oil reserve release, the EPAs decision not to regulate a chemical linked to fetal damage and Democrats taking aim at the oil industry ahead of the midterms. 

Rachel Frazin and Zack Budryk were the Hill’s editors. Write to us with tips: rfrazin@thehill.com and zbudryk@thehill.com.

Lets jump in.

Biden will release oil from strategic reservese

The White House on Thursday announced plans for the largest-ever release of oil from the United States strategic reserves.  

In a factsheet, it stated that it would release approximately 180 million barrels of oil per month for the next six-months. 

On Thursday, President Biden spoke out about the plan and called for more oil production. He also criticised industry profits.  

Biden stated, “Enough with lavishing excessive profits upon investors and payouts or buybacks when American people are looking, the world is watching.”  

This is not the right time to enjoy record profits. It’s time to do more for your country and the greater good of the planet.  

This move comes as oil prices skyrocket due to Russia’s invasion in Ukraine. Many buyers are refusing to buy Russian barrels, which means that there is less overall supply and more demand from other countries.  

This has caused serious problems for the Biden government, already dealing with high prices and GOP attacks. Prices have remained high because the oil supply has not recovered to meet demand since coronavirus lockdowns. 

The barrels will serve as a bridge to additional U.S. production, and other production we expect later in the year, a senior administration official said to reporters. He also noted that the plan was coordinated by U.S. allies. 

Officials stated that the new, combined efforts would supply the market with well over 1,000,000 barrels per day.  

Officials did not provide any specific estimates of how the strategic reserve release would affect gas prices, or when Americans could expect prices to fall. 

Biden said that prices could be lowered by 10 cents to 35 cents per gallon on Thursday, but it is not known what the impact of his move will be.

‘USE IT OR LOSE IT’

The White House stated that the plan would address rising domestic gasoline prices. 

The administration is pressuring oil companies to increase production on federal lands where drilling permits were approved but not used. 

According to the White House fact sheet, Biden stated that he would ask Congress for legislation that would require companies to pay fees for wells in their leases that they haven’t used in years. This would also apply to acres of public lands that are being hoarded without producing.  

It was described by a senior administration official as a “use it or lose it” policy. 

However, such legislation would face significant hurdles because of the slim Democratic majority in Congress and Senates 60-vote threshold to most votes.   

Invoking the Defense Production Act The White House also said that Biden would authorize the use of the Defense Production Act to support the production and processing of minerals for batteries used in clean energy and electric vehicles, part of an effort to transition the U.S. to clean energy over time and reduce dependence on oil.  

It will increase production of lithium, nickel and cobalt as well as graphite, manganese, for large-capacity battery packs.  

Learn more about the White House’s overall plan and move here. You can also read the details of the Defense Production Act announcement here.

EPA will not regulate chemical that causes fetal harm

The Environmental Protection Agency (EPA) announced on Thursday that it wont regulate a chemical that may be tied to fetal brain damage, upholding a Trump-era decision.  

In a statement, the EPA stated that it would not regulate perchlorate content in drinking water. It said that the decision by Trump’s administration was based upon the best peer-reviewed science. 

Perchlorate can affect the function of the thyroid gland. This can lead to developmental problems in children.  

However, the Trump Administration determined that the substance doesn’t meet the criteria for regulation under the Safe Drinking Water Act as a drinking water contamination.  

Biden announced when he was first elected that he would be reviewing the Trump-era decision not regulation perchlorate. His administration’s decision not to change its predecessor policy signifies that it reversed an Obama-era determination of perchlorate meeting regulatory criteria.  

Public health and environmental groups have called for the regulation of perchlorate.  

The American Academy of Pediatrics recommended that the EPA set the strongest limits possible for the substance in 2019 due to its potential effects.  

Perchlorate poses a danger to the child’s development when it is given to fetuses during pregnancy. Children born with even mild, subclinical deficiencies in thyroid function may have lower IQs, higher chances of being diagnosed with attention-deficit/hyperactivity disorder (ADHD), and visuospatial difficulties, the organization wrote at the time. 

Learn more about the move of the Biden administrations here.

PELOSI SAYS NO TO THE GAS TAX HOLIDAY

Speaker Nancy Pelosi (D-Calif.) on Thursday poured cold water on the idea of suspending the federal gas taxes as a way to reduce the costs of higher gas prices for consumers. 

Pelosi acknowledged the appeal of the proposal, which was floated by some Democrats in recent week, in theory. Pelosi argued that the proposal doesn’t do much for consumers long-term, as oil companies are not required by law to pass on savings. 

Suspending the gas tax would also mean that the Highway Trust Fund, which finances roads, and mass transit, would be without a primary source of funding. 

The pro is very showbiz. Let’s just do it. Pelosi stated that it is not always going to the pocket of the consumer at a press conference held in the Capitol. 

She suggested that rebates and direct payments to consumers could be more effective in providing relief for Americans suffering from the high cost of gasoline. 

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How can we directly help people? If you are going to have it paid for and don’t want it to come from the Trust Fund, there could be a rebate or direct payments. Those are the options being considered, Pelosi stated. 

Democrats are looking to pin the blame on oil companies for high gas prices, potentially signaling an election-year goal of refocusing scrutiny on an issue that has dogged President Bidens approval ratings. 

Two House committee chairs called on oil CEOs to testify about the disparities between falling oil prices, and consumer gas prices. Three companies declined to testify before the House Natural Resources Committee Chairman Ral Grijalva(D. Arizona) and many others will testify before Wednesday’s House Energy and Commerce Committee. 

American families are struggling to pay the rising gas prices caused by Putin’s war on Ukraine. But fossil fuel companies are not doing enough. They are lining their pockets with one hand while sitting on another, said Frank Pallone Jr., Chairman of Energy and Commerce Committee (D-N.J.), and Dianna DeGette, Chairwoman of investigations subcommittee (D-Colo.) in a Tuesday statement.  

Some oil industry analysts refute Democratic allegations by pointing out the rocket and feather phenomenon. In which gas prices rise rapidly in response to oil price increases, but slow to fall when oil prices drop, some oil industry analysts argue that this is a result of the oil price. 

Gas stations are often three to four days behind in fully passing increases along. Prices then drop more slowly because stations try and recoup the margins they lost when prices rose, according to Patrick De Haan of GasBuddy’s petroleum analysis department. 

Regardless of industry trends however, both Congress Democrats and Biden repeatedly accused major oil corporations of price gouging. Since the Ukraine conflict began, they have accused them of continuing their profit margins while allowing American customers to shoulder the cost of higher oil prices. 

Sen. Sheldon Whitehouse (D.R.I.), and Rep. Ro Khanna(D.Calif.) sponsored a bill that would tax major oil firms on windfall profits and offer rebates to Americans.  

Congressional Democrats have previously demanded answers from oil executives, most notably in a House Oversight and Reform Committee hearing held in late 2021 to examine the extent to which they knew about the connection between burning fossil fuels and climate changes. 

What’s new? However, the latest push differs in a key aspect: With 2022’s midterm elections near, voters will likely blame the party in charge for the pump’s problems, even if they don’t blame the oil companies. 

Rep. Katie Porter (D.Calif.), who is a member of both Oversight and Natural Resources panels, said to The Hill that more Oversight hearings in the which CEOs would be asked for testimony specifically on gas prices are currently being discussed. 

We had them in under Rep. Khannas leadership, to talk about climate change misinformation. It was a fitting time to have them back, she stated. 

Rep. Dina Titus, a Democratic-Nev., introduced legislation this month with Rep. Peter DeFazio. This tax would be imposed on oil companies that have adjusted taxable income (ATI), this year greater than 110 percent more than the average prepandemic ATI. 

When asked if voters would be open to the idea that oil companies are the cause of their woes Titus replied to The Hill, “I believe so.” 

Titus stated that large corporations are not very popular nowadays. 

Find out more about the Democrats strategy.

WHAT WE’RE READING

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