“The president cannot control prices,” the former Michigan governor said in an interview at GE’s wind turbine factory in New Orleans.
On Tuesday, accompanied by state and local officials, Granholm received a briefing from SPR staff on how the system is responding to the current supply crunch.
Surrounded by barbed wire and protected by an electronic alarm system and safety dogs, the facility features a labyrinth of pipes and sophisticated high-pressure pumps for injecting or, most recently, extracting oil stored deep underground.
The oil is kept in caves 2,000 feet below the surface in the salt domes. The caves are large—deep enough to stack the Washington Monument four times—each holding about 10 million barrels of crude oil.
“Everything is still on the table”
However, some industry experts have warned that banning the shipment of U.S. crude abroad will only push up world oil prices, which are the foundation of oil prices.
Granholm added that Biden’s advisers are “testing” a range of moves to ensure there are no unintended consequences.
‘Exciting’
Gas prices initially retreated after Biden announced a record 180 million barrels of oil from the SPR in late March following disruptions caused by Russia’s invasion of Ukraine. However, the relief proved temporary, with the national average price per gallon today 37 cents higher than the day Biden announced the unprecedented move.
Granholm defended the SPR strategy, saying it was about letting supply meet demand, and other global events were also affecting prices, including the war in Ukraine and the Covid lockdown in China.
The Biden administration is now releasing so much emergency oil that, in addition to congressional-authorized sales to boost revenue, some in the energy industry doubt that SPR can even pump so much crude at once.
“It’s exciting that we’ve been able to do this,” Paul Oosterling, program manager at SPR’s program management office, told reporters.
Technically, the SPR can supply more oil: the system has a maximum oil production capacity of 4.2 million barrels per day.
Climate ambition meets economic reality
Biden ran on the most aggressive climate agenda of anyone ever elected president. Yet he is now pumping oil out of the SPR at a record pace, urging U.S. oil and gas companies to increase oil production and trying to persuade OPEC to increase supply.
When asked if it was an awkward juxtaposition, Granholm replied, “He’s dealing with the current situation.”
“You can walk and chew gum. Both,” Granholm said. “The fact that we pay these outrageous prices is almost an exclamation point for the fact that we need to move to clean energy, so we won’t be in this situation in the future.”
Soaring gas prices are putting pressure on households to make tough decisions about their finances.
“The people who get hurt the most are the people who get hurt the least,” Democratic congressman Troy Carter told CNN on Tuesday after a tour of SPR.
Carter, whose constituency includes New Orleans, said it would be easy to be the administration quarterback Monday morning, but he’s satisfied with what they’ve done so far to deal with high oil prices.
“As things stand, I think the White House is doing what it can,” he said. “We continue to push to get them to do more.”
Granholm: Oil majors put profits over citizens
After taking office, Biden took the time to focus on the climate crisis. On his first day in office, he signed an executive order revoking the license for the Keystone XL pipeline, suspending oil and gas leases in the Arctic and putting the United States on track to rejoin the Paris climate agreement.
Now, Biden officials are openly imploring big oil companies to increase production, not reduce it. “We want them to increase the rig count. We want them to increase production so people don’t get hurt,” Granholm said.
“They’re putting shareholder profits over helping citizens,” Granholm said, adding that some companies are starting to ramp up production, with U.S. production expected to hit an all-time high next year. “It’s very frustrating to see that there is no full resumption of production in a time of crisis.”
