Energy experts say Biden plan to refill oil reserve could take years, won't fix policy problems

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Biden ‘speaks nonsense’ when talking about climate agenda, energy policy: Brian Brenberg

Fox News contributor Brian Brenberg reacts to President Biden’s announcement of an additional release from the U.S. Strategic Petroleum Reserve.

Energy industry representatives and experts say President Biden's plan to refill the Strategic Petroleum Reserve (SPR) could take years to complete and doesn't provide the kind of security that more energy-friendly policies would.

The White House Tuesday night rolled out details of its plan to refill the depleted reserve, along with an announcement that it's releasing 15 million more barrels to help moderate gas prices. Biden also discussed it Wednesday, announcing that the U.S. will start refilling the reserve when prices drop to between $67 and $72. He called that "a good price for companies, and… a good price for taxpayers."

But Mark Mills, an energy expert at the conservative Manhattan Institute, told Fox News Digital that Biden's plan may leave the U.S. with a half-full reserve for some time. That likely won't be a problem, he said – unless something happens to make it a problem.

"There's a very good case to be made by a lot of very serious forecasters based on supply and demand for the world, that the range for oil prices in the coming three to five years is going to be sort of in the 80 to 100 [dollars per barrel range] on an ongoing basis," Mills said.

WHITE HOUSE WON'T RULE OUT RELEASING MORE OIL FROM STRATEGIC PETROLEUM RESERVE

President Biden announced the release of an additional 15 million barrels of oil from the Strategic Petroleum Reserve. (AP Photo/Evan Vucci / AP Newsroom)

"If there's no black swan event, we will be just fine," he said. "But the reason we built the reserve is for black swan events."

Biden and the White House reject that idea and say their plan may help oil prices come down. The expectation that the government will buy so much oil, a senior administration official said Tuesday, will "provide industry with certainty about future demand" and "encourage near-term production."

"That means oil companies can invest to ramp up production now with confidence they will be able to sell their oil to us in the future," Biden said.

The White House also plans to use fixed-price contracts to buy oil for the SPR, reserving oil for delivery at future date for a certain price, regardless of any fluctuations in the interim.

That type of guarantee on prices, however, is something energy companies already have with certain types of contracts on the private market, American Exploration and Production Council CEO Anne Bradbury said.

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Senior administration officials said their plan to buy back oil for the SPR will give domestic producers confidence to produce more. (Tyler Olson/Fox News / Fox News)

"Companies already have a lot of opportunities to hedge future production," she said. "They're guaranteed a certain rate or a certain amount at a certain time period, that is likely below today's prices in case the bottom falls out. But they might not get the premium if it's high."

"I would say the industry doesn't necessarily need or want a new government program," Bradbury added.

Tim Stewart, president of the U.S. Oil and Gas Association, meanwhile, said the president is missing the mark entirely by not enacting policies that make it easier to produce energy without artificial incentives.

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"We remind the White House that they have taken dozens and dozens of actions that will make it much harder to produce those U.S. barrels that they intend to eventually buy back," Stewart said. "Fixing those prior mistakes will have far greater impact than anything announced today."

"The WH plan to refill the Strategic Petroleum Reserve fails to provide the resources needed to strengthen our security and could take years to replenish what they have squandered," Leslie Beyer, the CEO of the Energy Workforce and Technology Council added. "To strengthen our energy and national security, the Biden administration must support long-term increased investment and infrastructure in domestic oil and gas production and processing."

The SPR is down more than a third since Biden entered office, from 638 million barrels to 405 million. That's the lowest level since the 1980s.

High gas prices at a station in Mill Valley, California, on Oct. 3, 2022. (Justin Sullivan/Getty Images / Getty Images)

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Biden's continued drawdown from the SPR comes shortly after an OPEC+ decision to cut daily production by 2 million barrels per day. The White House was highly critical of the move, which it said will hurt U.S. consumers and help Russia, a major oil producer, in its war against Ukraine.

The president's Wednesday announcement that he's releasing 15 million barrels comes after he said he'd release 180 million from the SPR earlier this year. Biden also said he's directing his administration to be ready to release even more oil this winter if needed.

Fox News' Aishah Hasnie contributed to this report.

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