The United States maintains an emergency reserve of petroleum that, in theory, is reserved for use in an emergency defined by something other than a political need to temporarily lower gas prices.
If the U.S. oil industry were unimpeded by arbitrarily restrictive environmental and other regulations, there wouldn’t be much need for such a reserve. The reserve would simply consist of supplies that various oil companies have on hand or could quickly expand. The unimpeded operation of markets would ensure that any part of the country suffering from a shortage of oil or gas would soon be replenished by oil companies and shippers hustling to make money by meeting demand.
The regulatory situation being what it is, though, the strategic petroleum reserve would presumably help Americans muddle along during a legitimate emergency.
That the totalitarian government of China is happy to expand its petroleum reserve at the expense of the petroleum reserve of the United States is an even less plausible candidate for a legitimate emergency than the desire to get votes.
But as Thomas Catenacci of Fox News reports (“Energy Sec Granholm secretly consulted top CCP energy official before SPR releases,” August 4, 2023):
Energy Secretary Jennifer Granholm engaged in multiple conversations with the Chinese government’s top energy official days before the Biden administration announced it would tap the Strategic Petroleum Reserve (SPR) to combat high gas prices in 2021.
Granholm’s previously undisclosed talks with China National Energy Administration Chairman Zhang Jianhua . . . reveal that the Biden administration likely discussed its plans to release oil from the SPR with China before its public announcement.
The Department of Energy says the talks were about combatting climate change. However:
As part of its announcement in November 2021, the White House said it was releasing oil from U.S. reserves in conjunction with “other major energy consuming nations including China.” . . .
Republican leaders have warned that China, instead of releasing oil stocks, has increased its own reserves since Biden and Granholm’s announcement in November 2021. . . .
In addition, the White House and Department of Energy has been heavily criticized for allowing SPR sales to flow to Chinese state-run energy companies. The White House then fired back in July 2022, arguing that its hands were tied since it is legally required to sell SPR oil to the highest bidder.
The Biden administration ignores the jots and tittles of the law whenever it is so inclined. So the notion that it had no choice but to sell its releases from the petroleum reserve to Chinazi China, its hands were tied, isn’t persuasive.
But for the sake of argument, let’s grant this. Let’s assume that the Biden White House would have been promptly indicted and toppled if, upon releasing some of the petroleum from the U.S. petroleum reserve, it had failed to sell it to China where it could be added to the China petroleum reserve. Let’s also assume that, days before the U.S. released petroleum from the U.S. petroleum reserve, Granholm in her meetings with her Chinese counterpart never asked what kind of price the United States could expect to get from the Chinese government as prospective highest bidder if the U.S. were in a few days to sell some of the petroleum in the U.S. petroleum reserve.
Did not anybody in the administration, Granholm, Biden, anybody, consider the possibility that it would be better to simply hold on to all of the petroleum in the U.S. reserve and not sell to anyone? Instead of selling any part of it to the government of China, a totalitarian adversary of the U.S. and the world?
