President Biden made a big commitment in hopes the move will bring down the price of fuel.
Many in the oil and gas industry said the move is a misstep and is one he has made before.
The biggest concern is that the finite resources come out of the nation’s reserve without enough being produced to backfill. The current feeling of those in the industry is that to re-open wells is risky if the long-term plan is to shut them back down.
“He’s already done this twice and obviously the purpose of it is to control the price of gasoline and diesel fuel, etc. To lower and it doesn’t work,” Keener Oil and Gas president Dewey Bartlett said.
President Biden announced plans Thursday to release one million barrels of oil a day for six months from the nation’s Strategic Petroleum Reserve. It will come out to a total of 180 million barrels.
“The price of gasoline and diesel fuel and jet fuel has just shot up like a rocket to have the ability to have a substantial drop,” Bartlett said. “He’s going to have to do more than release a million barrels a day of crude oil over a short period of time.”
Biden also implemented a “use it or lose it” policy, which will place financial repercussions on companies that are not producing energy on publicly leased land.
“Bring the companies together in a public forum and say, ‘Hey, we’ve got all these leases that aren’t being drilled. What is the reason?’” Bartlett said. “And listen: Don’t start penalizing before you ask those simple questions.”
Bartlett said oil and gas companies have been on a rollercoaster for the last few years with prices low and producers shutting down wells before the pandemic hit.
COVID-19 kept them closed due to low demand. Now, companies may be hesitant to start to produce again because of Biden’s long-term plans for the industry.
“It doesn’t make you really warm and fuzzy to go out and want to risk a lot of money with the thought that we might not be around much longer,” Bartlett said.
Some Oklahoma lawmakers agree with industry heads. Representative Tom Cole called the decision reckless, misguided and irresponsible. Representative Stephanie Bice also said she disagreed with the President’s decision.