As the Strategic Petroleum Reserve SPR falls to dangerously low levels, American Petroleum Institute President and CEO Mike Sommers issued a warning to the Biden administration that a negligent plan could cause another economically painful oil crisis.
The Strategic Petroleum Reserve has become a strategic political reserve. We have grave concerns about how it has been politicized. Sommers said on Mornings with Maria that this is for emergency purposes, not to lower gasoline prices during a time during a political season. I think doing this willy-nilly and doing it in a way that doesn't make sense for the market we're in, we could be dealing with another major oil crisis here in the next few weeks. Maria, we're real concerned about how low it's gone. Sommers continued at the lowest level since 1984, not necessarily because of market conditions, but because of political concerns.
The oil industry exec stressed the importance of refilling the reserve, and doing so with a non-political strategy. The price of crude falls to $70 a barrel a barrel, a level that should be a concern for all Americans, as the Biden administration plans to halt oil sales from the Strategic Petroleum Reserve. In my view, the best plan is to not use it in a way that is for political purposes, and instead to use it in a market-based way. If there is an emergency, that's what this is for. In 1984, when it was at the levels we're currently at, the real concern is that we were using 20% less oil, according to Sommers, who told host Maria Bartiromo.
As the economy continues to grow, we need more SPR, of course. Let's do this in a way that makes sense for the market. The CEO continued, not that it was not in a way that does it for political purposes.
The Biden administration has tried to convince Americans that the President has issued a surplus of drilling permits throughout the U.S., but they don't recognize the difficult and tedious process of issuing a drilling permit, Sommers pointed out.
The Pentagon's spokesman John Kirby said that there were plenty of opportunities for oil and gas companies to drill on US federal lands, and that the President has issued 9,000 permits for drilling on U.S. federal lands. Sommers refuted this declaration.
This is a myth, and it's been debunked several times, but the administration continues to use it. As soon as you get a lease, they make it seem like you can start drilling on that property. He argued that you have to do a lot of prep work before you get a lot of permits before you can actually produce on those federal leases.
Sommers concluded that the administration should stop talking about these false statistics and get these permits approved so that we can continue to produce both on federal lands and federal waters.