Will Tapping Oil Reserve Bring Down Seacoast Gas Prices?
Sens. Jeanne Shaheen and Maggie Hassan were among a group of 11 senators who convinced President Joe Biden to release oil from the Strategic Petroleum Reserve to blunt the steady rise in oil and gas prices.
Biden announced Tuesday he is releasing a total of 50 million barrels from the reserve. 32 million barrels will eventually return to the Strategic Petroleum Reserve while 18 million barrels are part of a sale of oil already approved by Congress that will be accelerated.
“President Biden’s move today to increase the supply of oil through the Strategic Petroleum Reserve will help meet the demand and lower prices for families and businesses alike. I applaud the President’s coordination with key allies to address surging global demand that’s raising costs for Americans," Shaheen said in a statement. "Lowering gas prices will help families reunite after months and years apart during the pandemic, and ensure hard-earned money can be directed where it’s needed most – not at the pumps.”
“Granite Staters are already struggling with rising fuel costs, which is why I called on the President to act,” Hassan said in a statement. “Today’s announcement is one step to help more Granite Staters afford fuel for their cars and their homes, and I will continue to push the administration to do everything in its power to help address this urgent issue.”
But will it really make a difference? Oil industry analyst Tom Kloza of the Oil Price Information Service told Seacoast Current it already has because of the "jawboning" about speculation about whether or not Biden really would tap the reserve.
"We saw effective jawboning when we had President Trump. You have to say this was effective jawboning by the Biden Administration. Put some fear into the people who think or thought there was no risk in the long oil future options," Kloza said.
Gas prices traditionally trend downward in the winter as people travel less and decrease demand.The true test of the difference the release of the reserves will make comes in the spring when demand goes back up.
According to GasBuddy.com the average cost of a regular gallon of gas in New Hampshire is $3.36. A year ago it was just below $2 a gallon; two years ago it was $2.44 per gallon.
"Every spring we see gas prices go back up. A lot of it was a lot of speculative draw. This year they're going to have some underlying reasons in addition to the speculative draw. It should be interesting," Kloza said.
Kloza also said some Republican governors could follow Florida Gov. Ron DeSantis's plan for a "gas tax holiday" from the state's 26 cent-per-gallon tax. DeSantis said it could bring up to $200 for the average Florida family.
Would New Hampshire Gov. Chris Sununu consider a gas tax holiday? Dean Spiliotes, SNHU Civic Scholar and Founder of NH Political Capital said if the idea catches on elsewhere it might at least e discussed.
"It may still be more of a wait and see situation up here. But I guess anything is possible, if prices don't moderate at some point," Spiliotes told Seacoast Current.
Contact reporter Dan Alexander at Dan.Alexander@townsquaremedia.com or via Twitter @DanAlexanderNH