Zeihan: Biden releasing Northeast gas reserves to ease domestic prices

2023 sees record fossil fuel use and emissions, challenging transition to low-carbon energy amid climate thresholds. — Image credit: Reuters

On Tuesday, May 21, the Biden administration said it would release 1 million barrels of gasoline from a Northeast reserve to lower gas prices. American gasoline prices are primarily influenced by the cost of oil, but liquidating reserves is one way a president can impact costs. With domestic retail gas prices up around 15% this year, the sale was timed to provide relief as the summer driving season begins.

Watch the video above as Straight Arrow News contributor Peter Zeihan explains why the reserve was built up initially and why it makes sense to sell it off now.

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Excerpted from Peter’s May 29 “Zeihan on Geopolitics” newsletter:

If you’re planning a coast-to-coast road trip through the U.S., you might want to wait until the Biden administration can liquidate the northeast gasoline reserves, here’s why…

Congress has mandated that these gas reserves be liquidated for a handful of reasons — being expensive and dangerous make that list — but there’s a few more important things at play. The second phase of the shale revolution has helped bolster U.S. refining capacity, meaning these stockpiles just aren’t needed.

So, if this liquidation can help take the sting out of energy prices for the average American, especially at a time when usage is at its highest, that’s probably not the worst thing in the world.

Hey, everybody peters out here coming to you from a train and trance, which I thought would be a great backdrop to talk about the queue is desolate. What turned on at the moment is the Biden administration is in the process of liquidating the Northeast gasoline reserve. Now, this is something that was built up a little over a decade ago to make sure that seasonal demand surge, especially in the summer, don’t cause market problems, or God permitted up shortages. Total tolls on board, we’ll be back and we’re back. Anyway, that was the indices till now. But Congress has recently passed a law basically mandating the elimination of the reserve because storing fuel is expensive and dangerous, certainly more expensive and dangerous to the story, crude oil. And the United States now has the world’s largest refining capacity. So over the course of the last 10 years, we’ve kind of gone through the second phase of the shale revolution, where it’s not so much about oil or natural gas now, we’re starting to process all this stuff that we’re producing. So the United States in the last 25 years is adopting the world’s largest consumer of what a water in oil, largest importer of refined products, now the largest exporter of all of those studies, in addition to electricity, in addition to natural gas, and in addition to propane and butane, in addition to pretty much every energy and processed energy product on the planet. And so this reserve just isn’t necessary anymore. It’s an unnecessary expense. So you know, totes parade. There’s also, of course, a little bit of football. And you’ll never remember, this is a congressionally mandated thing to the Biden administration is doing but the Biden administration that covers as the executive has the ability to micromanage how it is done. So the reserve, which is about a million barrels of gasoline, or about 40 million gallons of gasoline, anyway, so the administration and decide how and when and where it is released? Well, it’s the Northeast reserves all fields in the northeast, so that’s kind of spoken for, as for the when they release will be between the first of July and Memorial Day. So right in the heart. Driving season five states with demand happens to be at the highest. The United States is having an issue with inflation right now. It’s something that administration is worried about personal survival. And so taking some of the sting out of energy prices at a time on non mandatory prices was gasoline prices, if that makes a lot of sense. So that that is what is going to up and I’m gonna go ahead refresh off my plan.