Congressional Update: Oil Reserve Withdrawal; Year-Round Ethanol, Gas Holiday Or Rebates?
On March 31, President Biden announced several actions to improve energy security. First, to increase oil supply and seek to reduce the price at the pump, President Biden announced that the Strategic Petroleum Reserve (SPR) will release 1 million gallons of oil per day for six months.
Experts have pointed out that the SPR action would lower prices in the short term but is not a long-term solution. There is also the possibility of Russia counteracting the benefits of the release by simply curtailing its own production.
President Biden also announced the U.S. would invoke a Cold War era law to incentivize domestic production of critical minerals needed for electric vehicle batteries.
Proposing additional solutions to reduce oil prices, a bipartisan group of lawmakers led by Reps. Angie Craig (D-MN) and Don Bacon (R-NE) encouraged the Biden Administration to ease two biofuel regulations, specifically allowing a fuel blend that is 15 percent ethanol (E15) to be available year-round.
The lawmakers are also requesting the U.S. Environmental Protection Agency reverse a plan to retroactively lower the blending requirement for U.S. oil refiners.
Congressional members said these actions would “significantly increase U.S. energy independence, lower prices at the pump, and ensure the continued success of our sanctions on the Russian economy.”
This comes as the Biden Administration is reportedly looking at lifting the summer E15 ban.
Gas Holiday Or Rebates?
Speaker Nancy Pelosi (D-CA), some Republicans, and some Democrats have still cautioned against a federal gas tax holiday, arguing that it would deplete the Highway Trust Fund and would not address the energy supply issue.
Speaker Pelosi did indicate that House Democrats would consider legislation including gas “rebates” or direct payments.
FY 2023 Budget Proposal
Last week, the Biden Administration released its $5.8 trillion budget proposal for Fiscal Year (FY) 2023. In the proposal, the Administration focused on increases to defense spending considering the Russian-Ukraine War, proposed tax hikes on the wealthy to reduce the nation’s deficit, included a deficit-neutral reserve fund as a placeholder for Build Back Better funding requests, and proposed an historic antitrust funding bump to help assist the Department of Justice’s (DOJ) Antitrust Division and the Federal Trade Commission (FTC) with ongoing and future litigation.
The budget is viewed in Congress as “dead on arrival” but serves as an indicator of what areas President Biden will prioritize.
More broadly, Congress has one more week in its current work session before a two-week recess beginning April 8.
This week, the Senate will focus on confirming Ketanji Brown Jackson to the Supreme Court and negotiating an agreement on additional COVID-19 funding for testing and vaccines.