- [Narrator] This patch of land, about 70 miles outside of Houston, Texas doesn't look like much but if you zoom in, these little rectangles sit
above a powerful economic and political tool. Just underground is a network
of caverns full of oil, part of the US's Strategic
Petroleum Reserve or SPR. Since March, President Biden has been tapping into it in a big way. - The Department of Energy released another 15 million barrels from the Strategy Petroleum Reserve. - [Narrator] All together,
the administration will have released 180
million barrels in 2022, the largest drawdown from the SPR ever. Pumping from the reserve,
the administration says has helped lower Americans' energy bills, and stabilize markets. But some oil industry experts disagree. - When we talk about the forces that are hitting the oil market, this does very little to change the tide. - [Narrator] Here's how the
Strategic Petroleum Reserve can be used to try to bring down prices, and why some are skeptical
that Biden's moves are working. (pensive music) Along the Texas and Louisiana coasts, the caverns are located in Bryan Mound, Big Hill, West Hackberry,
and Bayou Choctaw. As of October 28th, the reserve held about 399
million barrels of oil. - We're talking about sort of four storage sites, 60 caverns. The largest one I think is big enough that you could fit the Willis Tower that you have in Chicago in it. And the tower four for
reference is 1,451 feet. That's substantial. You could put a lot of oil in there. - [Narrator] So why does
the US government keep this much oil on hand? It goes back to the Energy Policy and Conservation Act of 1975. During the 1973 to '74 OPEC oil embargo, prices for oil skyrocketed. - As a result, we face the possibility of temporary fuel shortages and some increases in
fuel prices in America. - [Narrator] This led
to gasoline shortages across the country. - No gas. - There's no gas today?
- No. - [Narrator] When President
Ford signed the act into law, it was an attempt to establish a buffer against future supply shocks of this kind. It specified that presidents
can tap into the reserves when there's an energy supply interruption or due to obligations of the United States under the international energy program. Over the years, that's meant a few things. - Historically, the US
has drawn to the SPR for emergency and non-emergency releases. What's an emergency release? It's a hurricane that
disrupts all production. And what's a non-emergency drawdown? It's a sale mandated by Congress as part of policy making. - [Narrator] Using that authority, Biden tapped into the reserves
starting in the spring and through this fall. - We 're gonna continue
to stabilize markets and decrease the prices at a time when the actions of other countries have caused such volatility. - The market for oil has been very tight. And the US has had to balance
the fight against inflation, and gasoline prices has
been a main driver of that with targeting Russia and punishing it for its invasion of Ukraine. - [Narrator] Releases from the
SPR can help calm oil traders by injecting more crude
supplies into global markets. Right now, oil supplies are
tight, causing high prices. By taking oil from the reserves and selling it to traders and refiners, Biden is increasing supply in an effort to lower prices at the pump because gasoline prices are largely determined by oil prices. This strategy has worked in the past. Take when the government
tapped into the reserve after Hurricane Katrina as an example. The US sold 11 million barrels to keep production study
for the rest of the country. After the release, prices stabilized. And something similar
happened earlier this year due to Biden's March announcement when he said he'd release
one million barrels a day. - Treasury Department estimates that the releases that
we've seen this year, lower the price of gasoline between 13 and 31 cents per gallon. So that's a pretty broad range. - [Narrator] But industry
critics say that the oil releases have artificially lowered
prices in the short term, dissuading investment
in new oil production. US officials said they had
intended the reserve releases to be a stop gap until
domestic production ramped up. - There's only be a slight
increase in production so far this year, about 6% since January. And that's largely because
the large producers in the US have been conservative about spending. - [Narrator] Biden has tried
to deal with lower production by announcing that he
would refill the reserve. - That means all companies can invest to ramp up production now with confidence they'll
be able to sell their oil to us at that price in the future, $70. - [Narrator] But analysts have said that shifting from releasing the reserves to refilling them could
remove large amounts of oil from the global market, which would continue to tighten supplies and contribute to inflation. They say that Biden should
wait to refill the reserves until there's a surplus
of oil and lower prices. The latest release from the reserve, the 15 million barrels, are said to be delivered in December. - Biden has said that
he would ask his team at the Department of Energy to, depending on the situation, make further releases from the SPR. So he has not ruled out
additional releases. - [Narrator] Until the SPR is refilled, federal inventories are at a 38-year low but Biden says there is still
enough in case of emergency. (dramatic music)
