The United States is blessed with vast amounts of oil and gas reserves. On Dec. 30, 2022, the Energy Information Administration released the most recent data on proved oil reserves in the U.S. Proved oil reserves increased by 6.2 billion barrels to 44.4 billion barrels in 2021 over 2020. The U.S. holds the world’s largest recoverable oil reserve base – more than Saudi Arabia or Russia. The U.S. has 264 billion barrels of recoverable oil reserves. It is all a matter of price.

With appropriate hydrocarbon energy policies, the U.S. would be impervious to the price-fixing policies of Saudi Arabia and other OPEC and non-OPEC countries. But the Biden administration , through its misguided hydrocarbon policies, chooses to make the country dependent on the whim of other leaders who do not have America's best interests at heart. Biden’s energy policies make the U.S. vulnerable in the event of a hot conflict with China, as, in times of war, the U.S. military burns fuel.

In 2022, however, in order to keep gasoline prices low and to prevent large Democratic losses in the November midterm elections, Biden flooded global oil markets by releasing oil from the Strategic Petroleum Reserve (SPR). Biden thus violated his fiduciary duty to the people. His duty is to protect the nation from hydrocarbon insecurity. Instead, Biden pandered to populists. To compound his dereliction of duty, Biden said he would begin to replenish the depleted oil reserves of the SPR when oil prices ranged between $67 to $72 a barrel. Well, prices did fall below $70 a barrel in the first quarter of this year. The administration tendered bids to replenish the SPR, and U.S. producers responded, but the administration rejected their bids.

The administration has yet to begin to replenish SPR, and is becoming a speculator in global oil markets. Last week, oil prices surged after Saudi Arabia and other OPEC and non-OPEC producers announced oil production cuts of over 1 million barrels a day. Prior to the price surge caused by the announcement, West Texas Intermediate, the U.S. oil benchmark, had been trading between $68 to $75 a barrel. With the production cut announcement, oil popped to over $80 a barrel. Gasoline prices will follow oil higher.

U.S. households will also be squeezed as they are, at the present time, especially vulnerable to gasoline price spikes. Adding to this, the U.S. economy is slowing. The Federal Reserve Bank of Atlanta just lowered its GDP forecast to 1.7% , down sharply from earlier forecasts. If Biden had not played politics with the SPR, and if he had started to replenish the SPR, U.S. households would be less vulnerable to the economic shocks emanating from the Middle East.

Appropriate U.S. hydrocarbon policy would be price supports for the production of oil and gas, as the U.S. needs a plentiful supply of oil and gas. Price supports would harm Russia and Iran. Is this controversial? Well, consider that the U.S. needs food security. In turn, the U.S. has agricultural price supports.

Hydrocarbon price supports would be good policy allowing Biden to be a good steward of the nation.

James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes  a daily note on finance and the economy, politics, sociology, and criminal justice.