Gas prices, insurance rates, and consumer goods have all soared in recent months, making car ownership
less than ideal for many. With an oil shortage and talk of inflation currently ongoing, President Biden has decided to open up the U.S. petroleum reserves to help combat at least one of the problems. This should help limit the hefty prices and oil crisis that's being talked about so widely.
Understanding precisely how this works and how it will impact the country is important. What does it mean for the oil we purchase from other parts of the world and is it enough to save us?
How the Russian-Ukraine war is causing gas prices to soar
Russia is at war with Ukraine. Now, countries from all over have opted not to continue any type of working relationship with Russian companies. This means no more oil coming in from the country.
It has sparked a concerning increase in overall gas prices across the U.S. Many states have seen their costs rise to over $4 per gallon because of this war when it was barely half of that two years ago.
Biden unleashes oil reserves
Biden has declared that the U.S. oil reserves will be unleashed over time. This will boost our supply and keep prices down. One million gallons per day will be provided throughout 2022, according to MotorTrend
. Throughout 2023, the amount will lessen to 700,000 gallons per day. These significant numbers should help level the playing field. The U.S. can once again rely on its own oil, rather than having to purchase it elsewhere. It needs to greatly ramp up production to meet these numbers, though.
The government is issuing fees on anyone who does not comply with production rates. Those companies who have oil wells that are not being used can be penalized if they do not begin producing the oil we need.
Public lands need to be tapped into as well in order to get the number of gallons necessary to combat these rising costs.
How does this impact oil needs from other countries?
Producing more oil in the U.S. and becoming self-sufficient means we will not need as much from other countries going forward. Oil alone will not solve the problem, though. Biden is also vowing to utilize additional energy sources in this effort.
The Defense Production Act requires the U.S. to produce critical materials, rather than purchasing them elsewhere. He understands that it's time to look ahead at clean energy options that are better for overall costs and the environment.
Minerals and materials necessary for large-capacity batteries are where the focus needs to be going forward. Manganese, graphite, lithium, cobalt, and nickel all need to be heavily produced here in order for this to work.
Plug-in hybrid electric vehicles, or PHEVs, as well as battery electric vehicles, or BEVs, are the new focus.
Once the U.S. has brought down costs and is producing far more than needed, we can easily fill our reserves back up. With more than necessary, we can be the ones to export oil to other countries and profit.
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