Tap the U.S. Oil Reserve

(Bloomberg Opinion) -- With inflation surging and Russia's invasion of Ukraine set to disrupt energy markets, President Joe Biden is considering tapping the U.S. Strategic Petroleum Reserve to stabilize prices and provide some relief to consumers. He shouldn't hesitate: Although the petroleum reserve has often been misused for political purposes, this is precisely the sort of emergency it was intended to counteract.

As a start, the president is right to recognize the urgency of the issue. By a wide margin, Americans rank inflation as their top concern. Nearly three-quarters are dissatisfied with current energy policies, the highest level in 20 years. Gas stands out as a particular worry: National average prices are now $3.62 per gallon, compared with $2.72 a year ago.

Russia's unprompted invasion of its neighbor could well worsen this picture. After Russian troops rolled across the border last Thursday, a closely followed global oil benchmark surged past $105 a barrel, the highest level since 2014, before retreating slightly. As the conflict grinds on, further disruptions — including much more severe sanctions on Russia — could wreak further havoc on energy markets and intensify the pain at the pump.

How could the petroleum reserve help?

Established in 1975 in response to the Arab oil embargo, the reserve was intended to protect the U.S. from future shortages. It currently holds about 600 million barrels of crude. By law, presidents can release some of this stockpile to prevent severe supply interruptions. In November, Biden ordered the release of some 50 million barrels, in coordination with five other major economies, with the hope of easing a surge in costs. Prices declined for a few weeks before starting to rise again in January.

Tapping the reserve again could have several benefits. It could once more provide some short-term relief at the pump, while helping to calm global energy markets if the conflict worsens. It might partially counter Russia's ability to wield its energy supplies as a weapon. And unlike a suspension of the federal gas tax, it wouldn't unduly harm the federal budget. In fact, it would provide a decent deal for taxpayers: The average price paid for oil in the reserve was $29.70 per barrel; each barrel sold today would likely fetch more than triple that amount.

In preparing for any such release, the administration should strive for bipartisan support, coordinate its efforts with allies, and increase diplomatic pressure on foreign oil producers to boost supply.

Two further steps would help.

One is for the Biden administration to offer more support and encouragement for domestic energy producers. Added U.S. production would help suppress oil prices, hinder Russia's ability to fund its war, and make it easier for the West to endure a prolonged conflict, while supporting the economic recovery and easing the transition to cleaner energy.

At the same time, the U.S. should continue investing in renewables, the only long-term way to reduce reliance on bad actors like Russia, stabilize future energy supplies, and mitigate the effects of climate change. To its credit, the Biden administration has been a champion of such policies; its Build Back Better plan contained about $555 billion for clean-energy projects, climate resilience and more. Redoubling efforts to pass the climate-related provisions of that bill should remain a top priority. So should a firmer commitment to supporting safe nuclear energy.

No one knows how Russia's misadventure will end, when inflation will ease, or precisely what energy markets may do over the coming months. That's all the more reason to take precautions now, while making prudent investments for the long haul.

Editorials are written by the Bloomberg Opinion editorial board.