What does the Biden administration tapping into gas reserves mean for NJ’s fuel supply?
Gas prices, give or take a few cents, are right around $3.50 a gallon of regular – about 10 cents higher than last year.
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The Biden administration said it would sell off the nearly one million barrels of gasoline this week that are contained in New Jersey’s reserves.
But what does that mean for summer gas prices, and does it put the state at risk for fuel shortages in case of a crisis, such as a hurricane?
Summer driving is about to get in full swing ahead of Memorial Day. Gas prices, give or take a few cents, are right around $3.50 a gallon of regular. This is about a dime higher than last year.
But will selling off New Jersey’s gas reserves lower prices at your gas pumps?
“It’s just not enough volume compared to the world’s oil supply. It’s inconsequential quite honestly,” said Ben Phillips, of Boonton.
MORE: Biden releasing 1 million barrels of gasoline from Northeast reserve in bid to lower prices at pump
Tom Kloza, the global head of energy analysis for Oil Price Information Service, agrees.
“One million barrels is really just spit in the ocean because we have about 228 million barrels of gasoline in storage,” said Kloza. “And this weekend, we will use about 37 million barrels. One million barrels doesn’t amount to much.”
New Jersey’s gas reserves came to be following Superstorm Sandy in 2012 when the Obama administration set aside one million barrels – mostly in New Jersey - in case of a crisis. In the decade of its existence, it’s never been tapped.
“I don’t think we are getting rid of a safety net. I think it was a silly safety net to begin with. Really what you have to worry about with a natural disaster is the loss of electricity,” Kloza said.
The biggest factor leading to a spike in prices this year would be a major hurricane in the Gulf of Mexico in August, according to Kloza.
He says anyone touting lower prices from their specific actions, especially during an election year, is simply playing politics.
“Whoever is president doesn’t have much to do with what you pay for oil. It depends on OPEC and more recently Russia. So whoever wins the next election I don’t think you can blame them for high prices for fuel,” Kloza said.
