President Biden keeps clean energy focus; stresses steps to combat high fuel costs

President Joe Biden cast clean energy investments as part to his plan to bring manufacturing home and drive down inflation as he delivered his first State of the Union address at a time of increased sensitivity about elevated energy prices.

"I get it. That's why my top priority is getting prices under control," the president said March 1.

That plan for getting prices under control includes combatting climate change in a manner, he said, would slash household energy costs by an average of $500 a year.

Biden called for a doubling of clean energy production from wind, solar and other means; and for lowering the price of electric vehicles, a move he said would save consumers an additional $80 a month when compared with fueling traditional combustion engine vehicles. Investment tax credits for energy efficiency and building weatherization also made his list of climate actions.

Oil prices

To bring down fuel costs, Biden highlighted a March 1 announcement to release 30 million barrels of crude from the Strategic Petroleum Reserve. Tapping the SPR is part of a coordinated International Energy Agency effort that will see a total 60 million barrels released to calm global oil markets rattled by Russia's invasion of Ukraine.

"The market could find some reassurance from President Biden's commitment to consider an additional SPR release if needed," Jennifer Van Dinter, head of integrated analysis at S&P Global Commodities Insight, said.

Crude oil and refined products prices skyrocketed March 1 as front month NYMEX WTI surged way past the $100/b threshold, with Russian oil barrels increasingly considered toxic amid the country's military invasion.

NYMEX April WTI shot up $7.69 to settle at $103.41/b, after trading as high as $106.78/b during the day, moving to the highest pricing levels since July 2014. ICE May Brent jumped $7 to settle at $104.97/b. Prices pared after the International Energy Agency announced a global coordinated release of crude reserves.

"These steps will help blunt gas prices here at home," Biden said. "But I know the news about what's happening can seem alarming. But I want you to know that we are going to be okay."

Regular-grade gasoline prices averaged $3.61/gal across the US for the week ended Feb. 28, with West Coast consumers paying an average $4.31/gal, according to the US Energy Information Administration.

In the run up to Biden's address, oil and gas industry groups and Republican lawmakers seized on the European energy security crisis to advocate for a shift to an energy policy focused on driving increased domestic oil and gas production, encouraging exports and speeding oil and gas infrastructure permitting.

Citing Russia's invasion of Ukraine, Senate Democrats, including Joe Manchin of West Virginia and Edward Markey of Massachusetts, advocated for banning US import of Russian oil.

But Biden has made accelerating a transition to lower carbon sources central to his energy policy. During his address, he stuck to his theme of expanding clean energy technologies to thwart the climate threat, even as gasoline prices rise on geopolitical pressures.

Infrastructure

Additionally, the president touted his administration's infrastructure investments, including those he said would "withstand the devastating effects of the climate crisis and promote environmental justice."

"We'll build a national network of 500,000 electric vehicle charging stations," Biden said.

Emphasizing efforts to bring manufacturing back to the US as a strategy to help keep inflation in check and create jobs in America, he touted an $11 billion investment by Ford to build electric vehicles as well as another $7 billion by GM to build EVs in Michigan.

Legislation nod

The president touted the bipartisan infrastructure law as well, which marked a massive investment in the nation's infrastructure. Among other things, that bill included billions of dollars for electric vehicle charging infrastructure and clarified the Federal Energy Regulatory Commission's authority to approve projects in national interest electric transmission corridors in some instances should states deny permits.

"We're done talking about infrastructure weeks," Biden said. "We're now talking about an infrastructure decade."

The president did not reference the Build Back Better Act by name, though he did highlight some aspects of it in his address. The US House of Representatives passed the nearly $2 trillion climate and social spending package in November, but the legislation stalled after Manchin -- a key vote in the evenly divided upper chamber -- said he would not support the bill.

Democrats could seek to advance some of the climate and clean energy provisions in a separate bill, though it remains unclear what legislative vehicle they might use. Climate and clean energy advocates have said provisions of the Build Back Better Act, which contains hundreds of millions in clean energy tax credits, are key to meeting the Biden administration's aggressive decarbonization targets.