Mar 08, 2022
The Biden administration on Tuesday imposed a ban on U.S. imports of Russian fossil fuels in response to Moscow's deadly assault on Ukraine.
Speaking from the White House, President Joe Biden announced that Russian oil, liquefied natural gas, and coal will no longer be accepted at U.S. ports. "Targeting the main artery of Russia's economy," he said, will "deal another powerful blow to Putin's war machine."
"Now Biden can follow with heroic leadership by using his executive authority to urgently boost renewable energy manufacturing."
The decision has "strong bipartisan support" and was made in "close consultation with our allies and our partners around the world, particularly in Europe," said Biden. The president acknowledged that the European Union's reliance on Russian fossil fuels means that the E.U. may not be able to move in lockstep with the U.S., though he said that the bloc is developing a "long-term strategy to reduce their dependence on Russian energy."
"Americans have rallied to support the Ukrainian people and made it clear that we will not be part of subsidizing Putin's war," said Biden.
The besieged Ukrainian government has consistently asked the U.S. and E.U. to further ramp up sanctions on Russia, but the White House had been hesitant to cut off fossil fuel imports from the country over concerns about its global economic impact. The fact that "Congress had been getting ready to take action this week ahead of the White House," Bloomberg reported, "put pressure on the Biden administration to move more quickly."
As Reutersreported, "Russia is the world's top exporter of crude and oil products combined, at around 7 million barrels per day (bpd) or 7% of global supply. Such a ban would be unprecedented, turbocharging already sky-high prices and risking inflationary shock."
Before it was officially announced, the possibility of a U.S. ban on Russian fossil fuel imports triggered a weekend surge in crude oil, which is approaching $140 per barrel, its highest level since a July 2008 peak of more than $147. The nationwide average price for a gallon of gas in the U.S. rose to an all-time high of $4.17 on Tuesday, breaking the previous record of $4.11 from July 2008.
The newly unveiled ban is expected to push prices even higher. As Reuters noted, "JP Morgan predicts oil could hit a record $185 a barrel by the end of 2022 if disruption to Russian exports lasts that long."
"The decision today is not without costs here at home. Putin's war is already hurting American families at the gas pump," said Biden, who vowed to do everything in his power to "minimize Putin's price hike."
The president noted that the U.S. is releasing 30 million barrels of oil from the nation's strategic reserves and "taking steps to ensure the reliable supply of global energy."
The president also rejected the right-wing claim that his administration's policies are "holding back domestic energy production." Biden boasted that even amid the Covid-19 pandemic, U.S. fossil fuel corporations "pumped more oil during my first year in office than they did during my predecessor's first year."
"We're approaching record levels of oil and gas production in the United States, and we're on track to set a record for oil production next year," added Biden. The president argued that any blame for untapped extractive potential should be placed on the shoulders of those who are sitting on millions of acres of federal land.
"They could be drilling right now, yesterday, last week, last year," Biden said of leaseholders who possess thousands of approved but unused permits.
This sentiment represents precisely the kind of fossil fuel boosterism that progressive critics have argued should not be accepted as a reasonable response to Russia's invasion of Ukraine, given that ramping up clean energy can--according to environmentalists--address the problem of authoritarian petrostates and the climate crisis simultaneously.
"Now that President Biden has made the right decision to cut Russian oil from our economy, he will face immense pressure from fossil fuel lobbyists and corrupt politicians to expand our domestic oil supply and to strengthen our reliance on oil dictators," Varshini Prakash, executive director of the Sunrise Movement, said in a statement. "He must resist this pressure, and instead lead a global transition to renewable energy that prioritizes human rights, democracy, and high labor standards."
Kassie Siegel, director of the Center for Biological Diversity's Climate Law Institute, echoed Prakash, saying that "in our rapidly heating world, oil is a disaster for human well-being wherever it's produced."
"The president just took a crucial and historic step to stop funding Putin's bloody assault on Ukraine," added Siegel. "Now Biden can follow with heroic leadership by using his executive authority to urgently boost renewable energy manufacturing for the U.S. and our allies, and halt the fossil fuels that feed both Putin's aggression and the climate emergency."
Biden, for his part, went on to say that Russia's war on Ukraine "should motivate us to accelerate the transition to clean energy."
"Loosening environmental regulations and pulling back clean energy investment... will not lower energy prices for families," said Biden. "But transforming our economy to run on electric vehicles powered by clean energy, with tax credits to help American families winterize their homes and use less energy--that will, that will help."
"In our rapidly heating world, oil is a disaster for human well-being wherever it's produced."
"If we do what we can," he continued, "it will mean that no one has to worry about prices at the gas pump in the future."
"It'll mean tyrants like Putin won't be able to use fossil fuels as weapons against other nations," added the president. "And it will make America a world leader in manufacturing and exporting clean energy technologies of the future to countries all around the world. This is the goal we should be racing toward."
According to the Washington Post: "Energy experts say many of these efforts could take months if not years to materialize, and the short-term domestic consequences of the Russia oil ban could be severe. With oil prices already rising, the Dow Jones industrial average closed down around 800 points on Monday, a drop of about 2.4%. Commuters could see gas prices north of $5 per gallon if Europe joined the U.S. government in banning Russian energy exports."
Meanwhile, Biden said that his administration is "going to keep working, with every tool at our disposal, to protect American families and businesses."
"To the oil and gas companies and to the finance firms that back them," Biden delivered the following message: "We understand Putin's war against the people of Ukraine is causing prices to rise... but it's no excuse to exercise excessive price increases, or padding profits, or any kind of effort to exploit this situation."
"Russia's aggression is costing us all, and it's no time for profiteering or price-gouging," said Biden.
Russian fossil fuels play a small but noticeable role in the U.S., which imports roughly 700,000 barrels per day of Russian petroleum products.
According to Bloomberg: "Russian oil made up about 3% of all the crude shipments that arrived in the U.S. last year, U.S. Energy Information Administration data show. Overall, imports of Russian oil and petroleum products represented about 8% of the U.S. total. U.S. imports of Russian crude in 2022 have dropped to the slowest annual pace since 2017, according to the intelligence firm Kpler."
Europe, by contrast, is much more reliant on Russian oil and, in particular, natural gas--importing approximately 40% of its gas and roughly a quarter of its oil, or about four million barrels per day, from Russia. For that reason, the leaders of European nations have resisted calls to ban Russian fossil fuels.
German Chancellor Olaf Sholz said Monday that Europe intentionally exempted Russian fossil fuel exports from sanctions because there is "currently no other way of securing Europe's supply of energy for heat generation, for mobility, for power supply, and for industry."
A ban on Russian fossil fuels "would further slow the nascent global recovery from the coronavirus pandemic," Reuters reported. "In the coming months, there is a high risk of stagflation, or little to minimal growth coupled with high inflation."
However, because the U.S. is a relatively small purchaser of Russian fossil fuels, "the bigger risk to prices rallying lies in coordinated action between U.S. and Europe," Bloomberg reported.
The United Kingdom is reportedly poised to join the U.S. in prohibiting imports of some Russian fossil fuels, though the U.K.'s ban is expected to exclude gas and be phased in over the course of several months.
Meanwhile, "the European Commission presented a plan Tuesday to cut Russian gas imports by two-thirds this year, steeply reducing--but not severing--energy ties to Moscow,"according to the Washington Post.
There is also a possibility, as The Guardianreported, that Russia retaliates against the West's new restrictions by clamping down on fossil fuel exports to the E.U., which would have a far-reaching impact on the global economy.
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