Mar 9, 2022

Biden bans Russian energy.

Biden bans Russian energy.
Photo by Ian Simmonds / Unsplash

Now what should we do?

I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 11 minutes.

Biden announces a ban on Russian energy imports. Plus, a question about local elections and a very, very cool "Have a nice day" section.

Shipyard Mission Bay
Photo by Ian Simmonds / Unsplash

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Quick hits.

  1. The Russian military struck a children's hospital in Mariupol (The bombing). Ukrainian President Volodymyr Zelensky addressed the U.K.'s House of Commons, pleading for support (The address). The Polish government is reportedly preparing to deploy its entire fleet of fighter jets to a U.S. airbase in Germany, which may then pass them on to Ukraine. U.S. officials say the plan may not be tenable. (The jets)
  2. Florida Republicans passed their controversial "Parental Rights" bill yesterday, which now heads to the desk of Gov. Ron DeSantis to be signed. (The bill)
  3. President Biden is planning to issue an executive order to mobilize the federal government on regulation of digital assets and cryptocurrencies. (The order)
  4. A jury found Jan. 6 Capitol riot defendant Guy Reffitt guilty on all charges, the first trial stemming from the events of that day. Reffitt was found guilty of transporting a firearm in furtherance of a civil disorder; obstruction of an official proceeding; entering or remaining in a restricted area or grounds with a firearm; obstructing officers during a civil disorder; and obstruction of justice. (The trial)
  5. Hawaii announced it will end its indoor mask mandate on March 26, making it the last U.S. state to do so. (The mandate)

Today's topic.

The energy ban. Yesterday, President Joe Biden announced the U.S. was banning all imports of Russian energy products, an effort to target a critical element of the Russian economy as the United States and its allies try to ramp up the pressure on Vladimir Putin to end the war in Ukraine. “Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin’s war machine,” Biden said.

The ban will take effect immediately and comes after days of public pressure from lawmakers across the political spectrum to take action. Crude-oil imports, certain petroleum products, liquefied natural gas and coal will all be part of the embargo, according to Biden's executive order. U.S. companies have 45 days to wind down existing contracts, The Wall Street Journal reported.

Because of heavy reliance on Russian energy sources, allies in the European Union have cut back on Russian oil, but thus far refused to take a similar stand. President Biden seemed sympathetic to this reality in his remarks, saying, “We can take this step when others cannot." Over the last 12 months, Russia accounted for 7.9% of crude oil and petroleum products imported into the United States, as the U.S. gets most of its imported oil from Canada, Mexico and Saudi Arabia.

The decision comes at a time when the price of gasoline is already at a record high, $4.173 per gallon, in the United States. It has risen precipitously since the Russian invasion of Ukraine, and experts believe it will keep climbing. President Biden reportedly anticipated the political price for the embargo, which is likely to raise prices even further, but has been buttressed by its bipartisan support. Public polling from Quinnipiac also shows that a vast majority of Americans — 71% — support a ban, even if it raises gas prices (nearly 8 in 10 also said they'd support a military intervention if Russia attacked any NATO ally).

Below, we’ll take a look at some reactions to this news from the right and left, as well as the debate over what to do now.


Agreed.

There was widespread bipartisan support for a ban on Russian energy imports, including bipartisan legislation to push it forward before Biden made it happen by executive order. However, there is strong debate about what the U.S. should do now to get energy prices down.


What the right is saying.

  • The right says Biden is to blame for a lack of U.S. energy independence.
  • They argue that we should turn to domestic drilling and fracking to get costs down.
  • They criticize Europe for relying on Russia and are skeptical of renewables as an answer.

The Wall Street Journal editorial board said Biden made the right decision to ban oil and natural gas imports from Russia.

"Yet at the same time he declared full-steam ahead on his green energy 'transition' that includes an assault on U.S. fossil fuels. The contradiction is maddening," the board said. "Once uncertainty about the scope of sanctions clears up, Russia will probably find global buyers for its energy at a discount. Imposing so-called secondary U.S. sanctions on institutions that finance Russia’s energy trade would be more effective. But the White House won’t do that because it fears it could drive gasoline prices even higher. If that’s the worry, then here’s a better idea: Stand at the White House and declare that his Administration will support the development of U.S. oil and gas.

"Rescind all regulations designed to curb production, development and consumption. Announce a moratorium on new ones. Expedite permits, and encourage investment," the board said. "Replacing Russia’s five million barrels of global crude exports with U.S. and Canadian oil and building pipelines to transport it would take time. But the transition to a fossil-free world will take decades and technological breakthroughs—and will leave the U.S. dependent on China, Russia and other countries for minerals like lithium and nickel."

Rich Lowry said if the Ukraine war hasn't scared the West straight on oil, nothing will.

"Oil is a miracle fuel. Alex Epstein of the Center for Industrial Progress writes that it is 'almost eerily engineered by natural processes, not just for cheapness, not just for reliability, not just for scalability, but also for another characteristic crucial to a functional civilization: portability.' It powers cars, trucks and jets, without which the modern world as we know it wouldn’t exist," Lowry wrote. "Coal, too, Epstein notes, is affordable, abundant and easy to extract and transport. There is a reason that developing nations invariably turn to it to power the industries crucial to economic advancement.

"So it shouldn’t be a surprise that fossil fuels are still the leading source of global electricity, with coal accounting for 36.7% and gas 23.5%. The total fossil-fuel contribution, at 63.3%, is down only slightly from two decades ago," Lowry said. "For its part, green energy — wind, solar and other renewables — accounts for around 10% of global electricity and even less of total energy. Vladimir Putin knew this and understood the power it gave him, even if European policymakers wanted to evade the matter... In light of all this, Europe still chose to subjugate itself to an anti-Western authoritarian, and even as Russian opera stars are getting canceled, it is hesitant to stop purchases of Russian oil and gas. Some perspective is called for. While climate change may indeed prove a serious long-term challenge, it is not reducing parts of European cities to rubble or a threat to use as a tactical weapon."

In American Greatness, Victor Davis Hanson said "Gas and oil, and thus who tried to curtail both, explain a lot of the current mess."

"The nihilist Biden’s decision voluntarily to cancel new pipelines, federal leases, ANWAR, and leverage loss of bank financing for fracking, and to give up well over 2 million barrels of daily production will be seen not just as an economic disaster. It was a strategic catastrophe," Hanson wrote. "When Europe, or indeed the West, is dependent on Russian goodwill to drive and keep warm, it can never be free. Ending American energy independence is not just an AOC obsession. Russian hackers in January targeted our Colonial pipeline, shutting down in a day over 1 million barrels of transported oil. The more we discount the strategic consequences of having or lacking oil, the more our enemies fixate on it.

"Why did Biden blow-up energy dependence? Could not tomorrow Biden reverse course, greenlight the Keystone pipeline, reverse his mindless opposition to the EastMed pipeline that would help allies Cyprus, Greece, and Israel to help other allies in southern Europe, and throw open new federal leasing to supply exports of liquid natural gas to Europe?" he asked. "What is moral, and what amoral: alienating Bernie Sanders and the squad or keeping our allies and ourselves safe from foreign attack? What is so ethical about following the green advice of billionaires like global jet-setter John Kerry at the expense of the middling classes who cannot afford to drive their cars or warm their living rooms?"


What the left is saying.

  • The left says more fossil fuel production won't help us.
  • They criticize Republicans for supporting the ban while hammering Biden over gas prices.
  • They call for an investment in renewable energy.

In The Washington Post, Jennifer Rubin said Biden is anticipating "disingenuous" GOP attacks.

"First, Biden made clear that while the United States can ban energy imports, the European Union is in a far different place, given the extent of its reliance on Russian energy. This is not a sign of “disunity” as some media and GOP pundits insist whenever the U.S. and E.U. are not in lockstep. This is reality. However, Britain joined the United States in declaring it would end Russian oil imports by next year. And the E.U. did take an extraordinary step. The Post reports, 'The European Commission on Tuesday presented a plan to cut Russian gas imports by two thirds this year, steeply reducing — but not severing — energy ties to Moscow. The proposal … is a dramatic shift,' given that 40 percent of the E.U.’s gas and 25 percent of its oil comes from Russia."

"Second, Biden also conceded up front that his ban would not be cost-free. 'The decision today is not without cost here at home. Putin’s war is already hurting American families at the gas pump,' he said... Finally, and most important politically, Biden addressed the already prevalent and false accusation from Republicans that his administration has somehow hamstrung energy extraction domestically," Rubin wrote. "He pointed out that 90 percent of drilling is on private lands, and of the 10 percent on government-owned land, more than 9,000 permits have been granted but sit unused. In short, don’t blame the federal government if domestic producers are not tapping existing supplies."

In Vox, Rebecca Leber said America can't solve its gas price problem by drilling more.

"Republicans and conservative commentators have had a field day using Russia’s invasion of Ukraine as an opportunity to bemoan US energy policy and champion fossil fuel reserves. They’ve pointed fingers at the Biden administration, environmentalists, and even Swedish teenager Greta Thunberg, alleging that climate priorities are what have kept America from its 'energy independence.' If only oil and gas companies were allowed to drill or frack more, we’d have a quick fix to rising energy prices in the US and Europe and to Putin’s influence, they’ve said"... But "Biden has done nothing to halt oil leasing. In fact, the Biden administration has outpaced Trump in issuing drilling permits on public lands and water in its first year, according to federal data analyzed by the Center for Biological Diversity. His administration set a record for the largest offshore lease sale ever in the Gulf of Mexico last year, before a federal court blocked the lease sale for not considering climate impacts.

"According to an op-ed in the Hill from Rep. Gus Bilirakis (R-FL), increasing oil and gas production is as easy as 'flipping the switch.' The White House would probably be pulling those levers if it could because Biden advisers have said they’d like to see more production," Leber said. "But oil companies have made it clear in earnings calls with shareholders that they don’t plan to produce much more, anyway... Oil and gas prices have climbed in the US because demand during the pandemic has bounced back faster than supply, and with instability caused by factors that include Russia’s war in Ukraine... In other words, now that companies are making handsome profits, they’re using that extra cash to reward investors and pay down debts, not invest in new production."

In MSNBC, Hayes Brown said "the Republican Party would prefer you focus on the record-high price to fill your tank than on any bipartisan support for cutting off Russia."

"In the race to politically exploit the high cost of gas, Republicans are banking on voters not caring that they’re lying through their teeth about how much of this is Biden’s fault," Brown wrote. "The president does not, as they would have you believe, have a dial in the Oval Office that he uses to set gas prices. Meanwhile, suggested fixes the GOP has offered up would do nothing to shrink Americans’ costs, which suits them just fine for now. Vox’s Rebecca Leber put together a great roundup [above] of the myths that Republicans have been touting, including their claim that Biden choked off oil production and that it’s Democrats who aren’t 'flipping the switch' on more production.

"As Leber noted, oil companies are the ones who won’t be ramping up production anytime soon," Brown added. "The industry is still trying to recover its losses from during the pandemic, when demand for oil cratered and prices briefly plunged to negative levels. Likewise, while the number of active rigs in the U.S. continues to rise after that 2020 crash, oil companies, like most other industries, are struggling to hire workers and procure equipment amid the ongoing supply chain backlog... Crude oil was trading around $126 per barrel Tuesday, 58 percent higher than the roughly $80 per barrel it was at before Russia’s aggression against Ukraine roiled the market. That price, which makes up over half the total cost per gallon of gas, is based on global demand — something Biden has even less control over than how much your local Exxon station charges."


My take.

We're in a big jam.

The first thing to note here is that how this decision impacts Russia is still unknown. As others have noted, we account for roughly 10% of the oil and natural gas exports from Russia. So abandoning them will make a dent, but — on top of taking 45 days to be totally realized — it isn't going to bring Putin to his knees as quickly as some seem to think. That would happen if Europe followed the same path, but such a position is entirely untenable: The continent wouldn't be able to heat homes or travel without Russian oil and gas. Still, reports that they are hoping to cut Russian gas imports by two-thirds is a massive commitment, one that could re-align the global energy sector for good.

It will also truly hurt Russia. Big time. With each passing day, I get less and less confident that Putin has an off-ramp. Which, at first glance, feels good: He's paying the price for his actions, even though he continues to spread death and destruction in Ukraine. But there's something about it that makes me incredibly nervous, too. What will he do when it becomes apparent there is no way out?

As for us and oil, I'm reminded of friends and family who have fought addiction. The first step is admitting you have a problem. However infuriating it may be for environmentalists to hear, it seems like the U.S. is finally collectively realizing our dependence (and addiction) to fossil fuels makes us not just vulnerable to hurting our environment, but vulnerable on the global stage, too. Either way, there seems to be a newfound momentum to do something and change course.

I think the WSJ editorial board gets it right when it says this: "Replacing Russia’s five million barrels of global crude exports with U.S. and Canadian oil and building pipelines to transport it would take time. But the transition to a fossil-free world will take decades and technological breakthroughs—and will leave the U.S. dependent on China, Russia and other countries for minerals like lithium and nickel."

If we don't learn from this experience, what's the point? Any path toward a renewable future needs to be paved without reliance on a geopolitical foe who could one day use that as leverage over us while they, say, invade Ukraine, or destabilize Yemen, or occupy Taiwan.

But many of the defenses from the left are also true. For starters, gas is still well off a “record high” when adjusted for inflation or how far it will get you. That’s not to say it isn’t bad, because it is, but for this to be a crisis like the one we saw in the 1980s we’d need gas prices to eclipse $10 per gallon. I've never put much stock in the control a president has over gas prices, and I don't think you should either. Prices have skyrocketed not just because of Putin's war, but because of the pandemic shock. And Leber is right to point out that oil companies cannot simply flip a switch and ramp up production even if they wanted to (which they don't). They are paying off pandemic-caused debt and raking in record profits. It's also true that things like the Keystone XL pipeline wouldn't have helped, either: Even if Biden had greenlit that project, and even if it had gone perfectly to schedule (which such projects rarely do), it wasn't even going to be operational until 2023. So it wouldn't be helping us now.

So what do we do? In broad, generalized language: We do both.

As I said yesterday, Americans are going to have to pay the price for now, and I'm certain that Biden will embrace whatever increased domestic production the oil companies are willing to commit to stave off some kind of fuel calamity at home. That seems like a given. It still might take months to bring prices down even a little, but it'll be far quicker than anything renewables can do to fill the gaps in the short term.

And the only way that plan is acceptable is if it’s paired with a clear path forward on building an energy future that is both founded in renewables and not reliant on a functioning supply chain from our adversaries. We simply cannot keep making the same mistake — accepting an over-reliance on energy from abroad— over and over and over, without making change.

Have thoughts about "my take?" You can reply to this email and write in or leave a comment if you're a subscriber.


Your questions, answered.

Q: I personally am not the biggest fan of regional politicians (e.g. Bernie, Marjorie Taylor Greene, AOC) endorsing political candidates from other regions (Senate, House, mayoral, etc). It feels like a step in the direction of more identity politics where people are encouraged to vote a specific way because some figure said so. The whole reason politicians should be running for regional offices is to represent those regions and communities, right? So why should it even matter if a politician from a different region endorses [them]? I'd MUCH rather see endorsements from community groups and politicians in the regions that candidates are actually running in. What are your thoughts on this?

— Louie, Seattle, Washington

Tangle: I agree 100%. I think a lot of Americans still don't understand that local politics are the lifeblood of the country, and that your vote in local elections is almost always going to have a greater impact on your life than your vote in national races (even when it comes to members of Congress).

One of the other big downsides of out-of-region endorsements is that they are so powerful that they cause local politicians to seek them out. And seeking them out means playing to national politics, which in turn means local politicians having to have an opinion or stance on a bunch of issues that may not be all that relevant to their work (but that will win votes). I think it's a very unfortunate trend.

But I don't see anything stopping it. So the best we can hope for is national politicians throwing their weight behind local candidates who really know the community well and intend to serve it — not just intentionally seek those offices out to use them as a stepping stone to national politics.


A story that matters.

Congressional Democrats have released a finalized $1.5 trillion spending package that they hope will stave off a looming government shutdown on Friday. The omnibus bill, which covers nearly everything the federal government spends money on, will also provide $14 billion of humanitarian, military and economic aid to Ukraine. The bill is a major boon for President Biden: It increases domestic spending to $730 billion, the largest non-defense increase in four years. But as part of negotiations, Democrats also agreed with Republican calls to raise defense spending to $742 billion. The bill may also include a bipartisan reauthorization of the Violence Against Women Act. Roll Call has the details.


Numbers.

  • $2.796. The average price of a gallon of gas a year ago.
  • $3.656. The average price of a gallon of gas a week ago.
  • $4.173. The average price of a gallon of gas yesterday.
  • $4.252. The average price of a gallon of gas today.
  • ~45%. The percentage of its natural gas the European Union imports from Russia.
  • ~20%. The percentage of its crude oil the European Union imported from Russia in 2020.
  • ~$1 billion. The amount of money, per day, Europe sends to Russia for coal, gas and oil imports.

Have a nice day.

The wreck of Endurance has been found in the Weddell Sea of Antarctica, 106 years after the ship was crushed in pack ice and sank. Ernest Shackleton led the doomed expedition, and the latest team of adventurers, marine archaeologists and technicians looking for the wreck over the ensuing 106 years announced last night that they had found it. The 144-foot, three-masted wooden schooner was found in near pristine condition thanks to the icy waters and lack of organisms that eat wood. The wreckage of the end of its famous voyage, which spawned one of the all-time great survival stories, had been buried 10,000 feet deep in the ocean all this time. The New York Times has the story (and images).


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