President Joe Biden came into office vowing to be the most ambitious president ever on climate. A little over a year into his presidency, soaring oil and gas prices as a result of Russia’s invasion of Ukraine brings new dilemmas for the Biden administration’s climate goals.
President Joe Biden came into office vowing to be the most ambitious president ever on climate, to re-establish the country’s credibility in international climate diplomacy and put the country on a long-term trajectory to phase out fossil fuels. A little over a year into his presidency, his administration is dealing with soaring oil and gas prices as a result of Russia’s invasion of Ukraine, a situation that threatens the global economy, not to mention Democrats’ outlook in the November midterm elections. The Russia-Ukraine conflict and energy security issues continue to dominate the conversation in Washington. Climate activists and progressive Democrats see the current crisis as an opportunity to hasten clean energy adoption to not only meet our climate goals but also strengthen national security and reduce geopolitical risk. However, the political mood in the United States may not allow that to happen. With the President’s ambitious Build Back Better legislation possibly dead in the U.S. Senate, conservatives advocating for increased domestic drilling, and the Biden administration calling on foreign oil producers to boost production to lower oil prices, getting traction on climate policies will remain difficult in Congress.
The full-scale Russian invasion of Ukraine on February 24 has placed the Biden administration in a precarious position of having to leverage economic sanctions and trade barriers to damage Putin’s regime. As the global community responds to escalating Russian attacks, President Biden’s decisions on energy have carried significant – and perhaps negative – implications for long-term climate commitments. As the administration has voiced a strong commitment to defending the security of European allies while preventing further volatility in global oil markets, the price of gasoline has remained elevated since the conflict began. The need to secure enough fuel supplies to provide relief for American consumers, at least for the time being, could distract the administration from its goal of transitioning toward renewable energy sources. If gasoline prices remain high, this situation may also likely undermine Democrats’ chances in the approaching midterm elections.
Energy Sanctions: The Nord-Stream 2 Pipeline, U.S. Ban on Russian Oil Imports
The Biden administration had originally wanted to avoid penalizing Moscow through actions against its energy assets amid worries of the economic costs of disruption, but as the war has deepened, a bipartisan consensus in Washington and transatlantic cooperation have led to energy being used to gain leverage over Russia. Germany completely halted the certification of the Nord-Stream 2 pipeline while the U.S. is imposing sanctions on the project’s company. There have not been any immediate impacts on supplies because the Nord-Stream 2 pipeline was not yet operational. Instead, these actions were taken to punish Russian aggression by removing a significant source of potential state revenue. President Biden shifted on this issue to align the United States with Germany and because of bipartisan consensus on the decision to move forward with Nord-Stream 2 sanctions.
There was also a bipartisan consensus on Russian energy imports, with both Republican and Democratic lawmakers expressing that this would be the most effective economic tool in further deterring Putin. Besides banning the imports of Russian coal, liquified natural gas, and oil into the United States, the United States also prohibits any new investment in Russia’s energy sector and the financing of any foreign companies that may be investing in Russian energy production. The United States banning oil imports from Russia should, in theory, have only a small impact on prices as it bought only about 670,000 barrels per day of crude oil and petroleum products last year, or approximately 3 percent of total demand. But the U.S. action is part of the West’s aim to isolate Russia through curbing purchases of its oil and gas, which has prompted fears of a tightening global market and concerns that oil and gas supply will remain at risk as long as the conflict continues.
Despite strong bipartisan support for the ban on Russian oil imports, Democrats and Republicans differ on how current international developments should ultimately influence the future of U.S. energy development. The Russian-Ukraine crisis has highlighted key vulnerabilities in the global oil and gas market, as the dependency on foreign sources of fossil fuels has become a significant concern regarding national security. The administration has spoken on the fact that in order to protect the U.S. economy, it is necessary to become energy independent, with a transition to renewable sources and electric vehicles (EVs) as the long-term goal. Despite making this argument, the White House has not been as vocal as some climate activists would like. And the fact that the administration is trying to get OPEC producers to increase output has not helped President Biden’s climate credentials. His Secretary of Energy Jennifer Granholm told a group of oil executives at a major energy conference in Houston that they should increase production to help alleviate high prices.
Meanwhile, Senator Chris Murphy (Democrat-Connecticut) spoke for a lot of Democrats when he said: “I represent a state that’s going to have a lot of wind power online very soon and so my preference would be to try to fill in [the supply] gap with renewable energy.” Members of the GOP are in strong opposition to making renewables the solution, with many – predictably – supporting more immediate actions such as lifting restrictions on hydraulic fracking, re-evaluating pipeline permitting policies, with debates over the contentious Keystone Pipeline re-emerging, and opening more public lands for oil and gas drilling. This current situation of having to balance support for climate action with trying to keep oil prices in check will certainly test the administration in months to come. For now, the American public is supportive of the ban on Russian imports even if it means higher gasoline prices, but it is unclear for how long consumers will remain patient. Moreover, Republicans will attempt to use the issue of high gasoline prices to erode support for President Biden and the Democrats, even if their short-term options to lower prices are limited.
Climate Diplomacy Amid the Russia-Ukraine Conflict
Whether any major breakthroughs in climate diplomacy are in the cards this year hangs primarily on how the situation in Ukraine unfolds. In a recent speech in Egypt, Secretary Kerry urged world leaders not to allow Russian aggression to hamper climate ambition, and the issue will continue to be a priority for the Biden administration. This received a negative reaction, particularly from Republicans, as reflected in this tweet from Senator Marco Rubio (Republican-Florida): “Climate change religious zealot John Kerry is worried that the first major ground war in Europe in 80 years & #Putin’s threat of nuclear consequences is getting more attention than his climate agenda.” It is inevitable that the situation in Ukraine will remain at the top of the agenda at least until hostilities cease, and likely for some time after. It is impossible to predict how the current situation in Ukraine will play out and what its ramifications will be. Still, at this point, chances do not seem high that world leaders will have the bandwidth for major diplomatic efforts between now and November when the next round of climate talks (COP27) will take place in Egypt.