Vladimir Putin’s unjust invasion of Ukraine has resulted in a significant and spiraling humanitarian and security crisis. The epicenter of this crisis is Ukraine, and the staggering costs already forced to be borne by its people.
The consequences of this war have not stopped at Ukraine’s borders; broader impacts have been rippling out across the globe, and disruptions only look to increase.
One immediate and acute impact has been the spiking volatility of fossil fuels. The reasons for this are complex, but that hasn’t stopped an equally rapid spike in disposition of simplistic solutions here in the US, nearly all of which single-mindedly cater to fossil fuel interests.
It’s disheartening, yet unsurprising. Because for fossil fuel companies, the existential threat of diminishing fossil fuel use means they are always on the lookout for another justification to yoke us to their product.
But we can’t afford to fall for that routine one more time—indeed, present circumstances suggest we can’t afford the fact that we’ve already fallen for it so many times before.
So what’s the better path out of here? Reckoning with the near-term consequences resulting from our current use of fossil fuels, yes, but also committing to a clean energy future that gets us off this dependency, and all the instability and vulnerabilities it brings, once and for all.
To get to that future, policymakers must first reject the self-serving proposals brought by fossil fuel interests and instead engage with the types of policies that set a clear-eyed forward course.
Fossil fuels are the problem, not the solution
Russia is a major exporter of oil, gas, and coal. Last year, oil and gas exports alone comprised nearly 15 percent of the country’s gross domestic product (GDP); in January 2022, oil and gas revenues constituted 45 percent of Russia’s federal budget. Proceeds from fossil fuel sales are funding Putin’s invasion of Ukraine. Cutting those sales off, and the proceeds therefrom, would undermine a significant source of Russian revenue.
At the same time, Europe is a major importer of Russian fossil fuels, with gas dependencies particularly acute—the European Union imports 90 percent of its gas, and 45 percent of that comes from Russia. This has left European countries scrambling to mitigate the geopolitical vulnerabilities these fossil fuel dependencies have wrought, both in the short term should Russia cut off supplies and further down the road as a means of removing these vulnerabilities in the future.
At the heart of the European Commission’s proposed response is rapidly accelerating the shift away from natural gas, full stop. Meaning displacing gas use in the power sector, buildings, and industry as much as possible, as fast as possible. Not just for the short term, but forever.
Still, there will be a need for replacement gas in the near-term as these initiatives ramp up, and here all efforts are being made to source the gas from outside Russia, a combination of increasing regional production and increasing imports of liquefied natural gas, or LNG.
In the US, the race is ostensibly on to support Europe in these aims while simultaneously blunting the impact of surging global oil prices and reducing the geopolitical vulnerabilities our own ongoing fossil fuel use brings.
However, despite these well-founded objectives, the domestic policy conversation has been dominated by proposals that would do anything but.
In particular, this war has sparked frenzied lobbying by the fossil fuel industry to pass policies they say will enable rapidly ramping up domestic supplies of oil and gas—policies such as the government immediately moving to push lease sales, green-light drilling permits without restrictions, expedite expansion of LNG export terminals, build out pipelines without full environmental evaluations, and ease environmental regulations.
But that’s wrong in point and wrong in fact.
First, boosting domestic production of oil will not meaningfully shift the price of the global oil market, and it certainly won’t buffer Americans from the surging prices now being seen—to say nothing of the fact that it will only steepen the costs of climate impacts and climate action in the time ahead.
Second, none of the proposed policy interventions would actually move the production needle in the way that’s being suggested, because it hasn’t been federal policy limiting extraction, it’s been investor demands for capital discipline (read: profits) and pandemic-related labor and material supply shortages.
What the fossil fuel industry is conveniently ignoring
Of the major domestic policy provisions being floated, consider this:
- Federal vs. state/private lands: The overwhelming majority of policy discussion is centered on federal policy—but the overwhelming majority of oil (>75%) and gas (nearly 90%) extraction occurs on state and private lands.
- Leasing and permitting: In addition to the fact that most production occurs on state and private lands, the oil and gas industry is also currently sitting on thousands of unused federal leases, enough to cover industry’s needs for many years to come. What’s more, the Biden administration has been rapidly approving permits, and companies are sitting on thousands of DUCs, or drilled but uncompleted wells. To the extent industry now wants to run, it can run.
- LNG terminals: US natural gas exports are currently constrained by available LNG export facilities. Industry blames federal hurdles for this limit, but there are currently 14 LNG export facilities that have been permitted but are not under construction—it’s financing, not the government, in the way of seeing these through. This is likely in part clear-eyed investor understanding of timelines; LNG facility construction can take multiple years and requires long-term contracts, but the stop-gap need is immediate, and it is worth interrogating just how much LNG will still be needed in the decades to come.
- Environmental evaluations and standards: For any domestic oil and gas production to have a role in the global transition ahead, it must be subject to rigorous environmental enforcement; if not, it will be rapidly displaced by other countries’ appetites for comparatively cleaner sources. This is not hypothetical: just a few months ago France halted an LNG contract due to concerns about methane leakage rates in US oil and gas extraction. Rigorous standards provide the very license industry needs to operate, here and abroad.
Reflecting the tight market, U.S. crude oil and gas production is already forecast to rise in the coming year, no policy changes required. But because of fixed infrastructure constraints, lengthy multi-year construction timelines, immediate labor and supply shortages, and antipodal investor motivations, the US can’t do much to support Europe’s sourcing of alternative imports in the coming year beyond facilitating diplomacy to redirect LNG global shipments in the face of predominantly long-term shipping contracts.
Which means policymakers must see the above calls from the fossil fuel industry for what they are: simply an opportunistic attempt by fossil fuel interests to seize a moment of global instability to lower their costs, increase their profits, and expand oil and gas infrastructure with ramifications for years—decades—to come.
Committing to clean energy is the necessary move
Given the fallacy of the fossil fuel solution, our policymakers should stop hyper-focusing on fossil fuel production and instead take a full-field view of near- and long-term needs and opportunities, both at home and abroad. If they do, they will see the only truly robust forward course is the one that puts the accelerated transition to clean energy at its center.
That’s because the more clean energy we use, the less fossil fuels we use; the less fossil fuels we use, the more we have to export, the less exposed people are to the volatility of global energy markets, and the less the country is subjected to a realm of geopolitics that far too often forces the pursuit of at best least-bad, never outright good, diplomacy options.
Issuing robust vehicle, methane, power sector, industry, and building efficiency standards will help drive reductions in oil and gas use and beneficially shift sectors toward clean energy alternatives.
Additionally, passing policies now that invest in this pivot—in things like electrification, efficiency, renewable energy, electric vehicles, clean energy manufacturing, and industrial decarbonization—can mean real progress, and real change. Those policies have been drafted; those policies are ready for passage.
Finally, to safeguard against the transition to clean energy simply substituting one set of geopolitical vulnerabilities for another, policymakers must also continue to support the intentional build-out of our clean energy jobs, manufacturing, and supply chains.
These proactive policies must be coupled with necessary adjustments to social safety net provisions to directly ensure that the immediate costs and consequences of our present dependence on fossil fuels—and the many ways those costs and consequences flow throughout our economy—do not disproportionately burden low-income families.
The clean energy transition won’t happen overnight, but neither will a fossil fuel build-out on the scale fossil fuel interests are claiming they need—and only one of these approaches will actually invest in our future.
The correct forward course couldn’t be clearer; it’s time for policymakers to take it.