Biden Energy Policy Gave Putin The Green Light To Invade Ukraine

The White House' Assault On American Oil And Gas Left The US In A Weakened Diplomatic Position

February 24, 2022

After taking office in 2021, Biden paused new oil and gas leases for federal lands and waters while The US Department of Interior reviewed how the leasing program could be modified to fit the administration's climate goals. Biden's rapid reduction of US oil and gas production while increasing dependence on oil imports from Russia created the perfect storm providing Vladimir Putin the leverage he needed to hold over America's head. The administration's mad dash to implement Biden's climate change policy weakened US diplomacy.

Upon entering office, the Biden crew pummeled the US and North American oil production by blocking the Keystone XL Pipeline project, which would have contributed to US jobs in the construction, refining, and transportation sectors. Exploration and development auctions were frozen in the lower 48 states and offshore while Alaskan production was put on permanent hold.

The Biden Administration's plan is meant as a deterrence to restoring production levels achieved in 2019 under President Trump when the United States became a major exporter of crude oil and natural gas. The White House directed the newly appointed Federal Trade Commission Chair Lena Khan to "review merger and acquisitions, monitor industry prices, investigate market manipulation, and anti-competition practices" in the US oil industry. Looming regulatory action, threats of antitrust sanctions, and pressure put on financial institutions to exit the fossil fuel credit markets resulted in a US oil market freeze that remains 15 percent below previous levels pre-pandemic.

European dependence on the heavily polluting Russian extraction industry received a boost when Biden backed off on attempts to derail the Nord Stream pipeline into Germany. At the same time, the administration sought to subdue the US liquefied natural gas producers who had hoped to build capacity to supply Europeans absent the deal with Russia. In 2019, the Trump administration imposed sanctions on those involved in laying the pipeline arguing that Nord Stream 2 is a tool for Russia to support aggression against Ukraine.

Biden's intent to fast-track his climate change agenda in August 2021 added more insult to pandemic injury. Amid high demand in fast recovering economies, Biden implored OPEC and Russia to increase their production to make up for the shortfalls caused by the pandemic. In early 2020, those same producers flooded declining markets, which openly revealed their intention to destroy US shale oil production economically. Biden's assault on US oil and gas resulted in an 11% increase in Russian oil imports, the largest in a decade.

US imports of crude oil from OPEC nearly doubled from levels before the pandemic, and overall imports have reached levels not seen in years. Rising gasoline prices returned US polling data showing heightened public concern about inflation, which, undoubtedly, prompted the administration's request. Saudi Arabia declined to increase production in August 2021 and again in February 2022. Biden's displeasure with Saudi Arabia's refusal to increase oil production was apparent in his comments at a CNN town hall, "There's a lot of Middle Eastern folks who want to talk to me. I'm not sure I'm going to talk to them," he said.

Since the U.S. is no longer the primary driver of oil prices, as it had been for much of the past decade, Biden has limited options to negotiate with Russia over Ukraine. Avi Salzman reports in Barrons:

A surge in US oil production since 2008, and a decline in oil imports, had given the US more negotiating power with foreign countries over the past decade. Petroleum imports steadily declined to about eight million barrels a day last year from nearly 14 million a day in 2005. More of the oil and refined products that Americans use now come from Canada. In 2008, OPEC accounted for almost half of US petroleum imports, but its share fell to 11% in 2020, with Canada accounting for 52%.

A recent article in The Houston Chronicle by Chris Tomlinson unearthed historic warnings about the national security issues surrounding the US' dependency on foreign oil. "Former President Dwight Eisenhower first called on the US to reduce reliance on foreign oil in 1956, when Arab nations embargoed oil to protest the invasion of Egypt by Israel, Britain, and France. Arab countries used oil as a weapon again in 1967, 1973, and 1979. The United States has never managed to become self-sufficient in oil. First, crude is an international commodity. Our refineries and production are intertwined in the global market. Second, we don't have enough crude reserves to meet our current needs."

In November 2021, a federal judge in Louisiana sided with the state and Republican attorneys general from 12 states ordering the lease sales to move forward. However, in January 2022, US District Judge Rudolph Contreras of the District of Columbia threw out the largest sale of drilling rights in US history. The decision landed a victory for Friends of the Earth, Healthy Gulf, Sierra Club, and Center for Biological Diversity who challenged the sale. In his written decision, Contreras cited what he said was a botched environmental analysis during the Trump Administration that failed to consider the leases' effect on 'foreign' oil consumption.

Frank Macchiarola, the senior vice president for economics and regulatory affairs at the American Petroleum Institute said, "This ruling is another example of increased policy and legal uncertainty. It jeopardizes the future of American energy leadership and creates greater dependence on foreign energy and higher emissions."

House Natural Resources Chairman (AZ-D) Raúl Grijalva said Contreras was correct to require a stricter environmental consideration. "This decision is a welcome chance to reset our federal fossil fuel leasing policies and limit carbon emissions while there is still time to prevent the most disastrous outcomes of climate change."

Grijalva's elation is no surprise, given his history of harassing opponents of the radical climate change agenda. A 2015 Wall Street Journal report "The Alinsky Way of Governing: What happens when those in power adopt 'rules for radicals' to attack their less powerful opponents" highlights his combative approach. [To get results Grijalva, once sent] "letters to seven university presidents seeking background information on scientists and professors who had given congressional testimony that failed to endorse Democrats climate change policy." Grijalva also called for a national holiday to honor Venezuela's former socialist dictator Hugh Chavez.

Biden's and Democrats' policy sabotaged American energy while strengthening Putin and weakening US diplomacy. Gas prices are at their highest level in seven years. The United States was energy independent under Trump, with oil priced around $50-60/barrel, whereas today, oil is fast approaching $100 a barrel. Recent polling data shows public concerns over higher gas prices which presents a major problem for Democrats seeking reelection. To ease the fallout, the White House and top Democratic lawmakers are reportedly considering a federal gas tax holiday.

Unfortunately, Biden created the perfect storm with a failing energy policy that aids Russia and allows Putin to fund his war with Ukraine. If Americans find out that the Biden administration could have avoided Ukraine by keeping America's energy independent, Democrat's 2020 midterm prospects will be bleak at best.

Statement from the Russian Ministry of Foreign Affairs

We see that blackmail, intimidation, and threats are the only tools the American policy has in its arsenal, trapped as it is in the stereotypes of a uni-polar world and a false certainty that the United States still has the right and can impose its own global rules on everyone.

Make no mistake, we will respond strongly to these sanctions, not necessarily in a symmetrical manner, but the response will be well calibrated and will not fail to affect the United States.