Energy myths: Ukraine, Biden, and the price of gas
Gas prices have jumped significantly, especially when compared to pandemic levels. Right now (March 11, 2022) the national average for a gallon of gas is above $4. So what’s causing the price jump? Will the Russian invasion of Ukraine make it worse? And is there anything we can do to stop it?
Is the Russian invasion of Ukraine causing gas prices to jump?
Yes.
The events in Ukraine definitely made a bad situation worse. Gas prices were already high because during the 2020 lockdown low demand made oil companies slow production. As restrictions lifted the demand has gone back up but the supply is still lower than it was and companies are struggling to get equipment and personnel to get back to pre-pandemic capacity.
When Russia invaded Ukraine it caused a major shock to the supply of oil to the E.U. Russia also supplies oil to the U.S.and this invasion has caused a market shortage causing prices to spike even higher.
Sources:
- The Wall Street Journal: Why Are Gasoline Prices So High? Ukraine-Russia War Sparks Price Increases Across U.S.
- US News & World Report: Surging Natural Gas Prices: Threat to Consumers This Winter?
Are we still getting oil from Russia?
No.
On Tuesday, March 8th, Biden announced that the US would ban Russian oil, natural gas, and other energy sources. Normally we import about 8% of our oil from Russia.
These sanctions were put in place as an effort to pressure Putin into ending his aggressions towards Ukraine.
Russia’s economy relies heavily on the money they make from oil exports. If Europe follows Biden and reduces their imports of Russian oil it will have a devastating impact on the Russian economy. Restrictions on where Russia can sell its oil will help to defund the war.
Sources:
Has the U.S. stopped producing oil and gas?
No.
The U.S. is producing less than we were before the pandemic due to a drop in demand. Production is slowly ramping back up. Oil companies say personnel and equipment problems have slowed them down.
Sources:
- Axios: Oil production to keep surging under Biden
- US News & World Report: Surging Natural Gas Prices: Threat to Consumers This Winter?
- Forbes: The U.S. Oil Supply Is Still Out Of Balance
Would the Keystone Pipeline have replaced the oil we were importing from Russia?
No.
Pipelines take years to build so we wouldn’t have been getting oil from it yet.
The oil that the pipeline would have carried is still being imported to the U.S. in other ways. The pipeline may not have increased the total amount imported.
Some of the oil from the pipeline was intended to be exported, so there’s no way to predict how much oil would have stayed stateside.
Source:
Are Biden’s policies boosting gas prices?
No. He’s actually helping to lower them.
Presidents have very little to do with short term rises in gas and oil prices. Most presidential policies affect future production of oil a few years down the line.
There are really only two ways a president can cause a sudden spike in gas prices:
Declare war on an oil producing country.
Increase gasoline taxes (it’s been 18.4 cents/gallon since 1993).
A president can also help lower gas prices in the short term by releasing crude oil from the Strategic Petroleum Reserve (SPR). Biden has promised to do this to help offset some of the price increases from Russia’s invasion of Ukraine.
Source:
Can clean energy reduce our dependence on foreign oil?
Yes.
Clean energy can be produced anywhere, so any country that uses a lot of clean energy will be less dependent on foreign oil.
Fmr. Navy Secretary Ray Mabus: “The way to fight Putin, in the long run, is to shift the world economy away from the oil and gas that keeps him affluent, armed and arrogant. . . . [W]e must also move swiftly to end the world’s addiction to fossil fuels.”
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