President Biden’s announcement that the United States will ban imports of Russian oil caused the price of crude to surge on Tuesday morning. However, the pain that Americans are set to feel at the gas pump could eventually be offset if Congress were to pass Biden’s Build Back Better agenda, a new study finds.
An analysis released Tuesday by the nonpartisan think tank Energy Innovation finds that the climate change provisions of Biden’s now-defunct proposal, such as tax credits for buying new electric vehicles, would have reduced U.S. oil consumption by 2025 by half of the roughly 200,000 barrels of crude oil from Russia per day that the U.S. imported last year. By 2027, the U.S. would have cut oil consumption by more than it was importing from Russia and by 2030, the U.S. would have cut oil consumption by more than double its Russian imports.
“As long as long as we are dependent on an international energy commodity like oil, whose prices are based on the actions of all producers in the world, whether it's Russia or OPEC or the U.S., we're never going to be energy secure,” Robbie Orvis, senior director of energy policy design at Energy Innovation and the author of the report, told Yahoo News. “The only robust, long-term way to be energy secure is to eliminate demand for fossil fuels. The provisions on the table right now would really kind of kick-start that transition.”
Sen. Ed Markey, D-Mass., who co-sponsored the Green New Deal legislation, issued a statement on Tuesday calling for the Russian oil import ban to be made permanent and to pass the climate portion of Build Back Better, which would spend $555 billion over 10 years on everything from tax credits for buying solar panels, to incentives for manufacturing longer-lasting solar batteries and small modular nuclear reactors.
“By enacting a clean energy revolution, we can break our addiction to dirty oil and gas, and permanently shut off the money pipeline to Putin and other oil oligarchs,” Markey said to Yahoo News, in a separate statement sent by his spokesperson. “We have broad agreement on the need for $555 billion in climate and clean energy investments as part of our economic and infrastructure agenda, and now is our moment to deliver on it, as we continue to work towards passing a Green New Deal.”
Build Back Better, after being passed by the House of Representatives, has been stuck in the Senate, where unified Republican opposition and the reluctance of Sen. Joe Manchin, D-W.Va., have blocked its passage since last fall. The Biden administration has not specifically tied the Russia-Ukraine war to a call to revive the package.
In Biden’s State of the Union address last Tuesday, he avoided using the phrase “Build Back Better.” He called on Congress to pass its various components, including the clean energy spending and social spending priorities, such as subsidies for the cost of child care, but he did not tie them to the war in Ukraine. The next day, Manchin told Politico that he would support a slimmed-down version of the agenda that dropped the social spending but kept the climate change provisions.
But the administration is rejecting the arguments of conservative politicians and pundits who say the war demonstrates the need for a long-term increase in domestic fossil fuel production, countering that it instead underscores the importance of getting off fossil fuels altogether.
“In the long run, the way to avoid high gas prices is to speed up — not slow down — our transition to a clean energy future,” the White House wrote in a fact sheet that accompanied Tuesday’s announcement. “We cannot drill our way out of dependence on a global commodity controlled in part by foreign nations and their leaders, including [Russian President Vladimir] Putin. The only way to eliminate Putin’s and every other producing country’s ability to use oil as an economic weapon, is to reduce our dependency on oil. So, even as President Biden does everything in his power in the short term to make sure we can readily access the oil and gas necessary to protect American consumers and allied countries — including through greater U.S. domestic production that is expected to hit record highs next year — this crisis reinforces our resolve to make America truly energy independent, which means reducing our dependence on fossil fuels.”
In response to Russia’s Feb. 24 invasion of Ukraine, the price of Brent crude oil increased from roughly $99 per barrel on Feb. 28 to $118 on March 4, and it has continued to rise since then. On Tuesday morning, Brent crude prices shot up 7.7 percent, to $132.75, in response to Biden’s executive order banning Russian oil imports.
Although Biden’s order applies to coal and natural gas as well, the U.S. does not import significant amounts of coal or gas from Russia. However, Energy Innovation also estimates that Biden’s Build Back Better agenda would reduce U.S. natural gas consumption by 4.7 trillion cubic feet per year by 2030, which is equivalent to 85 percent of the gas that Europe imports from Russia.
Of course, even an accelerated transition to electric vehicles and home heating systems won’t reduce oil or gas prices in the coming months. But, Energy Innovation points out, neither will issuing permits for new oil and gas pipelines or selling new oil and gas drilling leases on federal land, as congressional Republicans and the oil and gas industry have demanded.
“At this point, nearly all solutions being discussed are long-term solutions, including significant increased production of fossil fuels and large technological shifts,” the Energy Innovation report states. “For example, there is very limited potential to significantly increase U.S. oil supply in the near term according to the industry itself, which cites at least a two-to-three-year timeline to grow production significantly.”
Lobbyists from environmental advocacy organizations say they hope that the oil and gas supply disruptions caused by Russia’s invasion of Ukraine will help motivate the Senate to pass the climate provisions of Build Back Better. “I don’t think it will be called [Build Back Better], and I think it will look and be different from the House-passed bill that we strongly supported,” Tiernan Sittenfeld, senior vice president for government affairs at the League of Conservation Voters, told Yahoo News. “But we remain cautiously optimistic that Congress will make transformative progress that will keep us on track to meet the test of cutting climate pollution in half by 2030, which is the goal that science and justice demand. I’m having a lot of conversations across the House and the Senate and the administration, and I am definitely feeling that there is a real determination to meet this moment on climate.”
“Obviously, there’s been the devastating impacts of the climate crisis, but also Putin’s war on Ukraine shows just how dangerous it is to be dependent on dirty fossil fuels — and that we really do need to double down on clean, renewable energy,” Sittenfeld added. “So, we fervently hope and absolutely expect that Congress will get the job done.”
“The kind of geopolitical turmoil that surrounds fossil fuels points out again the need to move away from fossil fuels,” Melinda Pierce, legislative director of the Sierra Club, told Yahoo News. “I do think the U.S. Senate could produce something in an April-May timeframe.”
The prospects on Capitol Hill nonetheless remain unclear. Yahoo News reached out to Manchin and the other recalcitrant Senate Democrat, Kirsten Sinema of Arizona, as well as several Republican members of the Bipartisan Senate Climate Solutions Caucus, but none responded. The White House declined to comment.
The environmental movement will meanwhile continue to argue that the oil price shocks show that the country cannot wait any longer to make its transition to cleaner sources of energy. “We've got to get going, and we should have done this yesterday,” Pierce said.