Already facing political blowback because of surging gas prices, President Biden announced a ban on Russian oil and gas imports in retaliation for Russia’s invasion of Ukraine. What else he said about untapped US oil production capability may be more telling.
Biden imposed the ban in response to growing congressional pressure from Republicans and Democrats to take the unilateral action. The United States imports relatively little Russian oil and gas compared to European nations. Britain, for example, is delaying a Russian oil ban until the end of 2022 to give its businesses time to find alternative suppliers.
Biden acknowledged the US ban would unavoidably add stress to markets and push up gas prices further. He pledged to do all he could to mitigate higher prices at the pump, which have already reached near-record highs when adjusted for inflation.
“The decision today is not without cost here at home,” Biden said. “Putin’s war is already hurting American families at the gas pump. Since Putin began his military build-up at Ukrainian borders, the price of gas at the pump in America went up 75 cents and with this action it’s going to go up further. I’m going to do everything I can to minimize Putin’s price hike here at home.”
Administration officials are focused on increasing oil and gas supplies by urging Saudi Arabia to increase production and exploring options with Venezuela and Iran, oil-producing nations under current US economic sanctions. Biden also has released oil from the national strategic reserve.
However, Biden rejected calls from mostly Republican lawmakers to scrap his green energy initiatives. He said the United States and the rest of the world needs to wean themselves off oil to combat climate change and prevent energy extortion by nations like Russia. Shifting to electric vehicles and renewable energy can lead to 21st century jobs and business opportunities, according to Biden.
Then Biden became more specific about domestic oil production. He noted 90 percent of oil-producing land in the United States is privately owned and is not subject to government leases or production limits. He also noted there are undeveloped oil fields already under lease that could expand domestic production. Biden warned oil companies to avoid profiteering.
“To the oil and gas companies and to the finance firms that back them: We understand Putin’s war against the people of Ukraine is causing prices to rise. We get that. That’s self-evident,” Biden said. “But it’s no excuse for excessive price increases or padding profits to exploit this situation or American consumers. Russia’s aggression is costing us all. And it’s no time for profiteering or price gouging.”
Biden’s action comes in the form of an executive order exercising his authority under the International Emergency Economic Powers Act and the National Emergencies Act. Here is the specific language of the ban:
I have prohibited the following: (i) the importation into the United States of the following products of Russian Federation origin: crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products; (ii) new investment in the energy sector in the Russian Federation by a United States person, wherever located; and (iii) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.
The decision today is not without cost here at home. Putin’s war is already hurting American families at the gas pump.
Congress is expected to go ahead with legislation with bipartisan support. House Speaker Nancy Pelosi hinted at legislation that goes beyond authorizing the Russian oil ban. In a letter to House members, Pelosi said the House bill will review Russia’s access to the World Trade Organization and reauthorize and strengthen the Global Magnitsky Human Rights Accountability Act, which could open the door to further US-imposed sanctions.
In his comments, Biden said sanctions are already taking a bite out of the Russian economy and the pocketbooks of oligarchs. He praised US companies for withdrawing from Russia, saying, “The private sector is united against Russia’s vicious war of choice”. The President added, “One ruble is worth less than one American penny”.