On Tuesday, President Joe Biden announced that the U.S. would ban imports of Russian oil and gas as the war in Ukraine rages on. The move could mean higher prices for Americans at the pump, which isn’t great for consumers—but it is good news for the American oil and gas industry, which is seeking to use the crisis to prop up its products at a time when we should be moving away from them.
The U.S. doesn’t actually buy a lot of Russian oil—only around 3% of crude imports were from Russia in 2021, compared to more than 60% from Canada. But despite being one of the world’s biggest exporters of oil and gas, the U.S. is also a pretty significant fossil fuel customer: In 2020, according to the Energy Information Administration, the U.S. imported about 5.9 million barrels per day of crude oil, while exporting 3.2 million barrels per day. That means that any shift in the global oil market is going to effect Americans—most noticeably at the pump. U.S. customers are already seeing a big impact from the invasion, after gas prices hit a record $4.173 a gallon Tuesday, blowing past a record last set in 2008.
“When one of the world’s biggest oil producers goes to war, prices are going to go up,” said Lorne Stockman, a director at Oil Change International.
Biden’s move to limit U.S. imports of Russian oil, therefore, may not be a massive financial burden for Russia in and of itself, but is mostly designed to send a signal to Putin. The European Union, which relies much more on fossil fuels from Russia than the U.S., hasn’t implemented an outright ban, but did release a plan on Tuesday intended to significantly slash imports this year and wean the continent off Russian oil, gas and coal before 2030.
“I think Putin has been counting on the fact that America still consumes a lot of oil and it’s worried about prices at the pump and the impact on the economy, that it wouldn’t do something like this,” Stockman said. “Even though America only imports a small amount from Russia, it’s still quite a strong symbolic move.”
Unfortunately for U.S. consumers, encouraging the world to shun Russian oil could have a months-long effect on what they see at the pump—especially in a world that was already grappling with high prices. GasBuddy, a company that monitors, collects, and projects gas price data, said in its 2022 forecast released earlier this year that it expects prices to reach their highest in May, and not fall below $4 a gallon until November. Cutting off Russian oil from this equation will likely only serve to juice up those prices.
Throughout the crisis in Ukraine, the American fossil fuel industry, whose shale boom over the past decade has helped to drive oil prices far lower than what we’re seeing now, has consistently positioned itself as the savior and solution to creating more dirty fuel at home—and hasn’t been shy about making its demands known. While drilling in the U.S. can increase (and is increasing) in response to higher global prices, Stockman pointed out that fully meeting the drop in supply caused by Russia being out of the picture is much more complicated than simply revving up American production.
The industry, Stockman says, tries to “portray the U.S.’s resources as kind of bottomless but of course, they’re not bottomless. We can only increase supply by so much—increasing production takes time, it doesn’t happen overnight. It takes months, if not at least a year, to actually really start making a difference.”
What’s more, many of the larger asks the industry is making—expanding federal leases, building pipelines and LNG export terminals—would not only be useless in alleviating the fuel crisis in the short term, but would also keep locking in the world to fossil fuel production for the coming years, helping to keep us hooked on a volatile commodity that we should have begun evolving away from years ago.
“The biggest thing we can do to try and remove this situation is to consume less,” Stockman said. “Supply is going to be tight for months and possibly even years to come because of this. We can’t just address this with more drilling or more supply from here or supply from there. We’ve got to take demand reduction seriously. And we haven’t been doing that for the last decade because we’ve had an oil boom that has sold us into a false sense of security.”