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      Biden implores US oil companies to pass on record profits to consumers

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      Biden implores US oil companies to pass on record profits to consumersPresident announces release of 15m barrels of oil from strategic reserve as he fights to keep gas prices in check before midterms Joe Biden has called on oil companies to pass on their massive profits to consumers as he announced the release of 15m barrels of oil from the US strategic petroleum reserve.Biden is fighting to keep gas prices in check ahead of November’s midterms. He blamed Vladimir Putin’s invasion of Ukraine for the global spike in oil prices and said his administration was doing all it could to keep prices in check.“Gas prices have fallen every day in the last week,” said Biden. “That’s progress, but they’re not falling fast enough. Gas prices are felt in almost every family in this country. That’s why I’ve been doing everything in my power to reduce gas prices.”He called on US oil companies to help. In the second quarter of 2022, the six largest US oil companies reported profits of $70bn, said Biden.“So far, American oil companies are using that windfall to buy back their own stock, passing that money on to shareholders, not consumers,” he said. “My message to all companies is this: you’re sitting on record profits. And we’re giving you more certainty. You can act now to increase oil production. You should not be using your profits to buy back stock or for dividends – not while the war is raging.”The announcement of the latest oil release speeds up the sale of the last of the 180m barrels that Biden announced in March would be sold. The announcement comes after the oil-producing Opec+ nations said they would cut oil production, driving up prices, in a move that angered White House officials.Established in 1975 to help mitigate shocks in US oil supply, the strategic petroleum reserve (SPR) is thought to be the largest emergency supply in the world. Stored in underground tanks in Louisiana and Texas, the SPR has capacity for 714m barrels of oil and is currently at its lowest level since 1984.The reserve now contains roughly 400m barrels of oil and Biden said more oil could be released if the situation does not improve. The administration has called the situation a “bridge” until domestic production can be increased and said the US will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel.Biden faces political headwinds because of gas prices. AAA reports that gas is averaging $3.87 a gallon, down slightly over the past week, but up from a month ago. The recent increase in prices stalled the momentum that the president and his fellow Democrats had been seeing in the polls ahead of the November elections.An analysis Monday by ClearView Energy Partners, an independent energy research firm in Washington, suggested that two states that could decide control of the evenly split Senate, Nevada and Pennsylvania, are sensitive to energy prices. The analysis noted that gas prices over the past month rose above the national average in 18 states, which are home to 29 potentially “at risk” House seats.The hard math for Biden is that oil production has yet to return to its pre-pandemic level of roughly 13m barrels a day. It’s about a million barrels a day shy of that level. The 15m-barrel release would not cover even one full day’s use of oil in the US, according to the Energy Information Administration.The oil industry would like the administration to open up more federal lands for drilling, approve pipeline construction and reverse its recent changes to raise corporate taxes. The administration counters that the oil industry is sitting on thousands of unused federal leases and says new permits would take years to produce oil with no impact on current gas prices.Environmental groups, meanwhile, have asked Biden to keep a campaign promise to block new drilling on federal lands.Because fossil fuels lead to carbon emissions, Biden has sought to move away from them entirely with a commitment to zero emissions by 2050. When discussing that commitment nearly a year ago after the G20 leading rich and developing nations met in Rome, the president said he still wanted to also lower gas prices because at “$3.35 a gallon, it has a profound impact on working-class families just to get back and forth to work”.The Associated Press contributed to this storyTopicsJoe BidenBiden administrationOilOpecCommoditiesUS midterm elections 2022US politicsnewsReuse this content More

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      Democrat senators call for a freeze on arms sales to Saudi Arabia amid oil production cuts – video

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      Two Democrat senators have called for a freeze on arms sales to Saudi Arabia unless it reverses a Riyadh-led Opec+ decision to cut oil production. They said the decision to reduce production would help Russia’s war in Ukraine. 
      ‘The only apparent purpose of this cut in oil supplies is to help the Russians and harm Americans. It was unprovoked and unforced, as an error,’ the Connecticut senator, Richard Blumenthal, said. His statement was echoed by his Democrat colleague from California, Ro Khanna, who said: ‘When Americans are facing a crisis because of Putin, when we’re paying more at the pump, our ally, someone who we have helped for decades, should be trying to help the American people.’
      The Biden administration said it was reviewing its ties with the Gulf kingdom. 
      Speaking to CNN, however, a Saudi minister, Adel al-Jubeir, said: ‘Saudi Arabia does not politicise oil. We don’t see oil as a weapon. We see oil as our commodity. Our objective is to bring stability to the oil market.’ Riyadh is not partnering with Russia, he added

      Democrats issue fresh ultimatum to Saudi Arabia over oil production More

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      Schumer and Manchin’s ‘dirty side deal’ to fast-track pipelines faces backlash

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      Schumer and Manchin’s ‘dirty side deal’ to fast-track pipelines faces backlashScientists and environmental groups call proposed legislation a ‘giveaway’ to fossil fuel industry that will gut protections Scientists, health experts and environmental groups have condemned new legislation negotiated in secret by the fossil-fuel-friendly Democratic senator Joe Manchin and the Senate leader, Chuck Schumer, which will fast-track major energy projects by gutting clean water and environmental protections.Senator Joe Manchin unveils bill that would expedite federal energy projectsRead moreThe permitting bill published on Wednesday was the result of a deal between Manchin and Democratic leaders, which secured the West Virginia senator’s vote for Joe Biden’s historic climate legislation, the Inflation Reduction Act, which Manchin held up for months.The bill mandates all permits for the Mountain Valley pipeline (MVP), a project long delayed by environmental violations and judicial rulings, be issued within 30 days of passage and strips away virtually any scope for judicial review.Democratic leaders want to push through Manchin’s bill without debate or analysis, and are expected to attach the legislation to a funding measure Congress must pass before 1 October.Energy industry associations have widely welcomed the reforms but opposition from Democrats and Republicans could scupper the deal.Critics say the bill is a giveaway to the fossil fuel lobby, paving the way for oil and gas production that will stop the US meeting its obligations to cut greenhouse gases and lead to further environmental injustices for people of color, Indigenous communities and low-income areas. It slashes judicial and state powers and oversight, handing Washington greater control over major projects.“This is not permitting reform,” said the Greenpeace USA co-executive director Ebony Twilley Martin. “This is permitting a giveaway that benefits those who continue to line their pockets at the expense of those affected by climate disasters. Our country cannot afford any new oil, gas or coal projects if we’re going to avoid climate catastrophe.”On Thursday, more than 400 scientists, doctors and nurses delivered a letter imploring Schumer and the House speaker, Nancy Pelosi, to reject the deal. “The scientific consensus is now crystal clear … fossil fuel projects carry enormous risks to public health … we need to leave oil, gas and coal in the ground and turn off the spigot of carbon pouring into the air.”Jennifer K Falcon, an Indigenous environmentalist from the Ikiya Collective, said: “Our communities have already lost so much from environmental racism but there is so much to save. [They] are not sacrifice zones for corrupt politicians like Manchin and Schumer who benefit from big oil’s windfall profits.“The science is clear about the worsening climate crisis. We have no time to waste on dirty side deals.”Manchin has received more campaign contributions from fossil fuel industries than any other lawmaker this election cycle, according to Open Secrets.The legislative side deal requires Biden to designate at least 25 energy projects of strategic national importance for federal review within 90 days of passage. The projects must include at least five that produce, process, transport or store fossil fuels or biofuels, as well as six that are not fossil fuels and four mining projects.The bill mandates a two-year limit on environmental reviews for major projects – regardless of their complexity and potential for harming the environment, water supplies and human health.According to Brett Hartl, government affairs director at the Center for Biological Diversity, the bill contains the most significant loss of protections under the bedrock National Environmental Policy Act (Nepa) and the Clean Water Act since at least the last Bush administration, when Republicans had full control of Congress.“Any member of Congress who claims this disastrous legislation is vital for ramping up renewables either doesn’t understand or is ignoring the enormous fossil fuel giveaways at stake,” Hartl said.The bill was negotiated under a cloak of secrecy. Passage through the Senate is far from assured. A small group of progressive Democrats are looking to separate Manchin’s legislation from the stopgap funding bill, so they can vote against the permitting bill without voting to shut down the government.Senator Jeff Merkley of Oregon has organised a letter to Schumer, with the support of Tammy Duckworth of Illinois, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont – a move that mirrors a similar plea by 77 House progressives earlier this month.The letter, which was leaked to Politico, states: “We have heard extensive concerns from the environmental justice community regarding the proposed permitting reforms and are writing to convey the importance of those concerns, and to let you know that we share them.”On Tuesday, Schumer said he planned to add permitting reform to the spending bill and “get it done”.But Republicans who want more radical regulatory and permitting reforms may also vote against the bill, which requires 60 votes to move to the House. Earlier this month, 46 Republicans signed on to an alternative permitting bill introduced by the other West Virginian senator, Shelley Moore Capito.Schumer’s decision to capitulate to Manchin has angered progressives.Manchin agreed to back his party’s historic climate legislation before the midterm elections but only after negotiating a side deal to fast-track the MVP, a shale gas pipeline which would stretch 303 miles across the Appalachian mountains from north-western West Virginia to southern Virginia.Before construction was suspended, the MVP had produced more than 350 water quality violations. Manchin’s bill exempts the MVP from the Endangered Species Act, which experts say will push two species – the Roanoke logperch and the candy darter – much closer toward extinction.On Wednesday, the Democratic senator Tim Kaine, of Virginia, said he could not support the “highly unusual provisions” regarding the MVP which “eliminate any judicial review”. Kaine said he had been excluded from talks, even though 100 miles of the pipeline would run through his state.Raúl Grijalva, chair of the House natural resources committee, said: “These dangerous permitting shortcuts have been on industry wishlists for years. And now they’ve added the Mountain Valley pipeline approval as the rotten cherry on top of the pile.“The very fact that this fossil fuel brainchild is being force-fed into must-pass government funding speaks to its unpopularity. My colleagues and I don’t want this. The communities that are already hit hardest by the fossil fuel industry’s messes certainly don’t want or deserve this. Even Republicans don’t want this. Right now, our focus should be on keeping the government open, not destructive, unrelated riders.”In favor of the bill Gregory Wetstone, chief executive of the American Council on Renewable Energy, said it “includes provisions that will help streamline the transmission approval process, improving our ability to meet our nation’s decarbonisation goals”.Heather Zichal, chief executive of the American Clean Power Association, said: “Our current permitting system is overly cumbersome and mired in delays, hamstringing our ability to grow the clean energy economy.”TopicsUS SenateFossil fuelsOil (Environment)Gas (Environment)Oil (Business)Gas (Business)Joe ManchinnewsReuse this content More

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      Criticism intensifies after big oil admits ‘gaslighting’ public over green aims

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      Criticism intensifies after big oil admits ‘gaslighting’ public over green aimsFury as ‘explosive’ files reveal largest oil companies contradicted public statements and wished bedbugs upon critical activists Criticism in the US of the oil industry’s obfuscation over the climate crisis is intensifying after internal documents showed companies attempted to distance themselves from agreed climate goals, admitted “gaslighting” the public over purported efforts to go green, and even wished critical activists be infested by bedbugs.The communications were unveiled as part of a congressional hearing held in Washington DC, where an investigation into the role of fossil fuels in driving the climate crisis produced documents obtained from the oil giants ExxonMobil, Chevron, Shell and BP.“First they ignore you, then they laugh at you, then they wish bedbugs on you, then you win,” said Varshini Prakash, executive director of Sunrise. The organization accused Shell of a “legacy of violence and of ignoring the wellbeing of communities across the globe”.Pakistan floods ‘made up to 50% worse by global heating’Read moreThe revelations are part of the third hearing held by the House committee on oversight and reform on how the fossil-fuel industry sought to hamper the effort to address the climate crisis. Democrats, who lead the committee, called top executives from the oil companies to testify last year, in which they denied they had misled the public.The new documents are “the latest evidence that oil giants keep lying about their commitments to help solve the climate crisis and should never be trusted by policymakers”, said Richard Wiles, president of the Center for Climate Integrity.“If there is one thing consistent about the oil and gas majors’ position on climate, it’s their utter inability to tell the truth,” Wiles added.Ro Khanna, co-chair of the committee, said the new documents are “explosive” and show a “culture of intense disrespect” to climate activists. The oil giants’ “climate pledges rely on unproven technology, accounting gimmicks and misleading language to hide the reality,” he added. “Big oil executives are laughing at the people trying to protect our planet while they knowingly work to destroy it.”Several of the emails and memos within the released trove of documents appear to show executives, staffers and lobbyists internally contradicting public pronouncements by their companies to act on lowering planet-heating emissions.Exxon, which recently announced profits of $17.9bn for the three months until June, more than three times what it earned in the same quarter a year ago, has publicly said it is “committed” to the Paris climate agreement to curb global heating.However, the documents released by the Democratic-led House committee include an August 2019 memo by an executive to Darren Woods, Exxon’s chief executive, on the need to “remove reference to Paris agreement” from an announcement by an industry lobby group that Exxon is a member of.Such a statement “could create a potential commitment to advocate on the Paris agreement goals”, the executive warned. A separate note on a 2018 Exxon presentation also admitted that biofuels derived from algae was still “decades away from the scale we need”, despite the company long promoting it as a way to lower emissions.Shell, meanwhile, has committed to becoming a “net zero” emissions business by 2050, and yet the documents show a private 2020 communication in which employees are urged to never “imply, suggest, or leave it open for possible misinterpretation that (net zero) is a Shell goal or target”. Shell has “no immediate plans to move to a net-zero emissions portfolio” over the next 10 to 20 years, it added.A Shell tweet posted in 2020 asking others what they could do to reduce emissions resulted in a torrent of ridicule from Twitter users. A communications executive for the company wrote privately that criticism that the tweet was “gaslighting” the public was “not totally without merit” and that the tweet was “pretty tone deaf”. He added: “We are, after all, in a tweet like this implying others need to sacrifice without focusing on ourselves.”The UK-headquartered oil company, which in July announced a record $11.5bn quarterly profit, also poured scorn on climate activists, with a communications specialist at the company emailing in 2019 that he wished “bedbugs” upon the Sunrise Movement, a youth-led US climate group.Previous releases of internal documents have shown that the oil industry knew of the devastating impact of climate change but chose instead to downplay and even deny these findings publicly in order to maintain their business model.The hearings have been attacked by Republicans as a method to “wage war on America’s energy producers” and the oil companies involved have complained that the documents don’t show the full picture of their stance on the climate crisis.Exxon supports the 2015 Paris climate deal, a spokesman said, claiming that the “selective publication of dated emails, without context, is a deliberate attempt to generate a narrative that does not reflect the commitment of ExxonMobil and its employees, to address climate change and play a leading role in the transition to a net-zero future.”A Shell spokesman, meanwhile, said the committee chose to highlight only a small handful of the nearly half a million pages it provided to the body on its “extensive efforts” to take part in the energy transition.“Within that pursuit are challenging internal and external discussions that signal Shell’s intent to form partnerships and share pathways we deem critical to becoming a net-zero energy business,” he said.TopicsClimate crisisUS politicsFossil fuelsOilnewsReuse this content More

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      Big Oil V the World review – how can these climate crisis deniers sleep at night?

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      Big Oil V the World review – how can these climate crisis deniers sleep at night?This shocking documentary series reveals the lies oil lobbyists told to undercut democracy, prevent action against global heating – and bring our planet to the brink Al Gore described it as “in many ways the most serious crime of the post-world war two era, whose consequences are almost unimaginable”. Can you guess which one the former vice-president meant? Genocide in the former Yugoslavia? Genocide in Rwanda? The attack on the twin towers? The oxymoronic “war on terror” that produced – rather than eliminated – terrorism? The nuclear arms race? The invasion of Ukraine? The crimes of Stalin, Mao, or Pol Pot? Or other ones I haven’t the space to cite?Gore is in fact referring to a very specific moment that occurred on 25 July 1997. That day, the US Senate voted by 95-0 for the Byrd-Hagel Resolution, ruling that the US should not sign a climate treaty that would become known as the Kyoto protocol – despite the Clinton administration’s desire for the US to be a world leader in the fight to cut greenhouse gas emissions. It meant that Clinton would only be allowed to take action when developing countries – particularly India and China – were bound by the same strictures.‘What we now know … they lied’: how big oil companies betrayed us allRead moreThe worry, touted by purported experts (many of whom were briefed and funded by US oil companies), was that Kyoto would be a disaster for the US. Imposing strict emission controls on the US – while industrialising nations such as India and China were not similarly constrained – would cost the US upwards of 5,000 jobs, put more than 50 cents on a tank of gas, whack up electricity bills 25% to 50% and put the struggling US economy at a competitive disadvantage in international markets. Or so it was claimed.Jane McMullen’s excellent and shocking first instalment of a three-part series, Big Oil V The World (BBC Two) reveals another reason for senators Robert Byrd and Chuck Hagel’s resolution. For many years, the big oil lobby had poured scorn on the growing scientific orthodoxy that humanity is hurtling towards a climate catastrophe and that the leading reason is the rise in emissions of greenhouse gases.What I didn’t know, and this documentary helpfully explains, is that the US’s largest oil company, Exxon, had labs filled with researchers who had produced detailed reports showing the reality of the climate crisis. That research, though, was suppressed.The bitter irony, clinched by one of the company’s former climate scientists, Ed Garvey, was that Exxon could have been part of the solution rather than the problem. Garvey worked on Exxon’s carbon dioxide research programme from 1978 to 1983, when it was closed because falling gas prices made it seem an expendable luxury.Garvey also recalls that there were scientists at Exxon developing alternatives to fossil fuels such as solar power and lithium batteries. But their work was shelved. The future of the planet, Garvey suggests, was deemed less important than Exxon’s short-term profit.Although the Clinton administration in which Gore served had from the outset committed itself to reducing greenhouse gas emissions to their 1990 levels by 2000, and leaders of industrial nations such as the British prime minister, John Major, called for even deeper cuts, the Senate resolution effectively destroyed the president and his vice-president’s hopes of the US leading the world. Instead, the US, through its inaction, helped hasten the climate catastrophe we now live in.To clinch this rhetorical point, the programme repeatedly cuts from talking heads to scenes more hellish than those imagined by Dante or Milton. Floods in China, a fiery hellscape in California, storms lashing Louisiana and, in one shot, battering an Exxon gas station.After seeing such images, I wonder how Hagel, who sponsored that 1997 Senate resolution and went on to become defence secretary, sleeps at night. He was among the climate crisis deniers this documentary catches up with to hear them repent. Off-screen, the excellent interviewer asks Hagel if he feels he was misled, given that Exxon, whose execs lobbied him before the Senate vote, was making a concerted effort throughout the 1990s to cast doubt on the reality of the climate emergency and the role of human activity in increasing global temperatures – even though their own scientists were telling them that the science was sound.“We now know about some of these large oil companies … they lied,” says Hagel. “Yes I was misled. Others were misled. When they had evidence in their own institutions that countered what they were saying publicly – they lied.” If the truth had been told to Hagel and other climate crisis-denying senators, would the situation be different? “Oh absolutely,” says Hagel. “I think it would have changed the average citizen’s appreciation of climate change and mine. It would have put the United States and the world on a different track. It has cost this country and it’s cost the world.”Last August, the UN secretary general António Guterres said the Intergovernmental Panel on Climate Change (IPCC) working group’s report confirming the link between human activity and rising greenhouse emissions is “a code red for humanity”. That Senate resolution, McMullen’s film argues, contributed to our climate emergency.No one in this programme explores the hideous political ramifications of this terrible state of affairs, namely that the virus of capitalism (in the form of big oil) undercut democracy through a sustained campaign of disinformation. How easy it proved for corporations to sucker politicians such as Hagel to subvert not just the will of the people but the wellbeing of the planet. If McMullen’s film has a moral, it’s that democracy must be healthy enough to resist commercial lobbying, so that we don’t get fooled again. In 2022, that seems an unlikely scenario.TopicsTelevision & radioTV reviewTelevisionDocumentaryClimate crisisFactual TVOilOil and gas companiesreviewsReuse this content More

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      Environmentalists condemn Biden administration’s offshore drilling plan

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      Environmentalists condemn Biden administration’s offshore drilling planPolicy would ban new ocean drilling but allow up to 11 lease sales in Gulf of Mexico and Alaska’s south coast Joe Biden’s administration on Friday unveiled a five-year offshore oil and gas drilling development plan that blocks all new drilling in the Atlantic and Pacific Oceans within US territorial waters while allowing some lease sales in the Gulf of Mexico and Alaska’s south coast.The plan, which has not been finalized, could allow up to 11 lease sales but gives the interior department the right to make none. It comes two days after the US supreme court curbed the power of the Environmental Protection Agency to respond to the climate crisis.Environmental groups criticized the plan, and some expressed concern that the administration was backing away from the president’s “no more drilling” pledge during a March 2020 one-on-one debate with Bernie Sanders.Biden at the time said, “No more drilling on federal lands, no more drilling, including offshore – no ability for the oil industry to continue to drill – period.”Environmental groups also argued that new leasing would impede the Biden administration’s goal to cut carbon emissions by at least 50% by 2030 in an effort to keep global heating under the threshold of 1.5C (2.7F).“President Biden campaigned on climate leadership, but he seems poised to let us down at the worst possible moment,” said Brady Bradshaw, senior oceans campaigner at the Center for Biological Diversity. “The reckless approval of yet more offshore drilling would mean more oil spills, more dead wildlife and more polluted communities. We need a five-year plan with no new leases.”Wenonah Hauter of Food & Water Watch said: “President Biden has called the climate crisis the existential threat of our time, but the administration continues to pursue policies that will only make it worse.”On Friday, the interior secretary, Deb Haaland, said she and the president “had made clear our commitment to transition to a clean energy economy”. The department’s proposal, she said, was “an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing”.California passes first sweeping US law to reduce single-use plasticRead moreThe proposal to sell off 11 leases must go through a series of reviews and a period of public comment that is likely to be contentious. Most of the new leases would be offered in parts of the western and central Gulf of Mexico, far from where legislators have outlawed new drilling near Florida.The executive director of Healthy Gulf, Cyn Sarthou, said the organization was troubled by the apparent change of policy.“Now is not the time to continue business as usual,” Sarthou said. “The continuing threat posed by climate change requires the nation to focus on a transition to renewable energy.”Nearly 95% of US offshore oil production and 71% of offshore natural gas production occurs in the Gulf of Mexico, according to the Natural Resources Defense Council. About 15% of oil production comes from offshore drilling.The proposed leases come after sales in two regions of the Gulf were abandoned because of legal challenges.Advocates for the oil industry welcomed the new proposal, including the Democratic senator Joe Manchin of West Virginia.“Our allies across the free world are in desperate need of American oil and gas,” Manchin said in a statement. “I am disappointed to see that ‘zero’ lease sales is even an option on the table.”One of the proposed new leases could be granted in Alaska’s Cook Inlet, an area that is already highly vulnerable to the effects of climate breakdown. “This decision is incredibly disappointing in the face of ongoing climate impacts that are already being deeply felt by our community around Alaska,” said the advocacy director at Cook Inletkeeper, Liz Mering.Mering added: “Alaskans have worked to ensure that Lower Cook Inlet remains this incredible place for our fisheries and tourism industry, which support a thriving local economy. Thirty-three years after the horrific Exxon Valdez disaster, Alaskans still remember and recognize the risk of more oil fouling our waters, killing our fish and hurting Alaskans.”The proposal came a day after the administration held its first auction of onshore lease sales, drawing bids of $22m from energy companies seeking drilling rights on about 110 square miles of public land across Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming.After the sale, the Western Environmental Law Center attorney Melissa Hornbein said: “Overwhelming scientific evidence shows us that burning fossil fuels from existing leases on federal lands is incompatible with a livable climate.”TopicsBiden administrationJoe BidenOilGasUS politicsCommoditiesClimate crisisnewsReuse this content More

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      The Guardian view on Biden’s risky gamble: betting on lowering oil prices | Editorial

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      The Guardian view on Biden’s risky gamble: betting on lowering oil pricesEditorialThe climate agenda risks being derailed by energy market disruptions caused by Russia’s war in Ukraine Joe Biden’s trip to Saudi Arabia this month highlights the paradox of American power. The US has the economic heft to punish an opponent – but not enough to alter the behaviour of a determined adversary. Sanctions will see Russia’s economy contract by 9% next year. But Washington needs more nations to join its camp to halt Moscow’s brutal invasion of Ukraine. Mr Biden has been forced to prioritise war objectives over ethics in meeting Crown Prince Mohammed bin Salman, who the CIA says ordered the barbaric murder of the prominent journalist Jamal Khashoggi.The havoc that Russia’s war has caused on the world’s energy markets is contributing to an economic crisis that is playing into the hands of Mr Biden’s domestic opponents. This highlights the west’s failure to confront the climate emergency with a less carbon-intensive economic model. The green agenda risks being derailed by sky-high hydrocarbon prices. This scenario could have been averted if western nations had accelerated their net zero agendas by driving down energy demand – the lack of UK home insulation is one glaring failure – and spending on renewables to achieve energy security. Instead, this week the G7 watered down pledges to halt fossil fuel investment over fears of winter energy shortages as Moscow squeezes supplies.Boycotts and bans against Russia, even as they take a toll on the global economy, will cause ordinary Russians hardship. But this has not moved Vladimir Putin. Soaring crude prices fuel Moscow’s war machine. A price cap on Russia’s petroleum exports might choke off the cash. But a concern is that China and India will buy Mr Putin’s oil at a price that still lets the Kremlin profit. Clever technical solutions mask hard choices. Sanctions drive up energy prices for consumers unless there are alternative supplies available. Right now, to bring down oil prices means producing more planet-destroying energy. That requires US engagement with Saudi Arabia and the United Arab Emirates, both of which bear responsibility for the disastrous Yemen war. Washington might have to woo Venezuela and Iran, nations which will play Moscow off against the west.The US is pursuing a three-pronged strategy: increasing pressure on Russia; getting more oil into markets to bring prices down; and allowing central banks to raise interest rates to levels that look as if they might cause a recession. The latter is designed to signal to oil producers that energy prices will collapse. The painful recessions of the 1970s and early 1980s played a part in bringing down oil prices after energy shocks – and contributed to the Soviet Union’s disintegration. But this took 15 years. Mr Putin’s Russia may not be as powerful as its forerunner. It might be more brittle than the Soviet Union. But there are few signs of imminent collapse.As the west seeks to reduce its reliance on Russian hydrocarbons, there seems to be a global “gold rush” for new fossil fuel projects defended as temporary supply measures. The risk, with the US as the largest hydrocarbon producer, is that the world becomes locked into an irreversible climate catastrophe. Europe might become as reliant on US gas as it once was on Russian gas. Donald Trump proved America could be an unreliable ally. Rightwing supreme court justices have hobbled Mr Biden’s power to limit harmful emissions. Meanwhile, China has emerged as a world leader in renewable energy as well as the metals on which it depends. Mr Biden had wanted to transition the US away from oil. Yet during his time in office the sector’s market value has doubled because prices have risen. Jarringly, as the climate emergency grows ever more urgent, fossil fuel appears the pivot on which the war in Ukraine will turn.TopicsUkraineOpinionClimate crisisJoe BidenUS politicsSaudi ArabiaMohammed bin SalmanOileditorialsReuse this content More

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      Biden’s proposed federal tax cut on gas could cost dearly in the future

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      Biden’s proposed federal tax cut on gas could cost dearly in the futureExperts warn cutting the 18 cents will take a toll on highway upkeep and cause prices to rise further when the holiday ends America’s hard-pressed drivers may be about to receive a holiday. On Wednesday Joe Biden called on Congress to suspend the federal tax on gas and diesel until September as the country struggles with soaraway costs at the pump. But experts warned the tax holiday is unlikely to have a major impact on prices and will probably further harm the US’s already battered roads and bridges. If the tax cut even gets passed.Biden’s ‘cursed presidency’: gas prices are latest headache as midterms loomRead moreBlaming Russia’s invasion of Ukraine for the surge in gas prices Biden proposed cutting the 18-cents-a-gallon federal taxes on fuel until September and called on states to cut their gas taxes too. “Together, these actions could help drop the price at the pump by up to $1 a gallon or more. It doesn’t reduce all the pain, but it will be a big help,” said Biden.The tax cut’s first obstacle may be its last. The Senate Republican leader, Mitch McConnell, called the plan an “ineffective stunt” and other critics in his own party may join Republicans in blocking any cut.But with prices still soaring and midterm elections looming the administration is increasingly looking for ways to spare the public from prices at the pump, currently averaging at just under $5 a gallon.The non-partisan Tax Foundation called the plan a “uniquely ill-suited policy for addressing rising prices”. Pointing out that the money from the tax is the primary funding source for highway construction and its suspension could cost $10bn in funding.“Anything that could help the price at the pump is good, but it’ll come at a significant cost to the federal government that supposedly uses that money for the highway fund to maintain highways,” said Mark Finley, fellow in energy and global oil at the center for energy studies at Rice University.US energy economists also warn that dropping taxes on gasoline – a similar program has been suggested in the UK and other countries – does not address the fundamental issues of high demand.In a February report, the committee for a responsible federal budget found a federal gas tax holiday could “further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it”.“Gas prices are high because supply and demand are tight in the US and around the world both for oil and refined products. The prices are a signal that producers should produce more and consumers should consume less. You don’t fix the problem and you may exacerbate it, if you try to hide those signals,” said Finley.Moreover, prices may surge when the tax is lifted, according to a study released from the Wharton School at the University of Pennsylvania. Earlier this year, Maryland introduced a month-long gas tax holiday. The study found that prices rose when it expired and the tax may have cost the state $100m.Other states have tried similar measures. New York suspended its 16-cents-a-gallon tax this month for the rest of the year. Others, including Georgia, Florida and Connecticut, are cutting the tax but for shorter periods. California may send $400 to every registered vehicle owner.The debate over energy prices threatens to become one of the most contentious of the election season. This week, Exxon Mobil said global oil markets may remain tight for another three to five years, largely because of a lack of investment since the pandemic began. Biden has responded to rising prices at the pump – and a decline in his approval rating – by lobbying Opec+ countries, which include Russia, to accelerate production increases.Biden will travel to Saudi Arabia next month to ask the kingdom to turn on the spigots. But studies indicate that the Saudis are themselves at the limits of current capacity. The venture comes with a political cost, undercutting the administration’s commitment to renewable energy and an election pledge to make Saudi Arabia a “pariah” state after the murder of the Washington Post journalist Jamal Khashoggi.Other measures that the administration has undertaken to reduce energy costs, including releasing millions of barrels of crude oil from the strategic petroleum reserve and greater ethanol blending, have not turned the tide on rising prices. According to Ed Hirs at the University of Houston’s department of economics, Biden’s actions, including a stern letter to refiners to produce more gasoline and diesel, will not keep the average price at the pump from reaching $6 by September.The debate over energy has in a sense been misframed, said Hirs. “We don’t see lines at the pump, there is no shortage of oil, all we see is a higher price and that’s in essence because Opec wants a higher price,” Hirs says.The message to the US consumer is equally blunt. After 2008, when oil hit $147 a barrel, US automakers had to accept government bailouts as the consumers jumped away from gas-guzzling SUVs and pick-up trucks.“If the war in Ukraine continues we could easily see the same thing by this time next year,” Hirs predicted. “We have to think of this in a different way. A lot of folks in the west think we’re entitled to gasoline and diesel, in the same way we’re entitled to iPhones. But we haven’t operated the economy like that.”Put plainly, there’s little the administration can do. “We’ve reached a point where supplies of gasoline, diesel and crude oil are below our five-year averages, so it appears we’ve been exporting as much as we can,” said Hirs. “As long as the conflict, really between the US and Russia, persists, the EU nations will be additional buyers. So the fellow in London looking to fill his car, and the woman in France, are competing with someone on I-95.”TopicsOilUS politicsBiden administrationanalysisReuse this content More