The geopolitical dangers of relying on rogue states for our energy needs

With Russia its continuing invasion of Ukraine, countries are cutting Russia off from the rest of the world by implementing sanctions. In particular, many are now refusing to buy Russian oil, strangling a crucial export for the country.

Moulitsas opened by addressing the inherently intertwined nature of war and the fossil fuel industry: “What we’re seeing right now is a war that is funded—in a large part, if not almost entirely—from the proceeds of fossil fuels. This is [from] Russia selling oil and gas to Europe, but also to the United States.”

Lang offered some perspective about how much cutting off Russian oil might impact the US economy: “Three-and-a-half percent of our crude oil imports come from Russia, but there’s an additional 4.5% for petroleum liquids, which include a whole range of things, including gasoline. So the actual oil is about 4%.”

“What is the core problem of a world that is addicted to fossil fuels, just generally? … Can you speak broadly [to this]?” Moulitsas asked.

Lang replied that the situation that we’re in right now feels like a nightmare to climate hawks like himself:

It’s like, here we are, we’ve got a war with an autocratic dictator who is just basically doing it on his own, apparently, with a little help from some of his army—not all of it, obviously, because a lot of soldiers didn’t know what they were doing. So here we have a situation where we have to respond to that. There’s just no way to avoid responding to that, and that has gotten us in trouble so many times over the last 75 years, say, since the end of World War II, by being addicted to raw materials that we have to get from some unsavory people around the world. And that is costly not just to us, but it’s costly to the people in those countries, often the environmental stuff that’s going on in those countries to get the raw material out, especially fossil fuels, is horrendous… and that addiction puts us in a situation where we get to where we are now, with a war going on.

To respond that we wind up raising gasoline prices, oil prices in the United States, and that’s not just at the pump—that’s everything that’s made with oil … so, you know, everybody says, ‘Well, it doesn’t matter, because filling up your car tank isn’t that big a deal if it’s just an extra $1 a gallon.’ Well, maybe that’s true for some people, but it certainly isn’t true for the bottom economic tiers … If you’re a climate hawk right now, you’re in a position of saying, ‘Okay, how do we make this ban work against Russian oil and Russian petroleum, how do we make that work and at the same time continue on the path of converting away from fossil fuels?’ And I’m not hearing yet anybody who has a good answer to that, although the petition that Daily Kos is running right now on the windfall profits tax is one way to do it.

Sumner added that when it comes to how much oil we import from Russia, it almost doesn’t matter, because the US always has to import some oil:

Oil is, in that great accounting term, fungible … and as long as there is more demand than there is supply, the price is going to go up. So we’ve seen that over the last few days. People have this impression like, ‘Well, if Russia is providing 10% of the oil, then prices will go up 10%.’ No. Prices will go up until the demand and the supply are balanced out again, and that may mean the price goes up until demand drops. Or it could be that the price goes up until people start additional production. But the one thing that is a little terrifying is that with the price going up, it’s likely to drive—just as [Lang] was suggesting—more production … projects. People are going to begin more fracking, more drilling, more production from places that were marginal before.

Lang concurred that any effects on the US economy would not be seen right away: “One of the things you hear about is a timing issue. The ban on Russian oil would go into effect right away … and that is not going to have an [immediate] effect on Putin—well, it might have an effect on him … but what it definitely will not do is have an effect on American production right away … you have to build the facilities, and that takes a long time.”

Offering even more nuance in the conversation, Sumner noted that it was clear that the US and the UK banning Russian oil were already factored into the world petroleum industry’s equation, with many countries “betting that whatever it is that Russia contributes to the world market in the oil, we’re going to cover that one way or another.”

Moulitsas agreed: “[Investors] are looking at the trajectory of the dealmaking and these diplomatic moves, and they’re betting that the US will be successful in unlocking new supplies of oil from, presumably, Iran, Venezuela, and Saudi Arabia—the Gulf.”

America continues to get more oil from repressive regimes, and we still aren’t thinking about how to wean ourselves off of this oil—and this will create more problems for us in the future. Referencing the most recent climate report from the UN, the IPCC Sixth Assessment Report, Lang impressed upon the audience the urgency of taking action:

The longer we wait to make this conversion away from fossil fuels, the more people are going to die … that’s the nightmare, you know? We get another of these reports, it’s a grim thing … and now we have this war, which really puts a fly in the ointment … We can’t delay any longer, or else it’s going to be too late to do anything … it’s going to be draconian, or maybe even impossible, to make the changes 25 years down the road, or 20 years down the road, or even 10. The UN even said, four years ago, we have until 2040 not to be carbon neutral, but to be on the trajectory to get there … if this goes the way fossil fuel people want this to go, that’s going to lead to further delay.

Sumner also pointed out that cutting off oil and natural gas are two different stories:

If Russia never produced another barrel of oil, it would not be a nightmare… but it’s not going to $300 a barrel. There seems to be no indication that that’s happening. But natural gas is a different question, and in terms of people hurting, the people hurting are in Germany and Italy … natural gas, which has gone up a lot over the last couple of weeks. They are in a much tougher position in terms of how they make that transition. The problem really falls back on natural gas production, which, what we don’t need to do is loosen the regulations in the US … so if there’s demand … there’s natural gas that can be produced under the existing regulations, and it’s not going to happen instantly.

Lang emphasized that what we’re doing to address climate change right now is not sufficient to make a significant enough impact: “We have not made certain pledges that lots of places have made to hit certain targets by 2030 or 2035 given what we’re doing now… right now, we’re investing something like 2% of GDP in new energy—we need to be doing 5%, which is a huge increase.”

Moulitsas asked, “What does a world look like [in which] we have less reliance on fossil fuels?”

Sumner thinks that it would be possible to make war so costly that people no longer decide to engage in it, meaning that direct military confrontation won’t be necessary to stop military action. Yet, this is not the reality yet because of our continued reliance on fossil fuels, and Sumner hopes more people understand the risks this reliance poses to not only our economy, but also to human rights and political stability around the world:

Putin is still being somewhat propped up by hundreds of millions of dollars a day because of the dependencies we have on fossil fuels. And people are getting a strong reminder that we would not be going to Venezuela, we would not be going to Saudi Arabia, we would not be dealing with people that we didn’t want to deal with that are huge violators of human rights and environmental policies if they didn’t have fossil fuels. So fossil fuel is a weakness on every part of our foreign policy front. It’s a weakness for everybody that uses them. So the faster we can get away from them, the quicker that we can discard that weakness.

Lang highlighted the importance of introducing viable alternative sources of energy, such as solar and wind, around the world:

There’s another aspect to it too, and it doesn’t have to do with dictators so much, but it definitely is geopolitics … take Africa for example, or Indonesia, or India even. Those places, where lots of people still don’t have electricity—in Africa, it’s a huge percentage who don’t—and part of the problem has been transmission lines, [which are] extremely expensive. You don’t have to do that with solar. And you could do a whole lot of helping out even the smallest villages. With just a few kilowatts of energy, suddenly you have changed their lives dramatically… I think that change could make a huge difference in politics overall, as well, to finally give people an option that they don’t now have to bring themselves into the modern world, really.

Moulitsas asked the guests, assuming Democrats continue to lack a real governing majority due to US Sens. Kyrsten Sinema and Joe Manchin, if there’s anything President Joe Biden could do via executive order to get the US closer to true energy independence and away from the petroleum industry.

Lang thinks that an executive order would be a powerful action:

Short term, I’m in favor of declaring a climate emergency. Declaring the national emergency for that would mean some things could be done that can’t be done by executive order now … like World War II, basically. It’s World War II, and all you companies are going to have to make tanks instead of Chryslers now. That’s the kind of thing that you can do. That’s a really risky move, but we face a lot of risks [from climate change].

Closing out, Lang and Sumner shared what they think everyday Americans can do to push our government and politicians to take climate change more seriously—and it involves a diversified strategy. As Lang put it,

I’ve always been a believer in both electoral politics and street politics. And I think we’re at one of those places right now where … we should imitate those Russians who, at great risk to themselves and their families, are in the streets of Russia protesting the war that many Russians don’t even know is going on, apparently, because of propaganda. I think we need to be in the streets. When I say in the streets or street politics, I don’t just literally mean in protest, but I think that kind of movement is really what’s going to be required here and everywhere. And from that perspective, I have a lot of optimism, because young people have really taken up the lead on this. They’re out there, they’re talking it up, they’re pushing hard … the energy, the passion, the desire to change things is there. And that’s what has always made the difference in America. Every reform that we’ve ever seen—it started in the streets, and eventually it got confirmed by Congress. And that’s my hopefulness.

Sumner notes that our country, and the world, is at one of these major pivot points:

At one end, we’ve seen people predicting these dire things, like how easy it would be for Putin to be pushed into using these tactical nukes and opening the door to something even worse. But at the other end of this, I think we really could come out of this with astounding benefits for everybody. This really could push people accelerating the use of renewable energy. [We] really could come out of this with a global understanding that wars of aggression just don’t make any sense anymore. So I think there is a really hopeful end to this pivot point that we’re at, but the problem with being in the middle of something like this is you don’t know what’s on the other side of it. We’re all prognosticating. But I want to be hopeful that we can come out of this, like I said, with those things. Faster renewables, less war. That’s a possible outcome.

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