Long accustomed to cheap gas at the pump, Americans are getting some serious sticker shock these days as gas prices soar to $6 or even $7 a gallon. The headlines associate this sharp increase with Russia’s war against Ukraine. Guilt-ridden memes are popping up on social media, shaming people to complain about high gas prices in the face of Ukrainian suffering.
Such logic is based on the idea that oil companies have no control over the price of oil and that high prices follow, almost “naturally”, from an impending shortage of oil following an import ban. Russian energy.
Whether this is true or not, an economy based on such an inconstant source of energy will always be vulnerable. So where are the calls to end our dependence on oil and gas?
Collin Rees, campaign manager at Oil Change International, told me in a recent interview that there is “a complex interplay” of forces that determine prices, and in fact, “the United States doesn’t import as much of Russian oil and gas”. Only about 8% of all oil and gas imported into the United States comes from Russia. Taking into account domestic oil and gas production, Russia’s contribution to US fossil fuel use is only 2%.
Rees explains that if Russia’s war on Ukraine has had any effect, it’s that “increased fear among investors [has] drives up prices. So, no, the Russian war on Ukraine has little direct connection to rising gasoline prices at the pump. Rather, it is investors’ fear of losing current and future profits that drives prices up.
Yet it is important to point out that oil has become a practical ransom in war: the West threatens to stop importing Russian oil, while Russia threatens to cut off oil supplies to the West. “It’s a complex issue with a lot of influence on both sides,” Rees said.
Meanwhile, for Americans struggling to understand what they’re seeing at the pump, prices actually started to rise in 2021 as pandemic-related quarantines eased and Americans resumed their movements and their journeys. According to the United States Energy Information Administration, last year “[r]Rising crude oil prices and increased demand for gasoline contributed to the highest average nominal price since 2014.” Additionally, “[t]he average retail gasoline price increased by more than $1.00/gal from the beginning to the end of 2021.”
“The oil industry is a booming industry,” says Rees. “This is an extremely volatile industry that sees price spikes and drops, and for that reason it’s not something we want our economies to hang on to in the future.”
But the fossil fuel industry is already using the price spike to argue for the production of more oil and gas and to demand the sale of more oil and gas drilling leases. If the logic of Russian oil scarcity is to be believed as the reason for rising prices, then conversely, it is easy to argue that increased supply will drive prices down.
The idea that supply and demand determine prices is an elegant idea that fits well with the myths we’ve all harbored about capitalism. Always an opportunist to ensure corporate profit, Tesla CEO Elon Musk tweeted, “I hate to say it, but we need to increase oil and gas production immediately. Extraordinary times call for extraordinary measures.
But it’s not just Musk. Energy Secretary Jennifer Granholm recently said, “At this time of crisis, we need more supply… right now, we need oil and gas production to increase to meet to current demand.
In other words, the Americans are being told that we must accept that the price of isolating Russia for its war against Ukraine is more expensive gas, and that the price of ensuring cheaper gas is increasing dependence on fossil fuels.
Just a few months ago, Granholm admitted that “the energy industry is making huge profits. They are back…above where they were before the pandemic started. Rees agrees, saying the industry is “raking in massive profits” amounting to “obscene sums of money”. In fact, the world’s 24 largest oil and gas companies made $174 billion in profits in the first nine months of 2021.
The Earthjustice organization points out that with the windfall, these companies “buy back their own stock, funnel dividends to their shareholders, and pay lobbyists to demand new, cheap federal leases so they can store them for future profits.”
It’s easy to make fun of Americans who pay more attention to the price of oil than the price of milk. But decades of artificially low oil prices, combined with out-of-reach electric vehicles, have created an addiction that isn’t the fault of ordinary people. Oil profiteers and their allies in Washington, DC are to blame for keeping our economy entirely dependent on a commodity that also threatens the survival of our species through the resulting climate change.
President Joe Biden during his March 1 State of the Union address could have used high oil prices to boldly tout his climate justice agenda. He could have linked the volatility of oil prices to the need to depend less on oil. But he did neither.
Instead, he assured Americans there would be plenty of oil, saying the United States was “releasing 30 million barrels of our own strategic oil reserve”, adding that “we are ready to do more if necessary”.
Biden, who ran for president on an ambitious climate justice platform, and nominated the first Native American Secretary of the Interior, Deb Haaland, known for her climate activism, betrayed his own agenda. The Washington Post in January highlighted how “Biden outdid” his pro-oil predecessor, Donald Trump, in granting leases to drill oil and gas on public lands.
The bizarre thing is that our continued reliance on oil and gas is no longer financially reasonable, even by the logic of capitalism. Bill McKibben, leading environmental activist and founder of 350.org, wrote in the Guardian: “Scientists and engineers have driven the cost of solar and wind power down by an order of magnitude, to the point that it is one of the cheapest energies on Earth”.
“The major oil and gas companies [have] bought out our politicians,” Rees explains of why there remains such a continued reliance on a destructive and shrinking resource, whose prices are volatile and whose sources are politically strained.
Just as the fossil fuel industry and its political allies are using Russia’s war on Ukraine and the resulting high prices to justify increased dependence on the resource, now is the time for advocates of common sense and safety to use this moment to pivot as far away from the oil as possible. as quickly as possible.
Rees concludes: “It is more critical than ever at this time to recognize that this is a chance to free ourselves from this addiction, to free ourselves from this cycle of conflict and damage, pain and death caused by fossil fuels. , and to build a better world. , With a bit of luck.”
Independent Media Institute
This article was produced by Economy for allan independent media project