Oil and Gas Companies Look to Profit From Ukraine Crisis
Oil prices jumped to $139.13 a barrel on March 7 because of Russia's invasion of Ukraine, and now with the EU, UK, and US all committing to restricting imports of Russian fossil fuels, prices are likely to stay high. Unfortunately, fuel shortages, high demand, and hiked prices give oil and gas companies significant leverage in governments around the world. Even though countries are ramping up their renewable energy sources, it will take time for them to become viable alternatives to Russian fuel.
Oil and gas are the easiest short-term solutions to the energy crisis happening right now, which means CEOs in the industry "have the opportunity to reposition themselves [as crucial to policymakers]," says Robert Buckley, Head of Relationship Development, Cornwall Insight, a leading energy research and consultancy firm. That said, it's not realistic to think that the US can drill itself to the point of energy independence.
France 24: Ukraine crisis could be 'historic turning point' for European energy, IEA chief Birol says, February 24, 2022.
IEA: A 10-Point Plan to Reduce the European Union's Reliance on Russian Natural Gas, March 3, 2022.
Why This Matters
While oil and gas companies are making a pretty penny off the ongoing humanitarian crisis in Ukraine, they are using their influx of cash to lobby governments and pump and drill more, and action that will obliterate any chance of lowering emissions by 2030. Plus, increased oil production and exploration will not lower prices in the current economy; it will "make oil and gas CEOs richer and lock us into more dependence on dirty, unreliable, expensive and volatile fossil fuels," says Lori Lodes, executive director of American campaigning group, Climate Power.
CNBC: Sen. Ted Cruz weighs in on Biden's response to Russia, Ukraine, US oil production, March 8, 2022.
Energy Security Is National Security
Since coming into office in 2000, Vladimir Putin has turned Russian fossil fuels into a political and economic weapon. Over the last two weeks, and as Putin continues to invade Ukraine, the EU is urgently reevaluating its energy supplies and security. To fill the gap, they will need to turn to diverse renewable energy sources.
On Feb. 27, delighting a number of green campaigners, UK Business Secretary Kwasi Kwarteng tweeted, "the long-term solution is obvious: gas is more expensive than renewable energy, so we need to move away from gas."
The Ukraine crisis is also prompting the US to work towards passing clean energy incentives in an effort to boost energy security. Paul Bledsoe, a former Clinton White House climate adviser, predicts, "these actions would represent a significant improvement not only in global energy geopolitics, but result in major reductions in greenhouse gas emissions as well."
BBC: Russia accused of blackmailing Europe over gas supplies, October 6, 2021.
Yahoo Finance: Russia-Ukraine war 'will accelerate' move to green hydrogen, renewable energy (Plug Power CEO), March 3, 2022.