Lawmakers Rally Biden to Cut Off Russian Oil and “Hit Putin Where It Hurts Most”

Source: By Steven T. Dennis and Daniel Flatley, Bloomberg • Posted: Wednesday, March 2, 2022

Manchin, GOP pushing Biden to boost domestic oil, gas industry Some Democrats want to accelerate shift to renewable energy

President Joe Biden is being pressured by lawmakers in both parties to cut off U.S. imports of Russian oil and gas to escalate the cost to Russia of its invasion of Ukraine.

Such a move would likely send gasoline prices surging in the U.S., making it a politically and economically risky move for a president already grappling with the highest inflation in four decades. Crude traded near $105 a barrel on Tuesday, further fueling inflation concerns.

But the building sentiment in Congress parallels the push from senior Democrats to expel Russian banks from the SWIFT financial messaging service, a step the administration initially resisted amid warning about the fallout. That reluctance gave way as Russian President Vladimir Putin’s forces pressed deeper into Ukraine.

Leading Republicans like Senator Lindsey Graham of South Carolina argue that Biden is failing to “hit Putin where it hurts most.” But, as with Biden’s about-face on SWIFT, the pressure campaign from the president’s own party — particularly as Biden prepares for his first State of the Union address Tuesday night — may prove to be most consequential.

Massachusetts Democrat Ed Markey, who sits on the Senate Foreign Relations Committee, introduced legislation Tuesday that would ban all imports of Russian crude oil and petroleum products into the United States. Meanwhile, West Virginia’s Joe Manchin is leading a push to expand domestic drilling to boost exports to NATO allies.

Manchin, who called the U.S. reliance on Russian energy “ridiculous,” is often an outlier within his own party but he’s not the only Democrat interested in shifting the Biden administration’s policy toward oil and gas.

Senator Bob Casey of Pennsylvania said he would be willing to consider moves he wouldn’t have before the invasion, including more energy production. And Senator Jon Tester of Montana said he could support more drilling too.

“The fact is we’ve got a different problem now, and that is we may have to supply Europe,” Tester said.

U.S. benchmark oil prices have surged past $100 after Russia's invasion

America purchased over 600,000 barrels a day of Russian crude and petroleum products in 2021, up 24% from the year prior, according to the Energy Information Administration. That’s about 3% of U.S. oil consumption. Canada on Monday banned imports of Russian crude oil, though it hasn’t imported any since 2019.

Republicans led by Senator Roger Marshall of Kansas also proposed their own ban on Russian oil imports late Tuesday.

The administration hasn’t made any steps to cut off Russian oil and gas but on Tuesday a key official signaled a willingness to take steps that would mitigate the loss of those imports.

Senate Leadership Speak To The Media Following Weekly Luncheon Meetings

Bob Casey Photographer: Andrew Harrer/Bloomberg

“We’ve had discussions with OPEC+ about increasing their production. And there’s also ongoing discussions about a coordinated release from the Strategic Petroleum Reserve to produce and allow more barrels of oil to come onto the market,” National Economic Council deputy director Bharat Ramamurti told Bloomberg TV.

The administration is also facing calls from industry to ramp up domestic production. Chevron Corp. CEO Mike Wirth said that any short-term measures taken by the administration should be accompanied by long-term commitments to support investment in the domestic oil and gas industry. Ramamurti said there are 9,000 unused leases that the U.S. government has provided for oil and gas production and, “people are free to use them if they’d like to.”

Chevron Calls on Biden to Support U.S. Oil Amid Russia Risk (1)

But increasing fossil fuel production runs into the view by many Democrats who say that climate change is an existential threat and can only be countered by a focusing on boosting renewable energy.

“We’re observing two wars at this time,” Dick Durbin, the Senate’s No. 2 Democrat, said in an interview. “A red hot war in Ukraine, where the people are showing extraordinary courage to bring back their freedom from this invasion by Putin and a war against climate change, which is going to be as devastating to the world as any hot war on a military basis.”

Senate Majority Leader Chuck Schumer, meanwhile, minimized the issue of Russian oil when asked about Manchin’s push for more drilling, saying Russian oil is only a small part of U.S. energy supplies.

“The real problem with the increased gas prices is gouging and monopolies. Democrats are focused on those two issues,” he said.

Manchin, who chairs the Energy Committee, plans weeks of hearings on boosting energy production, and the push comes at a time when concerns about inflation and gas prices have soared while Biden’s poll ratings have slumped.

Republicans meanwhile, have been seeking more domestic oil and gas production since the start of the Biden administration and are now asking for regulatory relief.

“If there’s anything that can change their policy, it might be war,” said Alaska Republican Senator Lisa Murkowski.

— With assistance by Nancy Ognanovich, and Sheela Tobben

(Adds oil prices in second paragraph, Republican proposal to ban Russian oil imports in 10th and remarks by Senate Majority Leader Chuck Schumer in 16th)

|