Hitting Back at Russia – An Energy Perspective

Energy and foreign policy are inextricably linked. As Russian tanks cross borders in Eastern Europe it’s worth examining how energy is influencing events and considering the opportunities we have as Americans to strengthen our global position. First, it’s important to remember that energy requires infrastructure, and infrastructure is notoriously slow to build. Fast changes in the energy industry are not always possible, but with armed conflict and crisis happening now, strategic short and long-term goals must be identified and we should be working toward them with urgency.

60% of Russia’s exports and fully 30% of its entire economy are tied directly to oil and gas. In fact, it’s estimated that about 40% of Russia’s federal budget revenue is derived from the sale of fossil fuels, and we can be sure that at least some of that money is financing the army we see invading Ukraine right now. Abundant natural resources provide a strategic advantage for Russia. Europe is beholden to supplies of Russian gas and oil and the world economy is tied tightly to oil prices. However, in both the short and long-term it is possible for the United States and our allies to turn this current reality into a fatal liability for Russia.

In the short-term, the Biden Administration should reverse its indifference toward domestic oil and gas production. To help our European allies reduce reliance on Russian imports, the United States should focus particularly on dramatically increasing our capacity to ship liquified natural gas. The US is already the number one producer of both oil and gas globally, and we should press our advantage in strategic ways to weaken Russia’s leverage over our allies.

Long-term strategies look quite different. It should be noted that while the United States can certainly pump more oil and ship more gas, this does nothing to hinder Russia’s ability to sell those commodities in a high demand global market. In fact, the day after Vladimir Putin announced a full invasion of Ukraine, Pakistan’s Prime Minister was in Moscow negotiating a deal to build a pipeline and purchase Russian oil and gas. A world that requires over 100 million barrels of oil per day is a world where Russia will find someone to purchase their oil.

Long-term we should be utilizing innovative technology to drive us toward a future where oil and gas are diminished in their importance. Solar, wind, energy storage, nuclear, and renewable natural gas can make the world radically less dependent on countries like Russia, Saudi Arabia, and Iran. Electric vehicles alone present a prime opportunity to undermine Russia in significant ways. 70% of the United States oil use is tied directly to transportation, primarily the fuel we put in our vehicles. The Western world can strike a huge blow against Russia by accelerating the transition to electric vehicles and subverting world oil demand.

We often think of “clean energy” technologies as solely the concern of climate change activists. No longer. These technologies can help us break the chains that autocratic petrostates like Russia and Saudi Arabia have on the free world. Don’t buy an electric vehicle to save the climate, instead buy an electric vehicle to thwart Vladimir Putin.