Spiking Oil Prices Drive Increased Call For Renewable Energy

President Joe Biden's executive order banning all Russian oil imports has had immediate effects, hurting the Russian economy and sending gas prices soaring throughout the United States.

Russia was the third-largest exporter of oil products to the U.S. in 2020, after Canada and Mexico, Statista reported.

In the European Union, however, policymakers have been cautious about taking an extreme position against Russian oil and gas, because they are far more dependent on Moscow for vital fossil fuel imports.

While agreeing to enact a number of sanctions against Russia's broader economy, Europe has resisted an immediate or outright ban on gas and oil imports. The EU imports about 40% of its natural gas and 27% of its crude oil from Russia, Reuters reported.

The European Commission has recognized this as an urgent issue. Last week, President Ursula von der Leyen announced that EU leaders will spend the next two months drafting proposals to phase out their reliance on Russian fossil fuel imports by 2027.

"We must become independent from Russian oil, coal and gas," von der Leyen said in a statement. "We simply cannot rely on a supplier who explicitly threatens us."

"We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition," she added.

While it is pragmatic, many have criticized Europe's gradual "phasing out" approach.

The Ukrainian government has argued that the West must end imports of Russian energy immediately in order to stop financing Russian President Vladimir Putin's war chest.

Other organizations are concerned that Europe's current level of energy dependence puts its security and economy at risk.

"The stability of the EU's energy supply may be threatened if a high proportion of imports are concentrated among relatively few external partners," wrote Eurostat, the statistical office of the European Union.

The situation highlights the importance of energy independence, said Josh Freed, senior vice president for climate and energy at Third Way, a Washington, D.C.-based public policy think tank.

"The reality of the global energy market is that the only way to become independent of these bad actors is to reduce our demand for oil altogether," he told Newsweek.

Reliance on foreign oil can have drastic consequences for nations that are overly dependent on energy imports. Currently, the largest global exporters of oil are Saudi Arabia, Russia and Iraq, countries with challenging relationships to the Western world.

While trade with these nations flows smoothly in times of stability, prices become volatile at the sign of political conflict or potential military dispute. Past conflicts in Eastern Europe reveal a strong correlation between soaring oil prices and Moscow's willingness to aggressively assert its will beyond its borders.

During Russia's most recent military attacks on its neighbors — the 2008 war in Georgia and its 2014 seizure of Crimea and support of breakaway republics in the Donbas region of Ukraine — oil prices were at historically elevated levels ($125 and $102.57 respectively for global benchmark Brent crude).

History has repeated itself, with oil prices topping $130 per barrel last week while Russia continued to bombard Ukrainian cities.

"The challenge the democratic world faces is that relying on fossil fuels from a petroleum dictatorship leaves us vulnerable to their aggressive actions," Freed told Newsweek.

"Countries like Russia, Venezuela, and Saudi Arabia that do not have America or other democratic freedom-oriented nations' best interests at heart," he said, "are able to use the demand for oil to their benefit and to our detriment."

"Now is the time for the United States to step up," he added.

The best way to reduce demand for foreign fossil fuels is to develop and build alternative sources of energy, such as solar panels, wind turbines or nuclear facilities. Freed said that in the short term the U.S. should take the opportunity to export more fossil fuel energy to its E.U. allies, while in the long term leading the transition away from oil and gas into clean energy sources.

"The same fossil fuels that expose us to the whims of authoritarians are also causing climate change," Freed said.

"So the United States needs to make sure to provide a bridge for countries in Europe that want to stop using authoritarian oil and natural gas from Russia," he added. "Then we need to become the arsenal of clean energy that shares, develops and invests in every clean energy technology."

Increasing U.S. natural gas exports in the short term, reducing oil demand in the medium term and expanding clean energy opportunities in the long term are strategies that have received wide support from both Americans and Europeans.

"In emergency plans that the E.U. came out with to replace Russian gas, liquified natural gas (LNG) exports-imports loom large," Daniel Yergin, the vice chairman of S&P Global told PBS NewsHour.

"The U.S. is going to be the largest exporter of LNG this year," he said. "So we have a very important role in helping the Europeans reduce their dependence on Russian oil and gas."

In a joint statement with the European Commission, Frans Timmermans, executive vice-president for the European green deal, said, "It is time we tackle our vulnerabilities and rapidly become more independent in our energy choices."

"Putin's war in Ukraine demonstrates the urgency of accelerating our clean energy transition," he added.

Freed is optimistic that consensus around these goals will lead to tangible progress going forward. He said that democracies should transition into cleaner energy-generation methods as a way to stimulate economic growth and reduce reliance on dictator-controlled foreign oil.

"We can accomplish three goals at once here," he said. "By cutting demand for oil we can reduce our vulnerability to authoritarian states, we can create economic opportunity for the United States and our allies, and we can take on climate change."

The Biden administration shares this view.

"We're working closely with Europe and our partners to develop a long-term strategy to reduce their dependence on Russian energy as well," President Biden said at a White House press briefing last week.

"Our teams are actively discussing how to make this happen," he added. "And today, we remain united, we remain united in our purpose to keep pressure mounting on Putin and his war machine."

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Gas prices have soared amid the Russia-Ukraine war, which prompted President Joe Biden to ban Russian energy imports to the United States. Here, prices for gas at an Exxon station on Capitol Hill on March 14, 2022. Win McNamee / Staff/Getty Images North America