By Dr. Sameena Hameed
Biden blamed the current global energy crisis on Russian invasion of Ukraine, but people perceive it as domestic and foreign policy failings with consequent loss in his popularity.
The Americans are fuming over the reported export of 5 million barrels of oil from the Strategic Reserves, while gas prices remain high. Though gas prices fallen in the last 20 days, yet its painfully high for the American. Inflation few weeks ago had touched a 7-year record peak and natural gas prices at the pumps raced ahead of US 5 per gallon. The voters anger is hitting the roof before November 8 midterm elections. The US President Joe Biden’s both energy and environment policies are facing embarrassing reversals. Not long ago Biden said, “I guarantee you we’re going to end fossil fuels” ushering in new Green Deal that aimed at ending the use of fossil fuels; and promote electric vehicles. Passing more than two dozens of executive orders he shut down the Keystone Pipeline and committed non- renewal of oil and gas leases on Federal public lands and waters producing about 10% of US oil.
Faced with rising gas prices and diesel shortages, many Americans blame Biden's new Green Deal. Biden blamed the current global energy crisis on Russian invasion of Ukraine, but people perceive it as domestic and foreign policy failings with consequent loss in his popularity. To add insult to the injury of the average Americans, not only attempts to isolate Russian oil has failed miserably but other countries are gaining at their cost. Displacing Saudi Arabia, Russia became the largest supplier to China, which purchased record volume of 8.42 million tons of crude oil for about US$ 5.8 billion. India has not only imported around 20% of total Russian crude export at discounted price but has re-exporting refined products to EU and the US. The Russian Rouble hit a 7 year high against the US Dollar just three months after Biden said “The Russian Rouble is rubble”.
Though, the US oil production, has increased between May 2020-March 2022 from 9,711 barrels per day to 11,655 bpd (EIA figures). But the US production is of sweet light variety, that yields limited production of middle distillates like diesel and kerosene. The US imported heavier crude variety from countries like Saudi Arabia (6%), Russia (8%) and also previously Venezuela and Iran. The US imported about 200,000 bpd of oil from Russia in October 2021, which went offline after the imposition of sanctions. This coalescing with the shortage of domestic refining capacity have put upward pressure on gasoline and diesel prices in the US. With soaring temperatures, the power plants in the US were guzzling increased volumes of gas. Biden vowed to supply Europe all the gas it needed in the face of Russian supply disruption. More than 60 percent of US LNG exports went to Europe selling at exorbitant prices; making obvious the causative link with the pains of the Americans. The outage at the Freeport LNG export terminal cooling the domestic gas prices is telling.
Biden also started a war of words with the big oil companies; blaming them of making exorbitant profits. While the US oil and gas Association President Tim Stewart called Biden’s “colossal failure of leadership” in arresting record high gas prices. Biden shot off letters to the big oil companies asking them to explain why they were not putting more gasoline into the market but real constraint is limited domestic refining capacity. Nevertheless, the big oil companies have made a killing with profits more than doubled in the first quarter of 2022 over the same period in the previous year.
Biden’s new Green Deal also falls on its head as energy crisis looms over Europe and is snowballing into rising cost of living. Thousands of people marched on 18 June in central London protesting against the soaring prices. EU imported 20% of its oil from Russia (about 2.2 million barrels per day of crude oil and 1.2 mbpd of petroleum products) and several nations are phasing out Russian oil and gas imports imposing sanctions over the Russian aggression in Ukraine. In retaliation as Russia reduces gas supply with consequent price hikes; Germany, Austria and Netherlands are ready to restart their phased-out coal-fired power plants.
Biden’s pro-environment measures face reversal with emergency measures like authorising (earlier banned) use of more ethanol in gas and reported continued leasing of public lands and water for oil and gas. The American see a loss of US energy independence as the President had to bite the bullet of talking to the Saudis to cool the international oil prices during his forthcoming visit to the Kingdom. Biden’s attempt to mend fences with Saudi Arabia would be seen by many in his administration as betrayal of vowed policies to keep human rights at the pivotal of its foreign policy. For a common American, Chinese and Indians snapping up discounted Russian oil, Biden having to visit Saudi Arabia, which he vowed to treat as a “pariah” state for pumping more oil into the market and is both material and moral loss. For Biden, his domestic credibility and foreign policy posturing are both under fire.
Dr. Sameena Hameed is an Assistant Professor in Centre for West Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.
Email: hameed.sameena@gmail.com
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