While OPEC has increased production to meet growing global energy hunger as the Covid pandemic eases, Saudi Arabia has rejected Biden government pleas to increase production further. Even as demand for fossil fuels continues to rise, investment in oil and gas exploration and production by major western oil companies has lagged in recent years as investors have exerted pressure to divest fossil fuels and return profits to shareholders .
Aside from what sanctions on Russian oil and gas would do to prices, there are also fears of retaliatory cyberattacks. Just last year, one such attack by a Russian criminal group shut down the important colonial oil pipeline, installed new gasoline lines and carried out hoarding across much of the Southeast.
“There was a kind of amnesia about energy security that developed,” said Daniel Yergin, energy historian and vice chairman of research firm IHS Markit. “That amnesia is now dissipating.” But he was optimistic that the expansion of American oil and gas production had put Washington in a far stronger position to confront Russia. “Europe would have basically collapsed,” he said, if the US hadn’t supplied liquefied natural gas.
However, all that gas is hardly a security blanket for Europe. Local gas prices have quadrupled this winter, partly because Russia has cut supplies. It would have been worse if US gas exports to Europe hadn’t nearly doubled between November and January, but those same exports helped push up gas prices in the United States as domestic inventories dwindled.
More gas exports are a powerful foreign policy tool, but fossil fuels are inseparable from the growing problem of climate change.
“If you drill and plunder in America first to have more fossil fuels domestically, you’re still burning them and the carbon ends up in the atmosphere,” said Daniel F. Becker, the director of the Safe Climate Transport Campaign at the Center for Biological diversity. “The more we drill, the more wildfires, the more droughts and severe hurricanes we exacerbate because global warming is a direct result of burning fossil fuels.”
Electrification of transportation could help, but electric vehicles need batteries containing critical minerals like lithium, cobalt, copper, nickel and rare earths, which are often found in unstable countries. China has a dominant position in refining many of these minerals and could easily be the main energy rival of the future.
Jason Bordoff, director of Columbia University’s Center for Global Energy Policy, said the world needs to move forward with clean energy to deal with climate change, but that change does not guarantee a more peaceful world. “The old oil and gas politics,” he said, “will remain with us and are acute and overshadowed by clean energy politics.”