When Joe Biden laid out America’s response to Russia’s unprovoked invasion of Ukraine on Feb. 24, he promised aggressive measures like a crackdown on Russian banks and a limit on exports to the country. But notably absent from his self-declared effort to defend democracy and make Vladimir Putin a “pariah,” was one of the biggest penalties he could impose: targeting Russia’s energy industry. Instead, Biden suggested that sanction might be off the table. “As we respond, my administration is using… every tool at our disposal to protect American families and businesses from rising prices at the gas pump,” he said. “We’re taking active steps to bring down the costs.”
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It was a quick moment, but a striking one. In the face of a full-scale assault on Ukraine by a resurgent Russia, protecting American consumers from paying a few extra dollars to fill up at the gas station appeared to outrank defending global democracy. In context, though, Biden’s position was hardly surprising. The political impact of domestic energy costs has shaped U.S. foreign and national security policy for the better part of 50 years. The administration’s adamant efforts to keep energy prices low throughout Biden’s 13 months in office follow decades of conventional political wisdom that maintains that few—if any—issues are significant enough for consumers to willingly give up cheap gas prices to address them.
What is surprising is that the Russian invasion of Ukraine may be changing that calculation. As a growing chorus of officials in Washington calls for an embargo on Russian oil, and opinion polls show a majority of consumers willing to pay more to defend Ukraine, the Biden Administration has been forced to consider it—along with the political challenges it raises. “Every politician is going through this right about now: is this a moment to ask for additional sacrifice?” says Gernot Wagner, a professor at New York University who studies the economics of climate change.
The lasting impact of this moment could be far-reaching: it may shape not just the course of Russia’s war with Ukraine but the way politicians across the globe weigh the impact of energy prices on everything from taxes to climate change.
To understand the political fear of high oil prices, it helps to look back to the 1970s when energy shortages were so prevalent that they inspired a Billboard hit song—Energy Crisis ’74. Throughout the decade, politicians struggled to address disruptions to the supply of oil from the Middle East, but President Jimmy Carter’s response stands out as a clear warning to the politicians who remember it.
In 1977, as the price of gas ticked higher and stations limited the size of each customer’s purchase, Carter went on television to suggest that Americans “learn to waste less energy.” He donned a cardigan and suggested turning down the thermostat. The cover of TIME declared that “Uncle Jimmy Wants You” while questioning whether Americans would actually heed his call. The response was mixed at the time, with many indeed willing to sacrifice. But today the speech is viewed as milestone in what has been described as the Carter-era malaise that resulted in his landslide electoral defeat. His successor, Ronald Reagan, was adamant that instead of asking for sacrifice and attempting to “force more limits on people,” he would solve the problem of high oil prices through the “magic of the marketplace.”
Ever since, presidents have touted low gas prices and projected the urgency of bringing them down whenever they crept up. Bill Clinton tapped federal oil reserves in hopes of reducing costs and offered hundreds of millions of dollars in aid to families hit by high gas prices. When oil prices soared under George W. Bush, he proposed an array of measures to show his concern. “If there was a magic wand to wave, I’d be waving it,” he said in 2008. To the ire of climate activists, Barack Obama touted the surge in fracking that occurred on his watch and brought down global prices.
From the beginning, the Biden Administration has fought to keep energy prices low—even as some climate advocates argued that higher prices would help address the emissions that cause global warming. As oil prices rose sharply last year, the administration pushed OPEC, the oil cartel that controls 40% of global crude oil production, to ramp up output. Biden’s call was rejected, and he released 50 million barrels of oil from the U.S strategic reserves. “You’ve got to have affordable and resilient, reliable energy for Americans,” David Turk, the U.S. Deputy Secretary of Energy, explained to me last November. “That is a political imperative.”
The results of turning off the tap from Russia—which contributes around 10% of the oil exported globally—would make last year’s price rise look quaint. Investment bank JPMorgan estimates that the global benchmark price for crude oil could surge to $185 per barrel by the end of the year if Russian oil is cut off the from the rest of the world. That’s up from around $120 today and $70 at the beginning of December. The economic consequences could be severe. Already the average gas price at the pump in the U.S. is more than $4 per gallon, according to AAA, and it could go much higher. And there are knock-on effects beyond the cost of driving. Sustained higher oil prices would contribute to already rising inflation and could harm economic growth. It’s a brutal combination that would ripple worldwide.
Yet the story of an authoritarian ruler invading a sovereign democratic nation and creating more than a million refugees seems sufficiently to have shaken people up in the U.S. and Europe that politicians on both sides of the Atlantic are weighing the risk. Turning off the Russian tap is perhaps the most significant economic move remaining to pressure Putin. In January, revenue from oil and gas taxes and fees made up 45% of his government’s budget, according to the International Energy Agency. Russian export revenue from oil, gas and related products total more than $1 billion every day. “You will not win against Putin, by directly attacking them,” said Andriy Kobolyev, the former CEO of Ukraine’s state-owned gas company as he began a trip to Washington to convince the U.S. to embargo Russian oil. “But you can make his rule and his strategy to be considered as nonsense with the relevant Russian people who understand that their whole business is collapsing.”
A growing cohort appears willing to pay. A Reuters/Ipsos poll released in early March found that 62% of Americans are willing to pay more for fuel as a result of sanctions against Russia, up from 49% just two weeks prior. And four out of five support an embargo on Russian oil. Whether they sense the shifting zeitgeist or are simply outraged by the alarming trickle of news coming from Ukraine each day, members of Congress have also shown a surprising willingness to risk high energy prices to aid Ukraine. On March 3, a bipartisan group of 18 lawmakers announced legislation to ban the import of Russian oil. Speaker of the House Nancy Pelosi immediately endorsed the idea.
“If there was a poll being taken and they said, ‘Joe, would you pay 10 cents more per gallon to support the people of Ukraine and stop the support of Russia?’ I would gladly pay 10 cents more per gallon,” Sen. Joe Manchin, the West Virginia Democrat known as the senate’s swing vote, told reporters at a press conference announcing the legislation.
The Biden administration’s position appears to be evolving, too. After days of insisting that the U.S. wouldn’t touch the Russian energy sector, Secretary of State Antony Blinken said Sunday that the topic was under discussion with the proviso that the administration make “sure that there is still an appropriate supply of oil on world markets.” On Monday, White House Press Secretary Jen Psaki said that the administration had not yet decided whether to ban Russian oil imports.
In Europe, too, the conversation has changed quickly. Despite the constant threat of Russian political aggression and climate change concerns, policymakers on the continent have viewed the idea of quickly ridding itself of Russian fossil fuels as all but impossible. Indeed, the European Union imports 45% of its natural gas from Russia. Abandoning Russian oil and gas would be a massive undertaking, making the prospect extremely unlikely in the short term.
But there is movement where few would have believed possible before. The EU is moving quickly to reduce its gas imports—as much as 80% this year, according to a Bloomberg report. In recent days the bloc has released plans to dramatically reduce reliance on gas and experts have suggested that with some reduction in demand—in other words some sacrifice—European countries could rid themselves of the product entirely.
For many watching, myself included, the dramatic acceptance of restrictions on the oil supply is nothing short of extraordinary. For years, the cost of energy has remained a roadblock to the most aggressive climate policy. Fossil fuels remain subsidized to the tune of tens of billions of dollars annually—or more depending on who you ask. Measures to charge directly for greenhouse gas emissions remain stymied. And regulations don’t begin to address to the scale of the challenge. There’s no doubt that this is in large part due to the immense political influence of the fossil fuel industry, but it’s also the result of the fear that rising energy prices strike in politicians.
If in this moment politicians can finally articulate that some things are worth paying for—whether it be democracy or a livable planet—it will be a watershed.
—with reporting by Simon Shuster/Lviv
