Putin’s war has caused oil industry price gouging, EOPA officials call for it to stop
Elected officials say to protect the world we need to accelerate the transition off of fossil fuels to end our dangerous dependency
February 24, 2023
By Ramona du Houx
This week, by boldly visiting President Zelensky in the war-torn Ukraine, President Biden focused our attention on how important it is for countries to become independent from their use of fossil fuels for their democratic security. As long as there is a market for Russian oil and gas, Putin will have the resources to continue fighting with little hope for meaningful peace negotiations.
Putin’s war and autocratic plans have been dependent on the Free World using fossil fuels as their energy source. The late Sen. John McCain famously said, “Russia is a gas station masquerading as a country.” Before the 2022 invasion, Europe made the mistake of actually increasing its dependence on Russian gas from 27 percent in 2013 to 38 percent.
In 2022, despite the war, Russian oil revenue was up 50 percent, according to the International Energy Agency. Gas exports have actually increased during the war. This has given Putin ammunition to fight Ukraine to the tune of more than $700 million a day. According to the IEA, in 2021 oil and gas made up 45 percent of Russia’s federal budget, with about 60 percent of exports going to Europe and 20 percent to China.
“We cannot simply increase oil and gas production to address this international security threat as it will take too long to ramp up fossil fuel production to meet the crisis, while creating other serious dangers,” said Alexander Cornell du Houx, President Elected Officials to Protect America, former Maine State Representative, former combat Marine. “Removing our dependence on fossil fuels is the single most impactful action we can do to undercut authoritarian regimes. Using fossil fuels only exacerbates the climate crisis. It keeps democratic nation’s dependent on autocratic nations. Clean energy is the only rapid solution for a secure sustainable global economy.”
Despite America’s six LNG plants are already at capacity, US oil and gas companies are pushing to solve the short-term problem of a tight European gas supply with long-term liquefied natural gas (LNG) contracts, a new report shows.
The American fossil fuel industry has locked in 45 long-term contracts and contract expansions since the start of the war, according to research by Friends of the Earth, Public Citizen and BailoutWatch. That’s an increase from the 14 such contracts signed in 2021.
Most of the new contracts won’t deliver gas until 2026 or later, after which they will lock in purchases for 20 years or more. It will take years and billions of dollars to expand capacity that will only add insecurity to the world as more fossil fuel usage will add to the climate crisis.
“A short-term supply crunch won’t be solved with long-term infrastructure that will only continue the dependency on polluting, unhealthy fossil fuels. It won’t help Americans who are stuck living with gas and oil fluctuations as long as we remain dependent on them for energy. And it’s certainly not helping frontline communities subjected to fossil fuel production pollution, because of redlining,” said Christian Brock, CEO, Elected Officials to Protect America, Air Force veteran. “Putin’s dependence on a single source of energy for the largest sector of his economy gives us a tremendous opportunity to increase international security if democratic nations accelerate their transition to a clean energy economy. We need world security and that starts with clean energy security. We need energy independence from fossil fuels.”
Elected Officials to Protect America (EOPA), a non-profit of thousands of elected officials who are working to mitigate the climate crisis, says we need to accelerate America’s clean energy economy to protect our people from oil and gas fluctuations, and the ongoing national security dangers of being dependent on fossil fuels.
“Already 8 million souls have been forced to leave Ukraine because of Putin’s unjust war. It’s become clear he has committed crimes against humanity. Our dependency on oil and gas encouraged his actions. Fossil fuel usage has caused the climate crisis and more conflicts will happen unless democratic nations accelerate their transition to a 100 percent clean energy. Debbie Sariñana, Co-Chair National Leadership Council, New Mexico State Representative, Air Force veteran. “In New Mexico there is a major push to increase crude oil export capacity out of the Permian basin because of Putin’s war. Frontline communities live under the threat of the toxic pollution that the oil industry lets happen, many children suffer from asthma and life long illnesses. Too many people have died from cancer. We have to think of our children’s future, and the children around the world. We must become energy independent from fossil fuels in order to create a secure world, and a healthy planet.”
EOPA has a letter which over 1,000 elected officials signed urging a Presidential Climate Emergency Declaration in support of a 100 percent clean energy economy.
Oil and gas companies are strategically working against what would be best for our security and the health of the planet. Taken together, the 2022 LNG contracts total 58.1m metric tons per annum of LNG every year – that’s more than half the gas burned for cooking and heating in US homes in 2021. These contracts represent 351m metric tons of carbon dioxide emissions per year, equivalent to the yearly emissions of 94 coal plants or one-third of all US households. Europe has been using 500 billion cubic meters of gas, of which 40 percent came from Russia. Even shifting U.S. production from Asia only adds 15 billion cubic meters above the 22 billion cubic meters the U.S. provided last year.
Despite the image Putin wants to convey, even before the expanded invasion, Russia was not an economic superpower, ranking 11th in the world. Its GDP per capita is 65th in the world. Without oil and gas revenue, the Russian economy will collapse.
America is on the path to a clean energy economy with the Inflation Reduction Act and its incentives to build the clean energy future, the Infrastructure Jobs Act and the President’s use of the Defense Production Act. American companies restored almost 350,000 manufacturing jobs in 2022—a 25 percent increase from 2021. As of January 31, 2023, over 90 new clean energy projects in small towns and bigger cities nationwide are underway - totaling $89.5 billion in new investments. A recent analysis by the BlueGreen Alliance and the Political Economy Research Institute at the University of Massachusetts Amherst projects that the Inflation Reduction Act will create over 9 million clean energy and climate-related jobs over the next decade.
But the LNG contracts will hold back our progress. Meanwhile, gas and oil price fluctuations remain a threat to the American public. In California Governor Newsom has called for a windfall profits cap on oil companies who price gouged consumers in 2022, using the Ukrainian war and inflation as an excuse.
“Elected Officials to Protect America applaud President Biden’s leadership in building the road to a clean energy economy. What we do at home, must be replicated abroad. Transitioning off of fossil fuels that are manipulated by autocrats like Putin must become a thing of the past. for the world’s security, “said Dominc Frongillo, Executive Director Elected Officials to Protect America. “It’s unconscionable that in California the oil industry used this horrific humanitarian crisis to increase their profits, while hurting families with skyrocketing gas prices. We call for Governor Newsom’s bill to become law and encourage similar action from the federal government.”
At the height of the surge last fall, California gas prices soared beyond $6 per gallon. That was nearly $2.60 above the national average.
“The oil industry is using Putin’s war and inflation as shields to hide their price gouging. Big Oil made $200 billion last year while all across our state families were struggling to make ends meet because they raised prices at the gas pump. What the fossil fuel industry has been doing is criminal. Enough is enough,” Heidi Harmon, former San Luis Opibso Mayor, Elected Officials to Protect America (EOPA) California Leadership Council Co-chair. “We stand firmly behind Governor Newsom’s windfall profits cap. Our people need justice. We need energy independence from the fossil fuel stranglehold over our economy and health.”
Last year, California gas prices were as much as $2.60 greater than what they were in other states— despite taxes and environmental rules adding only about 69 cents per gallon.
“In my community many people live paycheck to paycheck. With gas prices skyrocketing last year too many had to cut back on food and medicines for their families just to fill their gas tank, so they could work. It’s unconscionable,” said Felipe Perez Firebaugh Mayor, Elected Officials to Protect America (EOPA) California Leadership Council. “Now we finally see an opportunity for justice to be served with a plenty on the oil and gas industry for their cruel price gouging. It must become law. The nation needs to follow our example. The only way to give people the long-term security they deserve is to accelerate our transition to a 100 percent clean energy economy.”
Data reported by refiners to their investors shows California oil refiners more than doubled their California profit margins in 2022. The average profit margin 2001 – 2021: 32 cents per gallon. The 2022 profit margin: 66 cents per gallon.
“Across the country gas prices dropped when prices in California skyrocketed. Corporate greed is hurting innocent Californians who are already dealing with inflation, and the ravages of the climate crisis that fossil fuel usage continues to fuel. These corporations don’t care about consumers. It’s up to our lawmakers to right this wrong for the people of California, their health, economic well-being and for our national security. A windfall profits cap must become law,” said Phillip Williams, Councilmember, Yurok Tribe, veteran, Elected Officials to Protect America (EOPA) CA Leadership Council member. “Our national security and world security depends on Free Nations accelerating their transition to a 100 percent clean energy economy. It’s time to make a stand for humanity and the planet.”
Additionally, OPEC is still deliberately supplying less oil than it can – keeping prices artificially high. Every single OPEC nation, and most of the OPEC Plus nations, use authoritarian methods to control their populations and exert global influence. They can do this because currently, democracies are dependent on this single source of polluting fossil fuel energy.
Alarmingly, but unsurprisingly, the U.A.E. and Saudi Arabia declined a call from President Biden at the start of the war in Ukraine but accepted Putin’s call. Even with the overwhelming evidence of war crimes, oil-producing autocratic nations either abstained or voted in favor of Russia staying on the U.N. Human Rights Council.
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