Two recent events have been incredibly troublesome but have finally brought home the energy and climate crises that are plaguing the planet. Russia’s unprovoked attack on Ukraine has exposed two follies: Europe’s deep dependence on Russia for oil and natural gas and U.S. imports of Russian oil. Meanwhile, the United Nations’ recent Intergovernmental Panel on Climate Change report has expertly documented the dramatic adverse impacts of climate change on people throughout the globe.
With bipartisan support, President Joe Biden announced a ban on U.S. imports of Russian energy. But he still continues to demonize North American fossil fuels.
After decades of dependence on foreign sources of energy, we achieved energy independence in 2019 and 2020 but have now lost this independence. Recently, Biden acknowledged that we must again achieve energy independence.
Biden should eliminate the moratorium on new oil and gas leases on federal lands. Additionally, the U.S. should approve the Keystone XL pipeline so we can significantly increase imports from friendly Canada and thereby limit imports from foreign actors such as Saudi Arabia, United Arab Emirates, Venezuela and Iran. These actions are necessary for national security.
The U.S. also must implement all policies necessary to dramatically increase liquefied natural gas exports to Europe. We must approve additional export terminals, as well as additional gas pipelines to transport natural gas for processing into its liquefied form. These measures will help expedite Europe’s ability to eliminate its reliance on Russia for 40% of its natural gas.
The European Union and the newly installed German government, with the support of Germany’s Green Party, have recently declared that they want to use much more liquefied natural gas and adopt policies to accomplish this. To totally eliminate Russian natural gas without wrecking their economies, however, European countries also should allow fracking.
It is undeniable that fracking of natural gas, coupled with deregulation of gas and electricity markets, has enabled the U.S. to keep natural gas and electricity prices very low in comparison to European prices. European natural gas prices have consistently been at least five times higher than U.S. natural gas prices for the past 12 months. These high prices have hammered European consumers and enabled Russia to fund its unconscionable war in Ukraine.
Fracking bans also have led to greater European carbon emissions because the high natural gas prices have stymied natural gas replacement of far dirtier coal in their electricity generating plants. In fact, many European power plants have recently switched from natural gas back to coal due to Europe’s incredibly high natural gas prices. In contrast, the U.S. has substantially reduced carbon emissions by replacing coal with natural gas at more than 100 power plants. The burning of natural gas for electricity generation produces only half as many carbon emissions as coal burning.
At the same time the U.S. and Europe are taking all necessary actions to reestablish U.S. energy independence and eliminate European dependence on Russian energy, all reasonable steps to fight climate change also must be taken. These actions are not inconsistent and are both necessary for the economic and environmental health of the U.S., Europe and the world.
Significant strides against climate change are being made in the U.S. thanks to the bipartisan infrastructure law. For example, $65 billion is being spent to support enhancements of the electricity grid, which will allow transmission of electricity produced by renewable energy sources from where it can be produced most cost-effectively. The bipartisan infrastructure law also provides $7.5 billion to accelerate the build-out of a national network of electric vehicle charging stations, and $9.5 billion for green hydrogen initiatives using renewable energy for conversion of water into hydrogen.
As Sen. Joe Manchin, chair of the Committee on Energy and Natural Resources, recently said: “We must commit to once again achieving energy independence by embracing an all-of-the-above energy policy to ensure that the American people have reliable, dependable and affordable energy without disregarding our climate responsibilities.”
The same approach to energy and climate policy must be used in Europe. As former world chess champion and Vladimir Putin critic Garry Kasparov succinctly stated in a recent Tribune op-ed: The U.S. should “replace Russian energy exports by increasing production and opening new sources, from fracking to nuclear to renewables. Giving authoritarians so much leverage for extortion is unacceptable. There’s no point in saving the planet if you don’t save the people on it.”
Now that the Russian invasion of Ukraine has united Americans, Europeans and many others, let’s quickly act together to save the people and the planet.
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ABOUT THE WRITERS
Arthur Laffer is chairman of Laffer Associates, an economics consulting firm. Patrick Giordano is managing director of Giordano & Associates, an energy law firm.
