American oil companies cynically try to profit off the Russian invasion

Feb 24, 2022

By Aaron Weiss

Arguments for more drilling don’t add up when Europe is “doubling down on renewables”

Promoters of the global oil and gas industry are trying to capitalize on Russia’s war on Ukraine by arguing that America could somehow ease the crisis by simply exporting more liquified natural gas (LNG) to Europe. This argument is both disingenuous and contradicts what the industry has been trying to sell American taxpayers for years — the notion that the U.S. needs to drill more at home in order to achieve energy independence.

These claims ignore the obvious long-term solution: rather than increase global dependence on a fossil fuel that contributes to climate change, and is transported across the world via ships that further pollute and exacerbate the climate crisis, the Russian invasion demonstrates why the world — and Europe especially — must accelerate the transition to renewable energy.

For starters, America is already exporting massive quantities of natural gas to Europe. Bloomberg reported that in February, every single molecule of methane possible was being loaded onto ships at all seven U.S. export terminals. In other words, more drilling of natural gas wouldn’t make a difference because the boats are full. U.S. LNG exports hit a record in January, and America became the top supplier of European methane gas, according to the Energy Information Administration.

Meanwhile, oil and gas companies, rather than increasing production or lowering prices, are perfectly happy to keep production relatively flat in order to maximize corporate profits as oil prices pass $100 a barrel. ExxonMobil proudly touted its plans for a $10 billion share buyback after reporting fourth quarter earnings of nearly $9 billion dollars, or $97 million dollars in profit every single day.

The Russian invasion of Ukraine is certainly not convincing European leaders that they should become more dependent on methane imports from America and the Middle East. On the contrary, the war has become a wake-up call that Europe must transition to renewables even faster.

European Commission President Ursula von der Leyen made that clear over the weekend. “We are doubling down on renewables. This will increase Europe’s strategic independence on energy,” she said. The new EU energy plan will be unveiled next week, and is expected to call for a 40 percent reduction in fossil fuel use by the end of the decade. The plans will also speed up permitting of renewable energy projects, which already account for the plurality of electricity usage in Europe.

This reveals the oil industry’s calls to increase drilling on American public lands and cut corners on drilling permits for what they are: profiteering off Russia’s war. It takes years for new leases to begin to produce oil and gas. By the time any new production comes online, Europe will be even further down its exceptionally prudent path to eliminate its dependence on American methane.

Russia’s invasion of Ukraine has put Europe on a fast track to energy independence — one that’s not dependent on global commodity prices or boom and bust economies. America should learn the same lesson. Whether it’s ExxonMobil or Gazprom, it’s foolish to make your economy even more dependent on an industry that will always put profits over people.

Featured image: LNG tankers at the Sabine Pass export terminal, Wikimedia Commons