Much of the world has condemned Russia’s invasion of Ukraine and put in place sanctions aimed at damaging the country’s economy. However, Russia’s prominent role in energy production means those same countries stop short of taking full measures.
Russia is the second largest oil producing nation in the world, behind the United States, but ahead of Saudi Arabia. It exports about 2.5 million barrels of oil per day, mostly to European counties, but also to the United States. According to the U.S. Energy Information Administration, Russia accounted for about three percent of crude oil imports to the U.S. in 2021.
Russia is heavily reliant on energy exports to drive its economic engine. As the Wall Street Journal opined, “Western sanctions would be stronger if they included energy, and $100 (a barrel) oil offers the Kremlin an economic cushion that should be targeted.”
The concern, however, is that shutting off Russian oil would produce a significant spike in global prices at a time when Americans are already worried about the rising cost for a gallon of gasoline.
Russia is also a major producer of natural gas. It supplies about forty percent of the natural gas used by European Union countries. Turning off the spigot would wreck the European economy and make for a cold rest of the winter.
The EU has been worried for years about the dependence on Russian natural gas but has done nothing about it. “It‘s really difficult to overhaul an energy system overnight,” said Nikos Tsafos at the Center for Strategic and International Studies told Marketplace. “The questions Western leaders need to be asking is how to make incremental changes right now.”
Meanwhile, the West should look to mid-and long-term solutions so it is not caught in this situation again the next time Vladimir Putin flexes his considerable military might. That is where the United States, and in particular West Virginia, can play a critical role.
The Mountain State is sitting on top of enormous natural gas reserves that can be tapped using hydraulic fracturing. Charlie Burd, executive director of the Gas and Oil Association of West Virginia, said, “I believe West Virginia and the other Appalachian basin states can play a key role in supplying natural gas for liquefaction and shipped to those allies.”
One of the challenges, however, is infrastructure. There is not enough pipeline capacity or LNG port terminals to meet a significant increase in demand. It is easier to launch a spaceship than build a pipeline because of opposition from environmentalists.
Dominion Energy and Duke Energy gave up on the planned Atlantic Coast Pipeline from West Virginia to Virginia and North Carolina because of opposition, and the proposed Mountain Valley pipeline from West Virginia to southern Virginia is tied up in court challenges.
Most recently, the 4th U.S. Circuit Court of Appeals invalidated the U.S. Fish and Wildlife Service’s authorization of the pipeline, concluding that the agency failed to consider the full impact the pipeline would have on two endangered species of fish—the Roanoke logperch and the candy darter.
Dependence on Russian oil and gas was supposed to create the kind of global economic interdependence that keeps countries from invading one another. Clearly, that did not serve as a deterrent for Putin.
The United States has enough oil and gas to help fill the void if and when countries begin to wean themselves off Russian energy. The war in Ukraine is a stark reminder: Our ability to produce oil, gas and coal, and ship it around the world is a matter of national and global security.