The Global Oil Crisis And Russia's Invasion Cast A Shadow Biden's Climate Objectives

The abrupt shift in Biden's energy policy priorities reflects the difficulties that any US administration may face in attempting a comprehensive, decades-long reform of the country's massive energy economy in order to combat global warming while also assisting geopolitical allies and keeping consumer prices stable.

Failure to strike that balance may have serious political ramifications for Biden's fellow Democrats in November's midterm elections: conservatives would blame the party if pump prices remain high, while progressives will punish the party if it backs down on climate commitments.

"The reality is that there will always be short-term costs associated with long-term gains, and I'm not sure this administration is willing to pay them," said Ed Hirs, an energy economist at the University of Houston, referring to the political and financial costs associated with combating climate change.

When asked this week if the president was still sure the US could meet its climate commitments in light of the headwinds, White House spokesman Jen Psaki said no. "We are continuing to seek it and will do everything possible to achieve it," Psaki added.

On the campaign trail, Biden pledged to put the United States - the world's largest oil consumer - on track to achieve carbon neutrality by 2050 and to transform the power grid to be carbon-free by 2035, lofty goals he hoped to accomplish during his first two years in office, when his party held razor-thin majorities in Congress.

Renewable energy accounted for only 12% of the United States' oil, coal, and natural gas-dependent energy consumption in 2020, compared to over 20% in the European Union.

Biden's multibillion-dollar climate change legislation, which included many of the actions necessary to achieve those objectives, has been blocked in Congress by conservative Democratic Senator Joe Manchin and Republicans. Senate Democrats need the backing of all 50 senators plus Vice President Kamala Harris in order to approve the measure via a process known as reconciliation.

"Without the reconciliation package, he would be unable to fulfill his climate obligations," said Jamal Raad, executive director of Evergreen Action, an advocacy organization that assisted in the legislation's development.

"The following weeks genuinely represent his last opportunity to succeed, and his legacy is on the line. We are at a tipping point."

The Build Back Better Act would have invested $300 billion in tax credits for producers and purchasers of low-carbon energy, extending existing tax breaks for renewable energy and introducing new ones for nuclear power, as well as accelerating the transition to electric cars. Manchin, from coal-producing West Virginia, opposes it as being too pricey, while Republicans have blasted it as being excessively costly and harmful to the economy.

There are no hints that the White House and Manchin are any closer to agreeing on a large spending plan behind the scenes. According to three individuals familiar with the conversations, the two parties are not functioning on a set schedule and many critical elements remain unresolved.

REVERSAL TO FOSSIL FUEL

Biden also campaigned on a promise to block federal drilling auctions in order to aid in the battle against climate change, but that attempt has been stalled by a court challenge brought by Republican-led states.

The administration announced late last Friday, just before the holiday weekend that it would resume leasing public lands, albeit on far fewer acres than initially proposed, following a court order.

Meanwhile, the government has been forced to contend with a powerful combination of rising global consumer energy demand during the pandemic's deadliest days and Russia's invasion of Ukraine, which has constrained global oil supplies.

The Biden administration enacted broad punitive sanctions on Russia, squeezing one of the world's largest oil and gas producers' supply to global markets, a factor that drove gasoline prices to record highs over $4.30 a gallon last month and pushed inflation to 40-year highs.

The White House has appealed to the fossil fuel sector for assistance in controlling gasoline costs. The government drew on the nation's oil reserves to rein in prices, appealed with local producers to accelerate drilling, and urged everyone from OPEC's powerhouse Saudi Arabia to Brazil to boost output.

To be sure, the Biden administration has taken several executive actions to address the climate crisis, including tightening federal regulations on vehicle emissions, hydrofluorocarbons, and methane leaks, and announcing the administration's intention to purchase electric vehicles for the federal fleet and upgrade the energy efficiency of federal buildings. It also re-entered the Paris climate accord, which requires nations to make progressive promises to reduce emissions.

However, analysts believe Biden would struggle to reach his climate ambitions if the bulk of his climate legislation is not passed.

Amy Myers Jaffe, a research professor and managing director of Tufts University's Climate Policy Lab, said Biden would almost certainly have to compromise on climate legislation if it passes.

"In my opinion, it is not a complete law," she said. "I believe it would be more focused legislation addressing urgent energy needs and the desire to make a long-term pivot to increase our competitiveness in clean energy, which is ultimately the future of US energy technology exports."

Notably, Gina McCarthy, the White House's climate adviser, is slated to resign as soon as next month. McCarthy, a close Biden aide and regulatory specialist, was tasked with leading the administration's attempts to execute climate change legislation, and her resignation reflects some uncertainty about the measure's chances of success.