Politico Congress Minutes

“Rep. Peter DeFazio (D-Ore.), chair of the Transportation Committee, blasted the idea in a statement: “Suspending the federal gas tax will not provide meaningful relief at the pump for American families, but it will blow a multi-billion-dollar hole in the highway trust fund, putting funding for future infrastructure projects at risk.”

Democrats argue any help for families dealing with high gas prices could be worth it, but suspending the federal gas tax may not make much of an impact. The Penn Wharton Budget Model estimated savings would be an average of between $16 to $47 total per capita under a ten-month suspension. Others argue there’s no guarantee the oil companies would pass along all the savings to consumers. And all that to potentially hamstring the fund responsible for funding infrastructure projects.”

US Should Stop Playing the Supplicant to Saudi Arabia

“members of the infamous Blob, America’s foreign policy establishment, are urging Biden to do a full kowtow to Riyadh (and presumably Abu Dhabi as well), doing the royals’ bidding as before. After all, the relationship always has been about them. Years ago Defense Secretary Robert Gates observed that the Saudis were ever ready to “fight the Iranians to the last American.” Nothing has changed.
For example, Washington Post columnist Fareed Zakaria backed the idea of a “grand bargain,” which would trade security guarantees for Saudi concessions: “There is a way for Washington to forge a new security umbrella in the region that includes Israel, Egypt and the gulf states. It would stabilize the security environment, foreclose the prospects of a nuclear arms race in the region and provide access to energy for the industrialized world. But that path would have to include making up with Mohammed bin Salman.”

Bloomberg’s Bobby Ghosh views the problem as personal and political immaturity: “The most important partnership in the Middle East has been put in jeopardy by the peevishness of a prince and political opportunism of a president. Repairing the Saudi‐American relationship will require the first to behave like a grown‐up, the other like a statesman.”

Although Tufts University’s Daniel Drezner was more skeptical that a satisfactory accommodation could be reached, he intoned: “I hope the Biden administration is conducting internal deliberations about what concessions it would be willing to make to engage in some transactional diplomacy with Saudi Arabia. As bad as Saudi behavior has been, Russia’s bad behavior has been worse and merits a priority of focus.”

This approach, which treats murderous wars and grievous human rights violations as minor inconveniences, is a terrible idea. To start, fulfilling demands by dependent regimes would undermine Washington’s credibility. The Washington War Party has routinely insisted that the US should intervene militarily everywhere for the most spurious reasons to convince the world that it is prepared to go to war anywhere at any time for anything. Hence nonsensical claims that failing to bomb Syria over chemical weapons or stay in Afghanistan for a 21st year would trigger major power aggression around the globe. In fact, America’s adversaries distinguish between serious and peripheral issues, and act accordingly. (Which is why Moscow withdrew from Afghanistan after only ten years compared to America’s astounding two decades.)

However, US credibility really would be at stake if the administration submitted to Riyadh’s and Abu Dhabi’s demands, acting as if it was a weak Third World state rather than global superpower. Again, putting royal interests first would encourage other defense dependents to make similarly inflated and malign demands. Washington would be playing the supplicant and would be expected to do the same elsewhere.

Moreover, Saudi Arabia, in particular, and UAE are not normal countries, either liberal democratic or even moderately authoritarian allies. The Kingdom earned a rating of just seven out of 100 by Freedom House, making it one of the world’s baker’s dozen most repressive nations and territories, dwelling in the human rights cellar along with Equatorial Guinea, North Korea, Eritrea, Turkmenistan, and Tajikistan. Riyadh is much worse than Russia, at least prior to that latter’s internal crackdown to suppress any antiwar dissent, which made the latter much more like the KSA.

Those celebrating MbS’s recent social liberalization are merely highlighting how until recently the Kingdom was a true totalitarian state, in some ways more absolute than Mao Zedong’s China and Kim Il-sung’s North Korea. Thankfully, those who face prison for dissent now can attend a movie before being locked up! Alas, a free society that does not make.”

“Riyadh is, despite Drezner’s claim, a more malign actor internationally than Russia. The royal regime’s alleged friendship with America never meant respecting America’s interests. Especially once MbS took effective control of the government. The regime tolerated substantial financial public support for al‐Qaeda until the group attacked the royals. Saudi Arabia also kidnapped a head of government (Lebanon), blockaded and made plans to invade another friendly state (Qatar), used money and troops to enforce brutal dictatorships (Bahrain, Egypt), and subsidized jihadist forces (Libya, Syria).

Worst was the invasion of Yemen. To reinstate a pliable regime in its desperately poor neighbor, Riyadh and Abu Dhabi joined in a “coalition,” hiring countries dependent on their financial largesse, such as Sudan, which deployed ground forces in the conflict. Total deaths are estimated at roughly 400,000, 60 percent of them young children, who are particularly vulnerable to disease and malnutrition. Human rights group report that coalition activity, both air attacks and de facto blockade, is responsible for the vast majority of civilian deaths.”

“In short, rewarding Saudi Arabia to further punish Russia would be a bad trade‐off, for moral as well as practical reasons. Especially since the Saudis likely would undercut any promises to increase production — cheating by OPEC members always has been systemic and endemic. Nor would increasing the flow of Mideast oil necessarily significantly intensify pressure on Russia or affect Moscow’s behavior. US economic sanctions have rarely forced regimes to act against what they viewed as fundamental political interests. The costs of such a policy would be substantial and real. The benefits would be speculative at most.

The better strategy would be for the administration to demonstrate that US officials will no longer be docile retainers for the Saudi and Emirati royals. For instance, the administration should stop helping them slaughter their poor neighbors. The US sold the aircraft, for a time refueled them, and still services the planes, supplies the munitions, and provides the intelligence. Washington should effectively ground the royal fleets by ending support services and weapons resupply. That would encourage the Saudi king to take the president’s next call.

Moreover, the administration should indicate that the well‐armed Gulf regimes are vulnerable to attack mostly because they lack domestic political legitimacy — who wants to die defending Crown Prince “Slice n’ Dice” so can he murder another critic or build another palace? US military personnel should not be treated as mercenary bodyguards, the equivalent of the civilian expatriate labor used to do most of the “dirty work” in those societies. It is past time for the Saudis and Emiratis to earn their people’s support. The KSA’s uncertainty about America’s continuing military commitment already has spurred the regime’s talks with Iran, which could ease the region’s dangerous Sunni‐Shia split. Ultimately Riyadh and Abu Dhabi should take over responsibility for their security.”

“Foreign policy sometimes requires difficult compromises. Thankfully, the Cold War is over. Russia is far less dangerous than the Soviet Union; today’s united Europe is far more able to contain Moscow than yesterday’s Western Europe. If Washington officials are going to confront Russia over domestic oppression and foreign aggression, they cannot excuse Saudi Arabia for the same.”

EU closes in on Russian oil ban — but how tough will it be?

“An immediate, full-blown ban imposed by the EU on oil is still a no-go for economic powerhouse Germany. Berlin has indicated to other EU capitals it’s ready to consider cutting Russian oil — even if it is not yet able to abandon imports of gas — but only under specific conditions, which are now being discussed with the European Commission.”

Drilling permits spiked then plunged under Biden

““The oil and gas industry has millions of acres leased … they could be drilling right now, yesterday, last week, last year,” Biden said last week. “They are not using them for production now. That’s their decision.”
For its part, industry has not leapt to expand drilling.

The major public oil and gas companies that drive much of the United States’ activity are holding themselves back with uncharacteristically miserly capital expense plans, returning cash to investors instead of drilling new wells. Officials with some companies say they are also facing bottlenecks for equipment, rigs and labor.

When it comes to public lands and waters, though, oil and gas companies have accused the White House of not truly supporting their industry and aiming to curb production.

Ryan McConnaughey, spokesperson for the Petroleum Association of Wyoming, said the Biden administration has a “playbook” for federal development: “delay, distract and deflect.”

“It doesn’t come as much of a surprise that the Biden Administration’s approval of APDs [applications for permit to drill] has plummeted,” he said.

Kathleen Sgamma, president of the Western Energy Alliance, said the political focus on the drilling permits and leases already held by industry is a red herring from the White House.

“Just because Acme O&G isn’t using a permit right away doesn’t mean that ABC O&G doesn’t need one for a well it’s planning to drill now,” she said. “If the federal permitting situation weren’t so inefficient and fraught with political interference, companies wouldn’t need to request a large inventory even years in advance.”

If the White House wants drilling to increase, they could ease regulatory requirements and speed up permitting, she said.

The permitting showdown is the latest of many disagreements over the federal oil program under Biden. When Biden came into office last year, he paused oil and gas leasing on federal lands and last fall published a report criticizing the program as antiquated and deferential to industry.

The leasing moratorium was overturned by a federal judge, but leasing has been slow to resume — and bogged down in continued legal wrangling. The outlook for new leasing in 2022 remains in limbo as Interior has said it will be difficult to move forward after a Louisiana federal judge blocked the use of an interim climate metric.

Meanwhile, Interior is developing regulations on oil and gas that will increase royalty rates and bonding requirements on federal leases, as well as impose new methane rules.

But the administration has also taken heat from environmental groups for focusing on these regulatory reforms rather than aggressively working to retire the oil and gas program.

Fossil fuels developed on federal lands, including coal, are responsible for as much as a quarter of the country’s downstream carbon dioxide emissions, according to the U.S. Geological Survey, a statistic that’s underscored criticism of continued drilling from environmental groups and climate activists.

Aaron Weiss, deputy director of the environmental group Center for Western Priorities, said the Biden administration has continued to “rubber stamp” drilling approvals.

“Even under Biden, 96 percent are getting approved versus 98 percent under Trump,” he said.

Weiss downplayed the impact of the permitting slowdown on industry, arguing that the number of permits issued doesn’t have an immediate correlation to industry’s ability to drill and that companies frequently allow permits to expire without being used. His organization counted 8,000 permits that oil companies had not used or had allowed to forfeit between 2016 and 2021.

“A slight dip in approvals makes no difference at all because APDs and available leases have never been a bottleneck,” he said.

With oil and gas companies exercising “fiscal discipline” to please investors, that’s even more the case, he said.”

Can you believe the price of gas? States move quickly to help drivers

“Tymon said there’s no guarantee that savings from cutting gas taxes would be passed on to consumers, whereas other relief mechanisms would have more control.

“If you do suspend the gas tax, you’re stopping a critical source of revenue that’s used to invest in transportation infrastructure,” he said. “It doesn’t seem like it’s a good precedent to set.”

Environmentalists are worried that a tax rebate could be a perverse incentive for gasoline-guzzling cars to hit the road more in an age of worsening climate change.”

How high can gas prices go?

“The US is not a major consumer of Russian crude oil, which makes up less than 4 percent of US consumption, so banning imports shouldn’t have a huge effect; the US doesn’t import any Russian gas. The US can make up the oil gap with imports from other countries, and the Biden administration already is pursuing that path by opening talks with Venezuela. Nor is Russia all that reliant on the US, because US purchases account for about 9 percent of its exports.

The bigger impact on the price of oil comes from what Biden’s announcement portends. Global oil prices have been fluctuating wildly in recent days, reflecting that there is a wide range of uncertainty over what could happen next. One of the uncertainties is whether more countries will follow the US’s move to ban imports, taking Russian oil off the table for a number of foreign markets. Cutting out Russia makes oil more expensive, because it upends the existing network of pipelines and makes countries’ paths to getting oil longer and more expensive.”

Putin Has a Big Piece of Leverage Over Europe. Here’s How to Take It Away.

“Europe does not need to be this reliant on Russian gas. A look back at the last 20 years reveals a series of decisions — notably by Germany, but also by decision-makers across the continent — that created the present-day vulnerability. While some of these choices can’t be undone, Europe can still learn from history to reduce its vulnerability to energy-market manipulations driven by geopolitics. Just as the United States during the 1970s invested in emergency oil reserves to insulate itself from the effects of Middle Eastern oil embargoes, Europe should do the same with natural gas. The lesson of that era is that it’s not just the amount of energy supply that matters; countries also need to invest in resilient systems to fall back on when a crisis occurs.

What’s more, energy security doesn’t have to come at the price of climate goals. Contrary to what some commentators have suggested, this isn’t the time for Europe to revert back to its own fossil fuels. Instead, by continuing to invest in renewable energy while prioritizing a system that can withstand shocks, Europe can do both: keep phasing out fossil fuels and weaken Russia’s hold over its foreign policy.”

“Three critical decisions in recent years made Europe dependent on natural gas and, therefore, vulnerable to Russian machinations. The first was Germany’s momentous decision to phase out its nuclear reactors in the wake of the 2011 Fukushima disaster. Eliminating nuclear energy, which does not emit greenhouse gases and has an impeccable safety record in Western Europe, put enormous pressure on the rest of Europe’s energy supplies. Had this choice not been made, Europe’s energy system — which includes the electrical grid but also other components, like the energy used to heat buildings and fuel transportation — would be less dependent on imported natural gas.

The second key set of decisions, by Germany and the EU, was to allow the Nord Stream 2 pipeline to be built. The natural gas pipeline, which connects Russia to Germany directly, is not yet operational, and the German foreign minister has explicitly threatened to block it if Russia invades Ukraine. Still, Scholz has yet to say the same, and Nord Stream 2 has some powerful backers, including former Chancellor Gerhard Schröder, who sits on the board of directors of multiple Russian oil and gas companies. Anticipating the pipeline’s completion, the rest of the German system has made investment and planning decisions that curtail the amount of other energy available.

Germany’s moves took place as the EU was trying to lower the cost of gas by increasing market competition. One tactic was to make it easier for global suppliers to compete by favoring “spot markets” with tradable contracts over long-term, fixed contracts. As intended, the policy lowered the average cost of energy in Europe. The unintended side effect, however, has been to make the natural gas system more fragile and vulnerable to manipulation.

The third key decision was a failure across Europe to invest sufficiently in natural gas storage and pipeline interconnections that could serve as a buffer in the event of an emergency. Storage tanks and pipelines can hold reserve energy to make up for a shortage, while pipeline interconnections can resolve shortages in some parts of the system by temporarily flowing natural gas from others. Both are expensive to build and maintain, though. True, some real progress has been made increase interconnections, as energy expert Andreas Goldthau points out. But the system remains vulnerable in case of emergency: In mid-December, Europe had roughly 690 terawatt-hours of gas stored, but one analysis suggested that under certain conditions such as an extreme winter, it could need more than twice that amount. (Fortunately, this winter has been relatively mild so far.)”

“It is true that the gradual transition from fossil fuels to wind and solar creates more demand for “bridge fuels” like natural gas or nuclear power. But energy security is not at odds with climate ambitions, so long as a country invests in sufficient emergency supply capacity to ride out potential market manipulations like Russia’s.

How do we know that gas vulnerability could be solved this way? Because the same thing happened with oil in the 1970s. Then, the West was vulnerable to oil embargoes, just as Europe’s gas supply is vulnerable now. Before 1973, oil-exporting petrostates regularly used embargoes or boycotts to try to coerce target countries to make geopolitical concessions, with varying degrees of success, as I discuss in my book Partial Hegemony. But after the massive disruptions of the 1973 oil crisis, the United States and Western oil consumers got serious about oil storage. The United States created the Strategic Petroleum Reserve, which still exists — in fact, the Biden administration released oil from these reserves to ease an energy crunch in the fall. Japan, Germany and the other members of the International Energy Agency (IEA) also created oil reserves in the 1970s and agreed to coordinate with the United States on how to use them. The effects were dramatic: Petrostates immediately stopped trying to enact embargoes, and major oil consumers have not faced import shortages ever since.”

Ukraine crisis prompts Germany to rethink Russian gas addiction

“Behind the rude awakening on energy security lies an even more unsettling realization for many German elites: That a decades-long goal of bringing Berlin and Moscow closer together through mutually beneficial trade seems to have failed.”

“The idea that growing trade links with other nations would help to gradually embed Western democratic standards in those countries has already taken a hit when it comes to China, which has only become more and more repressive despite growing economic links. Still, leading German politicians have long held out hope that “Wandel durch Handel” might still work with Russia, and defended Nord Stream 2 as a tool to also influence Russia for the better.
“Obviously, this policy has totally failed when it comes to Russia,” said Marcel Dirsus, a non-resident fellow at the Institute for Security Policy at Kiel University. He argued that instead of influencing Moscow by making Russia more dependent on Germany, the policy had the opposite effect.

“Right now, when push comes to shove, Berlin is dependent on Moscow when it comes to energy, and that influences the way it positions itself,” he said, referring to Berlin’s initial reluctance to include Nord Stream 2 in potential sanctions against Russia in the case of further aggression against Ukraine.

It took weeks of internal bickering and harsh international criticism before Scholz’s Social Democrats agreed to put the pipeline on the sanctions table.

“Now, they are coming to this realization [that they are too reliant on Russia] and now they are also admitting it in public, but now it’s too late,” Dirsus said.”