More oil or go green: two different paths out of the energy crisis

By Frank Jacobs & Daniel Bland - March 30, 2022 (Twitter?@Frank_J_Jacobs @DanielBlandBiz)?GlobalFleet.com - FleetEurope.com

Will the war in Ukraine make the switch to renewables harder, or more urgent? Actually: both. As shown by how differently the United States and the European Union are reacting. The U.S. has the luxury to opt for more oil. The EU sees no other alternative but to double down on going green.?

A special report by Daniel Bland in North America and Frank Jacobs in Europe.

Western sanctions against Russia, a major producer of oil and gas, have seriously driven up the price of those commodities – and ultimately also the prices of petrol and diesel at the pump.?

Only two responses are possible.?

• In the short run: find other, cheaper sources of oil and gas.?
• In the longer run: break the dependency on hydrocarbons by speeding up the transition to renewable energy.

Of course, everybody wants to do both. But the difference in emphasis between the U.S. and the EU is striking.?

U.S. bans Russian energy…

On March 8, U.S. president Joe Biden announced a ban on the import of Russian oil and gas. This is relatively painless, since the U.S. did not heavily depend on those imports.

According to figures from the U.S. Energy Information Administration, the U.S. imported just under 200,000 barrels of Russian crude oil per day in 2021 – more than twice the volume of the previous year, but still only 8% of all the oil it imports, and only 2% of the country’s overall supply.?

In fact, since 2016 the U.S. has been a net exporter of petroleum products, and since 2021, it became the world’s largest producer. So, the White House called on America’s domestic oil and gas industry to increase its production to make up the difference. However, the industry is experiencing supply chain problems and labour shortages. Plus, the types of oil the U.S. produces don’t entirely overlap with the ones it consumes.

In other words: the shortfall in supply will have to come from beyond the U.S. as well. That’s why the U.S. reached out to Venezuela – its long-time foe in South America – with the aim of re-establishing diplomatic and economic relations.?

Venezuela is a major oil producer, and back in 2008, the U.S. imported more than a million barrels of Venezuelan oil per day. Due to U.S. sanctions, that has been reduced to zero – but given Biden’s outreach to Venezuela, that could soon change.?

… but Europe does not

Europe’s dependency on Russian oil and gas is much greater than America’s, and as a result, it’s an addiction that is proving much harder to break – for both parties.?View more here...