The Morning Dispatch: Much Ado About Oil

The U.S. moves to ban Russian oil imports, but Europe is unlikely to follow suit.

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Happy Thursday! It’s nice to know the last Russian diplomats remaining in DC have to drive on “President Zelensky Way” to get to work, and stare at a 60-foot-long Ukrainian flag once they get there.

Quick Hits: Today’s Top Stories

  • Despite Secretary of State Antony Blinken giving it a green light on Sunday, a potential deal to send Soviet-origin MiG-29 fighter jets to Ukraine fell through yesterday after the Biden administration balked at Poland’s request that the United States facilitate the transfer of the aircraft. Pentagon spokesman John Kirby told reporters the U.S. believes Russia may view such a transfer as “escalatory,” and that it could “result in significant Russian reaction that might increase the prospects of a military escalation with NATO.”

  • The United Nations’ High Commissioner for Human Rights reported Wednesday the number of confirmed civilian casualties in Ukraine as of Tuesday night had risen to 1,424, including 516 dead and 908 injured. The agency believes the true figures are “considerably higher,” and Russian shelling in Ukraine continued to intensify yesterday, striking a maternity hospital in the port city of Mariupol. 

  • The International Monetary Fund’s executive board approved a $1.4 billion emergency loan for Ukraine on Wednesday, citing the loss of life, refugee flows, and destruction of infrastructure that “will lead” to a deep recession this year. “Financing needs are large, urgent, and could rise significantly as the war continues,” IMF Managing Director Kristalina Georgieva said.

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  1. L Brown

    Symbolic yes and also the right thing to do. In the meantime we are moving to solar and wind (and water and nuclear) anyway. With or without government intervention. It won’t be perfect but it will be better.

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    Michael Eskridge

    Definitely symbolic. Definitely the right thing to do. Too bad there was some kicking and screaming involved which has become a Hallmark of the Biden administration.

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  3. learnin4life

    Oil prices like most commodities fluctuate based on supply and demand. In the case of oil, however, the oil bust several years ago precipitated further consolidation in the industry. As a consequence many of the smaller producers with significant leaseholds were unable to weather the downturn in prices. Big oil was able to purchase much of the reserves at relatively low cost, and unlike their now defunct smaller brethren don't have to produce the reserves to hold them.

    Market concentration in the domestic oil market affords those with sufficient cash to withhold reserves from the market to maximize ROI. There may be onerous environmental regulations now in place to limit ridiculous levels of environmental degradation, but these producers have managed to prosper since the initiation of NEPA. Entire departments are staffed to navigate every regulation on the books or being contemplated.

    My question is what specifically are critics talking about when they say things such as turn the domestic oil producers loose? I would like to see specific proposals about what must change with the current administrations approach to release the pent up supply. Most politicians echo talking points drafted by lobbyists and have little desire to dig in to details which become immediately messy and, heaven forbid, become counterfactual to their faction's argument.

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    Bada Bing

    Tina Peters looks good in yellow.

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  5. Kathy Kattenburg

    I'm really puzzled as to why people who know the ban on Russian energy imports is more symbolic than real would be glad we did it anyway.

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    Jen

    Politico has a story about Biden putting the kibosh on providing MiG jets to Ukraine. In it is this quote from Mitt Romney: "I believe there's a sentiment that we're fearful about what Putin might do. And what he might consider as an escalation. It's time for him to be fearful of what we might do."

    This is where I’m conflicted. On the one hand I think we should find a way to get MiGs to the Ukrainians and we should be providing them all the weapons, ammo and lethal intel we can. And I think the administration has been too concerned about how Russia might perceive things we might do and then we end up not doing them. At the same time is Romney’s comment basically us and Russia in a game of chicken? What exactly does Romney think Putin should be fearful of? And how does he think that would change Putin’s calculus? Does he think Putin would retreat if he thought we would put boots on the ground and in the air in Ukraine? Aside from arming Ukraine to the teeth what are our other options at this point?

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      Pat Riot

      Romney would do the same as Biden if he were the one making the decisions.

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  7. PamelaB Engelke

    Symbolic.
    Like a lot of folks from oil producing states we have had double whammies to our retirement accounts due to low interest rates and low oil royalty checks over the last several years. Mine is from a multi-generational trust from my great grandfathers Tx farm. About a third of our oil and gas wells have been capped due to low prices for WTI crude. Oil companies and oil service providers are now turning back on the spigots. The US has enough capacity in this country to absorb any loss from Russia and it’s cleaner! I support nuclear as well as wind and solar. US energy policy must welcome and include multiple types of energy. Strengthen and solidify our strategic oil importing relationships with our N. Atlantic partners-Canada and Mexico.

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    Charlie Hall

    It occurred to me that those of us who are still sane regarding economics -- that is, centrist Democrats and traditional moderate and conservative Republicans -- have a sales job to do to remind Americans about the huge benefits of free markets, free trade, and limited government intervention. It is a hard sell when gasoline prices are skyrocketing but we need to do it.

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    1. Kathy Kattenburg

      I always want to ask people who say things like this how much money they make. Don't worry, that's not a sly way of asking you. I'm not, and I don't want to know.

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    Frank Lee

    Only wealthy elites and the the foolish would demand such self-inflicted harm over useless virtue signaling symbolism.

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      Jack

      It's not virtue signaling to cut off American dollars from Putin's war chest. Yes, it won't do a whole lot, but what is important is that we're willing to make a stand against tyranny.

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        Frank Lee

        You see, this is something that irritates the crap out of me and makes me snap at my liberal friends.

        Not buying Russian oil does ABSOLUTELY NOTHING TO REDUCE FUNDS GOING TO PUTIN’S WAR CHEST. Oil is a fungible commodity. China will just purchase the oil that the US will not. Europe is not joining the US in this stupid move.

        If you were serious about cutting off funding to Putin’s war machine, and it appears you are not, you would have demanded that the Biden Administration not kill the Keystone Pipeline, not stop permits for oil and gas production on federal lands, not increased regulations on traditional energy to try and force them to use Chinese-made solar panels and wind turbines.

        You are taking a stupid virtue signaling stand that does not do a damn thing except make the elite political chattering class strut their virtue signaling feathers.

        It is fucking stupid.

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          Magpie

          "You see, this is something that irritates the crap out of me and makes me snap at my liberal friends." Liberal friends? If you have them, I hope you're much nicer to them than you are to fellow commenters on this forum.

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            Frank Lee

            Yes, I have a lot of liberal friends. And I am much nicer to them than they are to me.

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          Jack

          Sir, with all due respect I don't believe you quite understand the point I'm making.
          I understand and accept that banning Russian oil from being sold in the U.S. won't do much to reduce oil revenue going to Putin's war chest. It's more of the principle of the thing.
          Take the People's Republic of China. We could decide to completely cut off trade with China due to the genocide their government is currently committing. Regardless of whether it would do harm to the Chinese economy, it would be the 𝗿𝗶𝗴𝗵𝘁 thing to do.
          We face a similar situation with Russia. Regardless of whether it would harm the Russian economy much, cutting ourselves off from Russian oil is the 𝗿𝗶𝗴𝗵𝘁 thing to do.
          Godspeed Mr. Lee.
          Update: the edit was a grammar correction.

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            Frank Lee

            No, I understand completely. And you confirm my understanding. I know a lot of people with your views and arguments and I know it is very, very difficult to get ya’ll to see this point. It is clearly an indication of low critical thinking skills as replaced by a focus on emotive feedback. And I am sure that the pain at the pump is not impacting your family nor lifestyle in any material way.

            The move to stop buying Russian oil is absolutely NOT the right thing unless your goal is to virtue signal. First, it hurts the most vulnerable Americans with hyper inflation. Second, it does not stop the oil revenue to Putin… China will buy it. And China will just use it to dump more C02 into the atmosphere as their environmental regs are much less draconian that the US… so this hurts the environment.

            Each virtue signaling policy based on some moral feel-good “right thing to do” argument has a cost associated with it. They keep adding up. In this case they are punitive to Americans without doing anything to Putin. It is a stupid move for stupid people… generally elites that won’t feel any negative impact.


            In my community the police needed an emergency response vehicle. The liberals in charge of the city rejected a free MRAP surplus vehicle because it symbolized war and triggered them. So the city spent $400,000 in funds it did not have to buy a commercial version of a vehicle that provided the same utility. That is a similar example. The liberals would claim it was the “right thing to do”. So the city spent another $400k that it did not have and that reduced the opportunity to spend that money on other things like children’s programs… just so liberals had the luxury of feeling good in their opposition to machines that symbolized was for them and triggered them.

            Symbolism sucks. We need real solutions to real problems.

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    Ed

    QOTD: Yes and yes. We can afford it, so we should. To use the energy aspect of the question to pivot away from the war: what concerns me more is this quote: "..we’re under no illusion that every American will get an [electric vehicle] or a heat pump tomorrow or next month or next year,” Granholm continued." The idea that switching from fossil fueled appliances and vehicles to electric powered appliances and vehicles reduces carbon dioxide emissions is performative nonsense. Right now 60% of our electricity comes from fossil fuel and burning more fossil fuel is the only way to respond to fluctuating demand. It takes twice as much natural gas to boil a gallon of water by converting the gas to electricity than it does to just boil it with natural gas directly: so 200% times 60% equals 120%. If you pull out your gas stove and replace it with an electric one, you are actually increasing carbon production at least 20% plus throwing more demand on existing non-fossil fueled electrical production, some of which is going to be bolstered by..... burning fossil fuels. A similar ratio will apply to a furnace. With cars, the drop in efficiency is probably not as great and there is an unquestionable "cool" factor to electric cars, but wherever the goal is the production of heat, such as a stove or furnace, it is far better to stick with natural gas. Except for the other pollutants, even coal would be better from a carbon dioxide production standpoint. By all means, try to increase the non-fossil-fuel electricity production, but let's keep the gas stoves and furnaces until all the electricity is produced from non-fossil sources.

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