Fossil Fuel Companies Are Reaping The Benefits Of The Ukraine War

By Mel Gurtov, LA Progressive

In case you haven’t noticed, a major consequence of the Ukraine war is the bonanza it has provided for the oil and gas industry. US sanctions on Russian oil and gas have given the industry yet another reason for more drilling and fiercer opposition to environment-friendly energy sources.

Yes, a tight oil market and inflationary prices are good for electric car production. But the oil and gas industry is doing even better, not just because of high gas prices, but also because they can demand more access to public lands for drilling—and blame the administration for the high gas prices if the companies don’t get to drill more. This is a false argument on five counts.

First, the Biden administration is granting oil and gas drilling permits at a higher rate than was true under Trump. “No more drilling on public lands,” Biden had said during his presidential campaign. Drilling leases are now being offered on 80 million acres in the Gulf of Mexico alone. And this allowance was two months before Russia’s invasion of Ukraine.

Second, we’ve all learned not to expect gas prices to go down even when more gas comes on the market. That supply-and-demand argument doesn’t fit with industry promises or practice.