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U.S. sanctions on Russian oil have Texas producers ready to up production. Environmentalists fear it’s at the expense of reducing emissions longterm.

 In this Thursday, April 30, 2020, photo a refinery along the Houston Ship Channel is seen with downtown Houston in the background.
AP Photo
David J. Phillip
In this Thursday, April 30, 2020, photo a refinery along the Houston Ship Channel is seen with downtown Houston in the background.

We're in what some have called a nightmare scenario for consumers in the U.S. and European Union. Inflation was already driving prices up, and now Russia's war against Ukraine has caused the U.S. to sanction Russian oil, making prices rise even higher.

The perceived disruption to Russia's oil supply to the global market has sent oil prices higher than $100 per barrel, causing prices at the pump to shoot up around $4 per gallon in Texas, according to AAA.

Domestic oil and gas producers say now is their time to shine — that investment in oil and gas drilling will lead to increased energy security for the United States.

“The industry has already taken significant and meaningful steps to unwind relationships, both with respect to assets in Russia, as well as imports of Russian crude oil and refined products,” said Mike Sommers, president of the oil and gas trade group American Petroleum Institute, in a statement. “We share the goal of reducing reliance on foreign energy sources and urge policymakers to advance American energy leadership and expand domestic production to counter Russia's influence in global energy markets.”

However, environmental groups and climate action advocates say companies are just exploiting the situation for their own profits, and that instead, real energy security will come if companies rapidly speed up the transition to renewable fuel sources.

"If we’re going to meet the goals that the International Energy Agency and the IPCC (Intergovernmental Panel on Climate Change) have explicitly stated, that are part of the Paris Accord regarding climate change," says Jeffrey Jacoby, deputy director for the Texas Campaign for the Environment, "then we cannot exploit the fossil resources that are in the ground, particularly in the Permian Basin. If we’re going to dramatically impact the climate in ways that we need to, then we just cannot continue to be reliant on fossil fuels."

Scientists say that to avoid the most catastrophic impacts of climate, which requires keeping global warming to 1.5 degrees Celsius above pre-industrial levels, the majority of oil and gas reserves need to stay in the ground.

Still, even the Biden administration, which is often at odds with the oil and gas industry over climate policy, has been pressuring producers in places like the Permian Basin in West Texas to ramp up production to fill the void. The U.S. previously imported nearly 700,000 barrels of crude oil and refined petroleum products from Russia each day, according to the Energy Information Agency.

However, the industry says regulations put in place by the Biden administration are hindering its ability to quickly increase output.

"Some of the slowdown is the idea that there’s been more regulation so far, and less permitting," said Jeffrey Whittle, co-chair of the energy and natural resource industry sector for law firm Womble Bond Dickinson in Houston. "In times where the geopolitical things are so dynamic, I think the oil and gas companies are calling for a little less regulation, to allow more permitting, to allow them to produce more and explore more, and get things more efficiently to the market."

Despite that, Whittle said companies are preparing to increasing output, which he predicted would bring more oil and gas jobs as well as investment into the industry.

The disturbance in the market can actually help companies transition to net-zero emissions, he added — increased profits due to high oil prices could be invested in renewable and other clean energy projects.

However, Jacoby with the Texas Campaign for the Environment said increasing drilling and other oil and gas infrastructure may not have the desired effect of driving down consumer prices in the short term, and instead will lock the next generation into using oil and gas for energy.

“Make no mistake,” Jacoby said, “in the history of the fossil fuel industry, they have taken every opportunity that they possibly can to exploit pain points amongst consumers for their own private gain.”

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