The NPR Politics Podcast - Biden Bans Russian Oil Imports

Episode Date: March 8, 2022

The symbolic move was accompanied by an acknowledgement from the president that gas prices are likely to keep rising. Nominally at an all-time high, gasoline prices remain well below their 2008 peak after adjusting for inflation.This episode: White House correspondent Tamara Keith, White House correspondent Scott Detrow, and chief economics correspondent Scott Horsley.Connect:Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Subscribe to the NPR Politics Newsletter.Find and support your local public radio station.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hi, this is Sheila, and I'm calling from Holland, where I've lived for four months now. It's beautiful and quaint here, with tons of bike paths and great beer. The best part is, I'm only three hours from my old friends in Detroit, because I'm in Holland, Michigan. This podcast was recorded at 2.07pm on Tuesday, the 8th of March. Things may have changed by the time you hear it, but I'll probably be on my bike headed to the nearest brewery. Okay, here's the show. We've got all these like bait and switch timestamps now. It's the new trend. You know what? I like this trend. I'm going to stick with it. Give us more bait and switch timestamps, people.

Hey there, it's the NPR Politics Podcast. I'm Tamara Keith. with it. Give us more bait and switch timestamps, people. Hey there. It's the NPR Politics Podcast. I'm Tamara Keith. I cover the White House. I'm Scott Detrow. I also cover the White House. And we are joined by another Scott, Scott Horsley, Chief Economics Correspondent for NPR. Hey, Scott.

Good to be with y'all. Welcome back. So President Biden announced today that the U.S. would ban imports of Russian oil and gas. This is a step that we're taking to inflict further pain on Putin. But there will be cost as well here in the United States. So Scott, and I guess this is to both of you, explain what this ban means in practical terms for the U.S. As I understand it, the U.S. does not actually import that much oil from Russia. That's right. So in practical terms, this will have very little impact on the supply of oil

coming into the U.S. We weren't importing a lot of oil before, and we'll go from importing little to importing none. This does come, though, at a time when world oil markets have been roiled by the prospect of limits on Russian oil exports. Russia is a big player in the world market, even if they're not a big player here in the U.S. And that's why we've seen a big surge in crude oil prices and the price of gasoline. So it isn't a huge amount of oil coming into the U.S. It's not a huge amount of oil that won't be bought from Russia by the U.S. So Scott, why, Scott Detrow, why do this now? I think a couple big symbolic reasons, important reasons. I'm not minimizing by saying symbolic, but there's symbolism here. The first

is that Biden has made a clear choice that he obviously does not want to have a direct military engagement with Russia. So his strategy is to unite the world in crushing off Russia's economy, in isolating it in a way that has not been seen since the Soviet Union. That appears to be working today. McDonald's said it was closing its stores in Russia. You know, it's like, does this show how far that's gone? Well, and McDonald's in Russia was a big deal for a time. That's right. I mean, it was such a sign that, you know, the wall had come down, that Russia was entering the Western world. And obviously, a lot has happened since the Soviet

Union fell. And in a lot of ways, the country is back in the mental space that it was during that time over the last few weeks, which has been remarkable. But the point is this, those sanctions had not touched the biggest part of Russia's economy, which is its oil and gas production. And that's because Western Europe relies so much on Russian oil and gas, natural gas especially. And for as tough as the EU and NATO allies have wanted to be on Russia, they didn't want to go there because that would really destroy their economy and freeze their people. So Biden is escalating the seriousness here, saying he is ready to take on the energy sector of Russia, even if allies aren't. And there

was also just a ton of pressure on Biden to take this step from Volodymyr Zelensky, who urged American lawmakers when he spoke to them over the weekend to urge the president to do this. And you saw Congress, Democrats and Republicans fast tracking a bill that would do just this. So Biden really kind of didn't have a choice in the way. But I think this is also a natural progression as the horrors of what Russia is doing in Ukraine increase. Biden is increasing the pressure he's putting on that country. And it's not clear that, you know, European countries who are more dependent on Russian energy exports are going to follow the president's lead here. But already you're seeing the private sector respond. You're seeing tankers refusing to carry

Russian oil. You're seeing banks refuse to finance the purchases of Russian oil. So there has been a sort of de facto boycott of Russian oil that goes beyond this modest step that the Biden administration's announced. And again, that's one reason we're seeing a spike in oil prices, and that's trickling down to the gas pump. I want to turn to, I guess it's domestic politics, but there's something particular that stood out to all of us on the team, on the podcast team, from President Biden's remarks today. I'm going to do everything I can to minimize Putin's price hike here at home. In coordination with our partners, we've already announced that we're releasing 60 million barrels of oil from our joint oil reserves. Half of that 30 billion, excuse me, is coming from the United

States. The phrase that stands out here is Putin's price hike. So Scott Horsley, I think you've explained this already, but it's the instability that has led to the pain at the pump. Sure. And the instability is a result of Vladimir Putin's invasion of Ukraine. So ultimately, the most recent run up in prices, the real spike we've seen in gasoline prices in recent days, is very much a result of Putin's actions and the world's response to it. Now, that said, we were already seeing rising prices at the gas pump even before Russia invaded, and that's mostly because demand for gasoline has bounced back from its trough during the pandemic and supplies have not bounced back as quickly. That is clearly a political liability for the Biden administration because right or wrong, Americans pay an awful lot of attention to gasoline prices. There's a huge outsized political fallout when gas prices jump, and especially when they jump over $4 a gallon, which they

haven't done since 2008. We should say, adjusted for inflation, gasoline is still cheaper than it was in 2008. And gasoline is really a relatively small part of the average household's budget. I don't mean to minimize the pain that high prices cause, but the political reaction is all out of proportion to the actual impact on household budgets. That's a sad fact that the Biden administration just has to deal with. I get what you're saying sort of objectively, but emotionally or whatever it is, when I went on Sunday and filled up the tank of my minivan and the price was $4 a gallon, it was shocking. Because the last time I filled up, it was $3.60 a gallon or something dramatically lower.

And then to go look at the AAA website and see that today, the average price of a gallon of regular is $4.17, that's an even bigger number. Absolutely. And I gassed up this weekend too. And I gassed up in between two different trips to the grocery store. And I paid much more attention to the price of gasoline than I did to any of the groceries that I bought at the grocery store. That's just the way people are. The gasoline price is in two foot high numbers on the side of the road there.

So you notice it. And of course, prices at the grocery store are up too. So everyone is sort of in this funk about inflation. And this new spike tied to the war in Ukraine just adds to that political challenge for the White House. All right, we are going to take a quick break. And when we get back, more on the politics of oil. And we're back. And we already talked about the pressure that President Biden has been under because of high gas prices. And you hear from Republicans saying, this crisis means that, you know, reopen the Keystone XL pipeline, do all of the things,

drill, drill, drill. But this is a bit challenging for President Biden, who had had made this pledge of net zero carbon emissions by 2050, who is like all in on electric cars at the same time that right now there is a fuel shortage, a challenge. Yeah, and at a moment where his climate agenda continues to be stalled in Congress and where the big steps that he would take with the EPA, there's a question of whether the EPA will have that power by the time the Supreme Court rules on a case related to that by the end of the spring. So this is a very perilous moment for climate policy at a time when every scientist paying close attention to this says, if action isn't taken in the immediate, immediate future, it's maybe too late to head off the absolute worst case scenario. So in that moment,

Joe Biden, who runs on this ambitious climate policy, is giving this defensive speech today, basically touting just how much oil America is producing right now. Companies in the United States pump more oil during my first year in office than they did during my predecessor's first year. We're approaching record levels of oil and gas production in the United States, and we're on track to set a record oil production next year. And he did follow that, saying, you know, like, if you pass clean energy policies, like the, you know, hundreds of billions of dollars that he's pushing right now, that would alleviate the ebbs and flows of relying on the global oil market that would make the energy picture more stable. But it seems in the immediate short term, the pressure will be to

drill more, to try to make oil more available, in short, the exact opposite of where he wants the country to be by the end of the decade. Look, if the price of gasoline were $2 a gallon or $5 a gallon, the oil lobby would be pushing for more access to federal lands, to reopen the discussion of the Keystone XL pipeline, to open up offshore areas for more drilling. That wish list is always going to be there. But the fact is, you're going to hear both sides talking about energy independence. For the fossil fuel lobby, that means drill, baby, drill here in the United States. For the green energy people, that means wean the United States off of fossil fuels altogether. So both sides will

be talking about energy independence, but they mean very different things by that. And you're also seeing this interesting diplomacy from the Biden administration right now, where they are reaching out to countries like Saudi Arabia, Qatar, the United Arab Emirates. There was a delegation of American officials in Venezuela talking to a repressive government that the U.S. doesn't even officially recognize about possibly changing things around so that Venezuela could get more oil on the international market again. So you're seeing the White House try everything it can to get more oil into the world market, expecting a long-term isolation of Russia's economy. All right. Well, we are going to leave it there for now, but there is much more to follow going ahead. Scott Horsley, thanks for being with us.

Good to be with you. We will have you back really soon. I'm Tamara Keith. I cover the White House. And I'm Scott Detrow. I also cover the White House. And thank you for listening to the NPR Politics Podcast.