Q&A – Environmental Impact of Russian Oil vs US Oil
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Bottom Line: Today’s note comes on the heels of my coverage Friday of the Biden administration's energy policy of limiting the US harvesting and distribution of energy in lieu of becoming reliant on Russian energy. Here’s a recap from Friday’s Top 3 Takeaways...
Under the Biden administration petroleum imports into the United States have risen by greater than 400%. Under the Trump administration Russia wasn’t even a top ten energy trader with the US. According to the most recent government reporting – Russia is currently the 3rd leading supplier of US energy – having recently passed Saudi Arabi for that distinction. It’s not only aiding Russia while screwing Americans through high inflation its worse for American companies, would-be American employees and the environment as well. It should be easily understood that the decision to limit US energy while importing more from Russia inhibits the profit opportunities of American companies and limits the job opportunities for Americans. Instead, we’re paying for Russian profits and Russian jobs. But there are other related consequences. The energy industry in the United States pays the highest effective corporate tax rate of any industry. By limiting US production we’re also limiting corporate tax revenue. The average job in the sector pays greater than $68,000. That’s well above the national average – which means Biden’s limiting high paying job opportunities. Those job opportunities which would also result in taxes paid by those earning those salaries, money which would be spent to support local communities and the overall US economy generally. But there’s also another huge dynamic that I’ve never once heard discussed. The environment. The excuse used by President Biden to inhibit domestic energy is the environment. There’s only one problem with that rational. His policy is far worse for the environment. How is that the case? What does it take to replace US energy with Russian energy? A whole lot of additional energy to transport it from Russia to the US. Importing energy from outside the US creates a far larger carbon footprint than harvesting energy domestically. That’s the injury to the insult of this pathetic virtue-signaling.
Today’s submission looks to expand upon those realities. In addition to the obvious environmental inefficiencies of transporting oil from Russia to the US as opposed to harvesting it here – there's the other environmental story to be told. The differences between how oil is allowed to be harvested here as opposed to Russia. So how are they different? What is the difference in environmental impact between the two? It’s considerable.
Russia doesn’t exactly have an EPA looking over the shoulder of its energy producers or any industry for that matter. This is to say that environmental standards for all industries is below that of ours in the United States. Due to the variances in harvesting oil based upon geography (with different methods used in different places both in the US and Russia), there’s not a clear apple to apples way to empirically compare the two. But what there is, is an overall picture which we can derive based on a recently conducted study of environmental policy of all countries by Yale’s Center for Environmental Law & Policy. According to the study measuring and comparing environmental standards on a 100-point scale the United States ranks 27th in the world, with a 71.19 score (Denmark leads the world with an 82.5). Russia’s far from the worst environmental offender in the world (that’s India with a paltry 9.3) but they’re well down the list from the United States – ranking 52nd with a score of 63.79. What’s that mean in the context of today’s question?
Generally speaking, whatever Russia does, is with a greater than 10% bigger environmental impact than what we do in the US. This means that the environmental impact of every barrel of oil harvested there is at least having a 10% worse environmental impact than a like barrel harvested in the United States. And that’s prior to the increased carbon footprint required to get oil from Russia, or anywhere from overseas for that matter, to the United States. The only significant energy producer with a higher environmental rating than the United States is Canada – which ranks 25th in the study. It can be evidenced that maximizing domestic energy production and prioritizing Canadian imports of energy is the most environmentally sound policy possible. Instead – Biden killed the Keystone XL Pipeline – connecting Canadian energy to the US - his first day on the job in addition to limiting the harvesting in the US causing reliance on countries like Russia who are far less environmentally sound in their harvesting.
Notably, a 2017 Congressional report found the Russian government is a top funder to US environmental groups attempting to limit or ban US energy production – Natural Resources Defense Network, Sierra Club and Climate Action Network. They did this knowing that limited US energy production would equal higher prices and more Russian oil being purchased. Joe Biden has given them exactly what they paid for which also shows the hypocrisy of these environmental activist organizations as they’ve pushed for policies which are demonstrably worse for the environment as I’ve just evidenced. There are two sides to stories and one side to facts. These are the facts.