Why Ukraine war should turbocharge US transition to renewable energy

America is in a bind as oil and gas prices shoot up but it cannot afford an energy U-turn or to consider deals with its adversaries in Opec. Its only real choice is to complete its move to green energy

Joshua Jahani

Published: 3:30am, 25 Apr 2022

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The war in Ukraine has laid bare the West’s overdependence on Russian oil and gas. Yet, simply trading Russian oil for that produced in Iran or Venezuela is self-defeating; we are simply storing up geopolitical issues for later.

Russian President Vladimir Putin has many Nato nations in a vice. Indeed, most European countries remain addicted to Russian energy. For US President Joe Biden, simply increasing drilling projects at home would be untenable, given the green rhetoric of his election campaign.

The only way for the United States to strengthen its hand at the negotiating table is to complete its transition to renewable energy and detangle itself from the web of dependency spun by hydrocarbons.

The US is at the forefront of the international drive to wean off Russian oil and gas. The cost of living and pump prices have escalated at home after Biden ordered Russian imports to be stopped immediately following the invasion of Ukraine.

The move has exacted a heavy cost on American people and businesses, and forced Biden to go cap in hand to Opec for more oil.

But few in the oil-producers’ cartel were willing to open up their taps while energy prices continue to rocket and their own economies struggle to recover from the Covid-19 crisis. Their response to his plea was predictably short and sweet: if the US wants more energy, it should increase its own production.

01:53

Washington bans Russian oil and gas imports over Moscow’s invasion of Ukraine

The truth is that Biden’s stalling domestic energy policy has reduced his influence over Opec. By continuing to cede control, Biden finds himself in a dangerously untenable geoeconomic position.

Even if Opec were to play ball, it would mean the US doing deals with the enemy and putting the power back in the hands of autocrats – exactly what Biden sought to avoid by shutting off Russian supplies. Becoming reliant on countries such as Iran, Saudi Arabia and Venezuela would significantly weaken America’s hand at the negotiating table.

Getting into bed with such adversaries would give them leverage when it comes to easing sanctions or compromising on human rights. It would risk going against everything Biden and US democracy stand for.

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Oil prices skyrocket around the world as result of Russia-Ukraine conflict, sanctions

That leaves Biden with only two viable options: increase domestic oil drilling projects or turn completely to renewable energy. The first is a non-starter – it would represent a dramatic U-turn on Biden’s decision to halt new oil and gas drilling on federal lands this year.

He would also have to tear up plans for a clean energy grid by 2035 and massive investments in electric vehicles and infrastructure to achieve net zero carbon emissions by 2050, all part of his ambitious US$2 trillion green investment plan.

The only way to save face and maintain geopolitical influence, not to mention the support of the Democratic Party, while ensuring America’s political enemies hold as little sway over it as possible, is to turbocharge the transition to renewable energy without delay.

War is forcing world towards greater food and energy sustainability

The switch won’t happen overnight. Biden needs to engage with and encourage the private sector to drive this green revolution. The key is to put the right investment and infrastructure in place, and establish a sustainable recovery task force of business leaders to work alongside the federal government.

Just as the Industrial Revolution ushered in the use of coal and steam in the 1750s and 1760s, we are at a critical tipping point. With the clock ticking on global warming, the move to cleaner and greener energy has never been more urgent, as shown by the Intergovernmental Panel on Climate Change’s latest, stark findings.

Renewable energy is increasingly affordable as the cost of solar power technology has plummeted in recent years. Meanwhile, green investment is rising, with companies setting net zero emissions targets and being held to account over their environmental, social and corporate governance programmes, with private equity backing doubling in the past 18 months alone.

If the US is to strengthen its position as a superpower in the face of growing Russian aggression and in an increasingly hostile and divided world, it must act now to solve the looming energy crisis.

The Ukrainian conflict cannot derail America’s transition to renewable energy. If anything, the war has shown just how acute the need is to detangle ourselves from the global hydrocarbon market.

Joshua Jahani is a lecturer at Cornell and New York University and an investment banker