As US looks to Venezuela for oil, has Biden missed an opportunity to go green?

Oil crisis: Has Biden missed an opportunity to go green?
7 min read
31 March, 2022
Analysis: As the Russian invasion of Ukraine reveals the precarity of the global energy market, the US is looking to diversify its energy resources through untapped sources, such as Venezuela. Is this a good long-term solution?

As oil prices spike around the world in response to the war in Ukraine, many see this as the right moment to push countries towards energy independence to shelter themselves from the highs and lows of the international market. Oil companies and crude exporters, however, see this as an opportunity to make up for lost profit from two years of the pandemic.

Will world leaders rise to the occasion to make good on their promises to transition to an independent, renewable and sustainable energy plan? Or will they fall back on their habits of relying on traditional exporters?

“Globally when the pandemic hit, oil prices dropped dramatically. Oil companies and OPEC countries lost a lot of money. For them, higher oil prices today is a way for them to make up for lost revenues,” Fadhel Kaboub, associate professor of economics at Denison University, told The New Arab.

“They’re working on two fronts: to crush the climate change movement and to say you can’t live without us: this is the time you need more oil and gas. They want you to feel it. They’ve been saying the world can’t transition.”

"In the US, where the inflation rate is currently the highest it has been since the 1980s, soaring energy prices have prompted President Joe Biden to cosy up to Venezuela for its oil exports"

Is Venezuela the answer?

In the US, where the inflation rate is currently the highest it has been since the 1980s, soaring energy prices have prompted President Joe Biden to cosy up to Venezuela for its oil exports. In the first trip of its kind in decades, three white house officials went to Caracas to discuss US alternatives to Russian energy and try to draw Maduro further from Russia. 

The reactions from both sides of the aisle were negative, but for different reasons. While the right didn’t want to see the US engage with a leftist authoritarian government, many progressives didn’t want to see more oil extracted anywhere in the world at the expense of moving toward renewables.

“Joe Biden using #Russia as an excuse to do the deal they always wanted to do anyway with the #MaduroRegime,” tweeted Republican Senator Marco Rubio on 6 March. “Rather than produce more American oil he wants to replace the oil we buy from one murderous dictator with oil from another murderous dictator.”

Since President Joe Biden announced a ban on US imports of Russian oil and gas on March 8, 2022, prices have skyrocketed. [Getty]
Since President Joe Biden announced a ban on US imports of Russian oil and gas on March 8, 2022, prices have skyrocketed. [Getty]

On the other hand, in a column for Common Dreams, Juan Cole, a history professor at the University of Michigan, says that now is the time for Biden to “do something practical to make it less likely that Putin can survive, or can be the leader of a medium power on the world stage if he does, he should frame the green energy transition as emergency legislation needed to combat the Russian oil and gas giant.”

An MSNBC column suggested that Biden was falling into a trap set by the previous administration, in which America’s hypocrisy of its thirst for oil will be exposed.

“A short-term fix with Venezuela might lower gas prices but it also exposes America’s self-interest. And it will give Republicans the easy fodder to prove that the Biden administration is just as ‘socialist’ as Maduro,” wrote podcaster Julio Ricardo Varela.

The administration’s meeting earlier this month to Venezuela following three years of a diplomatic freeze was a clear sign of just how dependent the world, including the US, still is on fossil fuels, despite decades of planning to shift to renewable energy.

Analysis
Live Story

A general dependency on oil exporters

This dependency might also help explain Biden’s continued commitment to re-entering the Iran nuclear deal. If Iran, one of the world’s top oil producers, could get back into the Western oil market, this has the potential to provide an alternative energy source and bring down prices.

“From the US perspective, getting the nuclear deal is important. It brings Iranian oil and gas back into the global economy. The US is already trying to restart the Venezuelan oil industry,” says Kaboub.

“But you can’t just flip a switch. Once you shut down an oil well, it’s hard to restart it. In the pandemic, oil prices went negative, oil companies didn’t want to stop pumping because they didn't want to run out of storage capacity,” Kaboub continued.

There have been similar overtures to other major oil producers. Biden’s meeting in January with Qatar leader Sheikh Tamim bin Hamad Al Thani was widely seen as a signal that the US wanted to show Russia that the world had alternative options to its natural gas exports, a problem of European dependency that Russian President Vladimir Putin was likely counting on when he invaded Ukraine.

"Biden’s futile attempts to reach out to Saudi Arabia earlier this month, following the OPEC+ meeting (which includes Russia) in which some of the world’s top oil exporters declined to reduce prices, shows the largely unchecked power of OPEC"

Similarly, Biden’s futile attempts to reach out to Saudi Arabia earlier this month, following the OPEC+ meeting (which includes Russia) in which some of the world’s top oil exporters declined to reduce prices, shows the largely unchecked power of OPEC, whose price hikes in the late 1970s were supposed to teach the world a lesson about the danger of relying on a handful of countries for their energy exports.

Instead, the world came out of the 1970s oil shock with only minimal changes, such as more fuel-efficient cars. This time, several US states have set goals of moving to all-electric vehicles within the next 10-20 years, an important move that only addresses a fraction of what is needed to become carbon neutral.

Europe fares better

It appears that Europe is doing much better than the US in working toward its renewable energy goals, not to mention its already environmentally friendly infrastructures, such as electric trains, bike lanes, and widespread car charging stations.

“The effort to reduce greenhouse gases in Europe will be dramatically increased. Germany, France and Poland have already announced that their plans will be accelerated by about five years. China is also serious about its transition. I think once you have two economic blocs on the planet doubling down on their transitions, it becomes irreversible,” Henning Gloystein, director of energy, climate and resources at Eurasia Group, tells The New Arab. 

Analysis
Live Story

Even with European countries making major pushes to transition quickly, he acknowledges any change won’t happen overnight, which is how the oil producers have been able to set the current high prices, and which could continue for some time, as energy importers figure out their transitions to renewables and energy diversification.

While Europe is generally ahead of the US in its energy transition, it also appears to be falling into a similar pattern of importing – this time largely renewables – from dictatorships.

A recent article in Jacobin points out recent contracts between European and North African countries, where large-scale green projects are displacing poor communities and could also make Europe susceptible to another form of dependence from a foreign energy exporter.

"If history is any indication of the trajectory of the current oil crisis, it is likely that there will be minimal comprehensive, long-term changes, but there will be a modified status quo"

Can the world move away from fossil fuels this time?

If history is any indication of the trajectory of the current oil crisis, it is likely that there will be minimal comprehensive, long-term changes, but there will be a modified status quo.

Whether it’s turning to Venezuela, Iran, Qatar or Saudi Arabia, as long as the US and Europe continue to lack the political will to transition to green energy and reach energy independence, they will continue to be dependent on oil producing nations, and will have the same unappealing options with every energy crisis.

“We have an episode that should have taught us something,” says Kaboub. “But here we are back to square one.”

Brooke Anderson is The New Arab's correspondent in Washington DC, covering US and international politics, business, and culture.

Follow her on Twitter: @Brookethenews