Biden bans Russian oil imports; Cassidy calls for an operation warp speed for U.S. oil production

Published: Mar. 8, 2022 at 6:26 PM CST
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NEW ORLEANS (WVUE) - As President Biden bans Russian oil imports, Sen. Bill Cassidy, R-Louisiana, urges Biden to take steps to increase domestic oil production.

In a nationally televised address, Biden announced the ban.

“Today, I’m announcing the United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at U.S ports,” said Biden.

The Honorary Consul to Ukraine in Louisiana reacted swiftly to the added U.S. punishment for Russia over its invasion of Ukraine, an independent country.

“We applaud it, it was overdue. I think that we could have taken this step earlier but obviously, we think it’s a great step forward. Unfortunately, I’m not sure that it’s going to have a major deterrent effect,” said Hayes.

Oil prices were already elevated due to the reopening of the economy as the pandemic improved and now, because of Russia’s attack on Ukraine, they are now over $100 per barrel in the U.S. and the ban on Russian energy imports will push them higher, experts say.

Professor Eric Smith is with Tulane University’s Energy Institute.

“If oil goes up to $10 a barrel, gasoline prices go up 25-cents a gallon,” said Smith.

Smith said the U.S. will need to make up for the heavy oil it was getting from Russia.

“In Louisiana, I think the major impact will be that we will be transitioning over to oil from Venezuela over the next year I’d say, which is where we got the heavy oil from to begin with,” said Smith. “I know Venezuela is probably the easiest one to fix because it’s in our backyard and we’d like to pry Venezuela a loose from China and Russia anyway.”

Biden had a message for big oil companies and banks that lend them money related to his ban on Russian oil imports.

“It’s no excuse to exercise price increases,” said Biden. “No time for profiteering or price gauging.”

Smith disagrees with the idea of possible price gouging.

“I think price gouging is a political statement, not anything to do with fact. The margins on refined products are very low to start with whether you’re a filling station operator or a refinery operator,” he said.

Smith said the U.S. was receiving over 500,000 barrels of oil from Russia a day. Some data puts the number at 672,000 barrels of oil and refined products daily.

Smith said refineries on the gulf coast use the heavy oil Russia produces.

“Something like 400,000 barrels a day of the 500,000 barrels a day comes into the gulf coast PADD 3 refineries,” said Smith. “And then the light crude that Russia was supplying to places like Hawaii and the west coast and some of the East Coast that’s going to be comparatively easier to replace because we have surplus light crude ourselves.”

Sen. Cassidy said Biden’s policies have hurt domestic oil production.

“And instead of putting Americans to work developing our natural gas and oil resources, he goes to Saudi Arabia and Venezuela begging them to produce more,” said Cassidy.

He proposes changes.

“I argue that we need an operation warp speed for domestic production of energy; a streamlined approval process to permit,” said Cassidy.

The president of the Louisiana Mid-Continent Oil & Gas Association, Tommy Faucheux issued the following statement:

“LMOGA shares the goal of reducing reliance on foreign energy sources and we’re supportive of US decisions that help support our allies abroad. Louisiana is uniquely positioned to help meet global energy demands. It’s more imperative than ever to accelerate Gulf of Mexico energy production, and we urge the Biden Administration to reverse the ban on leasing on federal lands and waters to increase domestic production. Louisiana has a critical role to play in supporting European allies and U.S. needs with access to a stable supply of reliable and affordable energy.”

Smith said the downturn the oil and gas industry experienced would require many companies to staff up and that could take time.

“We’ve spent the last two or three years under-investing, my guess is it will take two or three years of over-investing to compensate,” he said.

He was asked if gasoline prices could fall as fast as they increased.

“Theoretically they could but, in fact, what happens is they tend to get a little sticky and they go up quicker than they come down,” said Smith.

Ukraine’s president wants the U.S. Congress to back a no-fly zone to further impede Russia but so far the U.S. and its NATO allies have embraced that idea, fearing it could result in a World War.

“Yes, absolutely I think that’s a step that is critical to saving civilians,” said Hayes.

Cassidy supports Biden’s decision not to send U.S, troops to Ukraine.

“So far the president has avoided committing active American armed forces and I agree with that decision. We should not do that to Ukraine,” said Cassidy.

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