- Energy independence can protect the US from future inflation, Heather Boushey, a member of Biden's Council of Economic Advisers, said.
- The Russia-Ukraine conflict and related sanctions have pushed US gas prices to record highs.
- Shifting to clean-energy independence can create "real economic security," Boushey said.
Soaring gas prices and the Russia-Ukraine conflict are giving Biden's clean energy agenda an unexpected boost.
Prices for crude oil, natural gas, and coal have surged as supply-chain bottlenecks and weak production leave markets starved for more supply. The breakneck inflation slamming energy commodities only worsened in recent weeks as the Russia-Ukraine conflict and Western sanctions rattled markets and sparked new fears of shortages. That's led to record-high gas prices and forecasts of even stronger inflation to come.
On Tuesday, President Joe Biden announced a new ban on US imports of Russian energy goods. The move marked a major escalation of the US's sanctions against Russia, but immediately lifted crude oil prices and exacerbated fears of higher gas prices.
It doesn't need to stay that way, Heather Boushey, a member of the Biden administration's Council of Economic Advisers, said Wednesday during a virtual event hosted by Axios. The US can weather the short-term storm by tapping its oil reserves and ramping up domestic production, but those are only temporary solutions to a longer-lasting issue, she said.
"Even as we in the short term deal with these price changes, we have to make sure that we get that kind of clean energy independence because that's going to create real economic security for families in the decades to come," Boushey added.
Boushey's comments echo Biden's call for more renewables when he announced the US's ban on Russian oil, natural gas, and coal. Easing current environmental regulations to hike oil production "will not lower energy prices for families" or present a lasting solution, Biden said in a Tuesday press conference, adding the oil embargo "should motivate us to accelerate the transition to clean energy."
"Transforming our economy to run on electric vehicles powered by clean energy with tax credits to help American families winterize their homes and use less energy, that will help," Biden said. "If we do what we can, it will mean that no one has to worry about the price at the gas pump in the future."
To be sure, the short term is sure to bring fresh pain to Americans at the pump. While down from Tuesday's decade-high price, West Texas Intermediate crude is still trading at historically elevated levels. It's looking "increasingly likely" that oil can bounce to $150 per barrel, Mark Zandi, chief economist at Moody's Analytics, said Tuesday. That could translate to an average US gas price of $5 per gallon, far higher than the country has ever seen, Zandi added.
The US can weather the storm for now. The country has the capacity to meet its own fossil-fuel needs, but Russia remains an "important oil and gas producer," Boushey said. Weaning the US off of other countries' fossil fuel exports doesn't just support energy independence, but also shields the country from price swings in the global market.
"So long as we are dependent on fossil fuels, we will be subject to these global volatile prices that you see in fossil fuel prices, just like we are right now," Boushey said.
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