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Why does the U.S. put the price of gas above Ukrainian lives?

Apr 10, 2024 | Editorials, Featured

Russian refinery struck by drones

Marco Levytsky, Editorial Writer.

After almost five months of partisan bickering over US President Joe Biden’s proposed spending bill, which includes $60 billion in military aid to Ukraine—90 percent of which will be spent in the United States manufacturing weapons—it looks like there finally may be some light at the end of the tunnel.

Mike Johnson, the Republican speaker of the House of Representatives, who bears the greatest responsibility for holding up such desperately needed aid, told Fox News on March 31st that he wants new Ukraine aid approved “right now” and suggested he would propose a package soon after Congress returns from recess on April 9.

Johnson has yet to disclose details of his plans for his version of the bill. Still, he suggested lawmakers would consider at least three potential elements: providing aid in the form of loans, using frozen Russian assets to support Ukraine, and ramping up U.S. natural gas exports to squeeze Russia’s budget revenue.

There is merit to some of the proposals. Of note is the Rebuilding, Economic Prosperity, and Opportunity for Ukrainians Act (REPO), which would give the U.S. president the authority to seize Russian assets and transfer them to Ukraine. In his comments to Fox News, Johnson said that using seized Russian assets to help Ukraine fight Russia would be “pure poetry.”

However, since most Central Bank reserves are held in the European Union, European cooperation is required. Still, the EU is studying the idea of seizing only the principal’s interest income, which is around $300 billion. Just why are they falling so short? A new study by the World Bank, United Nations, European Commission, and the Ukrainian government, released on February 15, estimated that the cost of rebuilding Ukraine’s economy is expected to reach $486 billion, 2.8 times its 2023 expected economic output. But first, the war must end. As many Russian assets as possible must be seized and used not only to rebuild Ukraine but also to help it withstand the vicious onslaught and drive the enemy from its territory.

Ramping up LNG (Liquified Natural Gas) exports is another proposal that should have been implemented long ago. Natural gas exports are a significant source of revenue for Russia. The United States is the world’s largest natural gas producer and has the resources to export greater volumes of LNG, thereby decreasing Russia’s market share. However, it needs to construct more LNG export terminals.

The loan proposal is most problematic because Ukraine simply would not be able to pay it back due to Russia’s devastation. However, if the loan was linked to the seizure of Russian assets and repayment made in that manner, that could work.

Even with the Republican opposition to an aid bill, there are other avenues the Biden administration could use. One is The Excess Defense Articles Act, which allows the President to sell or gift U.S. military equipment no longer needed by the armed forces. How he exercises this power is up to him. He can declare the material surplus. The administration can also resort to legislative maneuvers such as a discharge petition enabling Republicans who support Ukraine to cooperate with Democrats to form a majority to force the bill to the floor. But efforts to collect the 218 signatures supporting the petition seem to be encountering strong headwinds due to competing petitions seeking support in the House and running out of steam. Meanwhile, the Ukraine Democracy Defense Lend-Lease Act of 2022, which facilitated the supply of equipment to the Ukrainian government, was allowed to expire on September 30, 2023.

To add insult to injury, the U.S. has been pressuring Ukraine to halt its drone strikes on Russian energy facilities, fearing that this will drive up global oil prices. Biden appears to be afraid that rising oil prices and a possible concomitant rise in inflation could tip the scales against him in the Presidential race. Really? How can a few extra dollars to fill up your gas tank and possible impact on inflation compare with the countless lives that are being lost, the countless children kidnapped, the countless prisoners of war tortured and all the other atrocities that Russia is inflicting upon the Ukrainian nation? Americans should be alerted to these realities. Besides, there are good reasons why these attacks should continue.

First, these attacks are carried out by drones that were manufactured in Ukraine and, therefore, not subject to all the restrictions that the U.S. is imposing specifically on Ukraine in return for providing the aid. Furthermore, unlike other countries, Ukraine has meticulously limited its strikes to strategic military targets. And that’s precisely what Russian refineries are. Moscow gets about 40 percent of its federal budget from the export of crude oil and refined products, most of which goes to feed its defence sector, enabling Moscow to rebuild its shattered armies and purchase vast amounts of foreign-made weaponry to use against Ukraine. Russian refineries also churn out millions of barrels a day of products such as diesel and aviation fuel, which are needed for Russia’s perpetually logistics-constrained armed forces. And Western sanctions have done little to reduce the revenue Russia receives from its oil exports, allowing Moscow to continue the carnage it is inflicting upon Ukraine.

So, it’s up to Ukraine to pick up the slack – and that’s exactly what these attacks are doing. These strikes also drive home the message to the Russian people that, yes, there is a war on. But they drive home the message with precise surgical strikes — not indiscriminate, mass bombardment meant strictly to terrorize the civilian population.

Frankly, despite all the bold proclamations of solidarity, U.S. support of Ukraine must be more consistent and adequate. In a recent article in The Hill, a highly respected U.S. political website, Stephen Blank, a Foreign Policy Research Institute senior fellow, termed U.S. policy as “strategic incompetence” and offered the following dire warning:

“Should this level of strategic incompetence throughout the West continue, it is not only history that will not forgive us. The citizens of Ukraine and Europe who are witnessing the horror of this war will know that Western leaders’ irresolution, self-centered refusal to confront evil, weakness of heart and lack of courage betrayed them. And then what will we tell them when they are left face-to-face with a resurgent Russia?”

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