Colorado's reaction to the US ban on importing Russian oil and gas

Polis calls for suspension of federal gas tax
colorado gas prices
Posted at 5:54 PM, Mar 08, 2022
and last updated 2022-03-09 12:51:10-05

DENVER – Colorado Gov. Jared Polis again Tuesday called on Congress to suspend the federal gas tax as President Biden moves to ban the importation of Russian oil and gas – something several of Colorado’s members of Congress had called for.

Polis wrote to the Democratic and Republican leaders of the U.S. House and Senate Tuesday asking them to temporarily suspend the federal gas tax of 18.4 cents per gallon – something he also called for on the first day of the Russian invasion of Ukraine.

Polis said he supported the vehicle for such a suspension, the Gas Prices Relief Act, which would suspend the federal tax until Jan. 1 of next year. The House version of the bill has 12 cosponsors and the Senate version has six cosponsors as of Tuesday – none of whom are from Colorado.

“First, it saves Americans at the pump by suspending the federal gas tax for the rest of the year. Money saved at the pump translates into dollars back in consumers’ pockets for groceries, childcare, rent, and more,” Polis wrote in the letter. “…At a time when people are directly impacted by rising prices on everyday goods, a federal gas tax holiday is a tool in the toolbox to reduce costs for Americans, and we urge you to give every consideration to this proposed legislation.”

Also signing on to the letter were Michigan Gov. Gretchen Whitmer, Minnesota Gov. Tim Walz, New Mexico Gov. Michelle Lujan Grisham, Pennsylvania Gov. Tim Wolf and Wisconsin Gov. Tony Evers. All are Democratic governors.

Polis has also called on state lawmakers to delay an incremental new gas fee increase of 2 cents per gallon that was set to take effect in July.

According to AAA, the national average gas price Tuesday afternoon was $4.17. In Colorado, the average was $3.83.

President Joe Biden announced Tuesday morning the U.S. would ban the importation of oil, natural gas and other energy products. The United Kingdom announced a similar ban, while Europe will restrict the flow of natural gas imports from Russia.

Biden said the ban would likely cause U.S. gasoline prices to increase even further but added that the U.S. would release oil from its strategic reserves to try to offset the price increases.

Both of Colorado’s U.S. senators, Democrats Michael Bennet and John Hickenlooper, last week said they were supportive of a U.S. ban on Russian oil and gas products.

The two praised Biden’s move Tuesday, with Bennet calling it “the right move – for the Ukrainian people & democracy,” and Hickenlooper saying the move would lead the U.S. to “stop bankrolling [Russian President Vladimir] Putin’s horrific and immoral war in Ukraine.”

Rep. Joe Neguse, D-Colo., tweeted a clapping emoji in wake of the news after he called for a ban on Russian imports on Sunday. Rep. Diana DeGette, D-Colo., called the move “an important step” to further isolate Russia and cut off its funding.

“The American people stand squarely with the Ukrainian people in this fight & we must do everything we can to end this crisis,” she added.

Rep. Lauren Boebert, R-Colo., said the ban on Russian imports by the Biden administration “is the right thing to do.” She said America should also increase its energy production and end the moratorium on new leases on federal lands.

There are thousands of permitted wells across the U.S. that are currently eligible for drilling. While the U.S. is the world’s largest oil producer, it is also the largest consumer. It imported around 8% of its oil imports last year – around 245 million barrels – from Russia, which is less than it imported from Canada or Mexico.

Boebert also called for the renewed construction on the Keystone XL pipeline, which was only 8% complete when Biden pulled its permits on his first day in office, as did Rep. Ken Buck, R-Colo., who wrote a letter to Biden after the president’s announcement calling for similar things that Boebert did.

“The United States and its allies must not be dependent on a foreign adversary for our energy, especially when we have extensive untapped resources at our disposal,” Buck wrote in his letter.

Jack Strauss, the chair of applied economics at the University of Denver, said he does not believe the price of gasoline will increase a lot more because the market already anticipated the ban, which led to the price increases over the past week or so.

“They’re most likely to spike another 50 cents, hopefully not $1. Already, it’s a record. But we have enough oil in the U.S. Russia has only 8%,” he said. “…So, we can easily make up the Russian oil imports.”

He said how long the price increases last will depend on how the Europeans continue to react with respect to oil and natural gas. It could also depend on how long Americans can hold out for higher prices, on top of inflation, in their support of Ukraine.

“I think we’ll become weary of this and say it may not be our fight,” he said. “At the same time, it’s not clear how long this fight will last, so if the fight lasts another week or two – part of Congress is saying the solution is to give drilling new bands and drilling in the Gulf of Alaska. We’ll, that’s a ridiculous attitude because it will take 6 months to a year to drill.”