US-UKRAINE-RUSSIA-CONFLICT-ECONOMY-OIL-FUEL-PRICES The prices for gas and diesel fuel, over $6.00 a gallon, are displayed at a petrol station in Los Angeles, March 2, 2022. - Oil prices soared March 2 above $113 per barrel and natural gas hit a record peak, as investors fretted over key producer Russia's intensifying assault on Ukraine. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images) FREDERIC J. BROWN / Contributor
Frederic J. BROWN / AFP/FREDERIC J. BROWN/Contributor via Getty Images

News

The Russian Oil Industry

It’s Friday, March 4th, and this is your Morning Wire. Listen to the full podcast:

1) The Russian Oil Industry

The Topline: The military invasion of Ukraine has thrown a spotlight on the role fossil fuel exports play in Russia’s economy. Now, a bipartisan group of legislators says this proves the U.S. has to make energy independence a priority. 

Quote Of The Day: “Between the United States, the U.K., and the European Union, every single day, we are sending $700 million a day to Putin by buying his oil. …President Biden needs to stop financing Putin’s war with Russian oil, because he shut off the spigots of American energy.”

– Congressman Steve Scalise (R-LA)

Denis Kozhevnikov/Contributor/TASS via Getty Images

Russian Oil

Like most of the world, Russia’s economy runs on fossil fuels. Russia produces 11% of all the oil in the world. Last year, oil and petroleum exports accounted for more than one-third of the country’s budget. 

The amount of oil the U.S. imported from Russia has reached a record-high under President Joe Bide . Today, Russia supplies around 7% of all of America’s energy imports and is America’s number-one supplier of imported gasoline.

Republicans are calling on the Biden administration to move toward energy independence. Democratic Senator Joe Manchin (WV) has also separately called on the president to increase U.S. energy production. In 2020, under President Trump, the U.S. gained energy independence for the first time in more than 70 years.

Biden

President Biden’s taken several steps that could reduce U.S. energy production long term. In his first week in office, he signed an executive order to “pause new oil and natural gas leases on public lands or in offshore waters.” A federal judge in Louisiana overturned that order last June, but Biden once again halted all federal energy leases last month. 

The administration also canceled the Keystone XL pipeline, and Biden ordered federal regulators to invent a new measure he called the “social cost of carbon,” which would factor in the harms that the environmentalist movement claims are created by fossil fuels. 

This all caused U.S. gas and heating prices to rise, even before the current war. The price of a barrel of oil reached a near-record level this week of more than $106 a barrel, which is a 60% increase in one year. 

The Russian energy industry gives Putin tremendous leverage over U.S. allies. Even without the Nord Stream 2 pipeline, Germany already imports 55% of its natural gas from Russia. 

Remember: The U.S. government estimates that the global energy use will increase 50% by 2050.

 Last month, 10 senators wrote a letter to Energy Secretary Jennifer Granholm stating, “we urge you to take swift action to limit U.S. natural gas exports.”  

Dan Kitwood/Staff/Getty Images

2) Ukrainians Flee Violence

The Topline: The Russian invasion of Ukraine continues, as new reports stream in of Russian gains in southern port cities and threats of violence by Russian forces once cities are captured.

Quote Of The Day: “…what they’re desperate for right now is anti-tank missiles. So something that can cut the supply line. Something that can sort of destroy this ring that is being formed around the capital right now.”

Hollie McKay, a journalist on the ground in Ukraine and author of “Only Cry For The Living

Updates

Russian forces have entered Kherson, a port city in the south of Ukraine along the Black Sea. As many as 300 people have been killed there, according to the city’s mayor. Some reports appear to suggest they’ve captured the city, though Ukrainian President Volodymyr Zelensky is saying Ukrainians are still fighting. If Russia holds this position, it would be a major strategic win for them, with Russian forces laying siege on other seaports while also bombarding Kyiv and Kharkiv.

When it comes to Kyiv, it appears as if the vast majority of violence is still limited to missile attacks. 

Hollie McKay, a journalist on the ground in Ukraine, said the massive convoy just north of the capital city of Kyiv is still at a standstill.

As the conflict continues to rage, the number of Ukrainians fleeing the country continues to rise. The United Nations is now saying that one million refugees have fled Ukraine, with evacuations being slowed down or even stopped by the Russian army blocking or damaging railway lines, trains, and bridges.

There are also reports that Russia’s Federal Security Service has drafted plans to carry out public executions in captured Ukrainian cities. 

The mass exodus isn’t limited to Ukraine. Two independent news outlets in Russia have been shut down for refusing to fall in line with the Kremlin. They’ve been accused by the Russian government of pushing false information. In response, some Russian journalists are reportedly trying to escape the country.

Peace Talks

The second meeting between Ukrainian and Russian delegates took place on Thursday night. 

It was reported that talks ended without any deal being reached, but an advisor to Zelensky who took part in the talks said that a tentative agreement was reached to organize safe corridors for civilian evacuation, as well as the delivery of humanitarian supplies. Under this agreement, cease-fires would be observed where corridors are created.

And… Zelensky is calling for a face-to-face meeting with Vladimir Putin. “Sit down with me to negotiate, just not at 30 meters,” he said. “I don’t bite. What are you afraid of? Any words are more important than shots.”

Daisy-Daisy via Getty Images

3) White House Reveals New COVID Strategy

The Topline: In his State of the Union address, President Biden announced a new COVID strategy, which he says will help bring about a “new normal” for the United States.

The Plan

Biden said he would start a “test to treat” initiative, which would provide antiviral medications to those who test positive. 

The president completely rejected the idea of “living with the virus.” He compared it to living with AIDS or cancer. Critics were quick to observe that Americans don’t shut the country down for those diseases.

Another item in the plan includes more funding for schools and businesses. The initiative would provide guidance, tests, and supplies to help them stay open and improve ventilation and air filtration. This is in addition to the tens of billions of dollars already given to schools during the pandemic – much of which has yet to be spent.

The United States will be funding vaccination efforts for poor countries, as well as the infrastructure to deliver those vaccines. The plan also promises emergency healthcare to address COVID surges overseas. Biden committed to donating 1.2 billion doses to other countries  “for free, with zero strings attached.”

The Biden administration wants to work with drug manufacturers to produce a billion more doses of the vaccine, and work on a universal vaccine to protect against all variants. The administration also partnered with Pfizer to produce more than a million antiviral pills this month for people who test positive. This would also be paired with a PR campaign to inform people that the pills are available for free in pharmacies as soon as they test positive.

The Numbers: After a spike over the holidays, the numbers are about where they were a year ago. The average for deaths in the same time period is higher than it was at this point last year, while the seven-day average for hospitalizations is around where it was at the start of the pandemic. 

Michele Crowe/CBS via Getty Images

Other Stories We’re Tracking

Melinda French Gates

Melinda French Gates sat down with CBS This Morning to explain details of her divorce from Bill Gates. Gates said directly that Bill’s ongoing friendship with convicted pedophile Jeffrey Epstein was one of many factors that played a role in their divorce, and that she was vocal about her disapproval of Epstein. 

Special Message: Morning Wire will release a special episode this Sunday that looks into alleged financial violations of the Black Lives Matter organization.  

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