Europe Will Stop Buying Oil From Russia to Cut Putin's War Money

The U.S. will still buy Russian oil, but only at discount prices. Plus, Europe wants its EVs to qualify for U.S. tax cuts, and more, in today's Morning Shift.

We may earn a commission from links on this page.
A photo of a Russian Oil Tanker with The Morning Shift banner underneath.
Photo: Loic Venance / AFP (Getty Images)

Countries around the world are hitting Russia where it hurts: the country’s oil profits. Plus, EU officials really want European car companies to be eligible for U.S. electric-car tax credits, and the number of people using bike-sharing services across America has risen beyond pre-pandemic levels. All this and more in The Morning Shift for Monday December 5th 2022.

1st Gear: Russian Oil Embargo Takes Effect

Since Russia invaded Ukraine back in March, countries around the world have stepped in to place sanctions on the aggressor nation and its high-ranking officials. From seizing property like yachts to halting shipments in and out of Russia, it’s all part of a global effort to dry up the funding for Putin’s war. Now, G7 countries are ramping things up a notch further.

Advertisement

The New York Times reports that today, G7 countries (including the U.S., Australia and EU member states) will implement a price cap on Russian oil. The limit, set at $60 per barrel, is meant to increase economic pressure on the Kremlin while avoiding excess damage to global oil supplies.

The benchmark crude oil price currently sits around $87 per barrel today, so the price limit set up by the G7 undercuts Russia by around 30 percent. However, The New York Times reports that “Russia has said it will not accept a price cap and has threatened to cut off supplies to countries that comply with the arrangement.”

Advertisement

A price cap isn’t the only action being taken: EU member states are going one step further by banning most Russian oil imports entirely. The New York Times reports:

“The second is an embargo under which European nations will no longer be able to buy most Russian crude as of Monday. It was a step that the European Union had agreed to months ago but that it phased in to prepare member nations.”

Advertisement

This ban on crude oil imports could be expanded in the coming weeks. The New York Times adds that the EU plans to expand the ban to include “refined products from Russia, like diesel,” which could come into force in February 2023.

2nd Gear: The EPA Wants to Class Electricity as a Biofuel

If we want to move away from our reliance on oil, biofuels could be key. And, here in the U.S., lawmakers have been unveiling new policies to expand our use of biofuels. These include an increase in usage requirements for biofuels, as well as a way for automakers to class their EVs as being biofuel-powered.

Advertisement

It sounds odd, but the new plan is all about EV makers proving that the energy that powers their electric vehicles is coming from clean sources. If they are able to show that it has been generated by “biofuels like landfill or agricultural methane,” they will earn credits. Automotive News reports:

“The EPA hopes to use the reset to introduce a pathway for EV makers to generate credits. That would recognize the possibility that EVs could be charged using power from the grid generated by biofuels like landfill or agricultural methane.

“The EPA proposal foresees electric vehicle manufacturers — like Tesla Inc. for example — generating as many as 600 million credits called e-RINs in 2024, and 1.2 billion of them by 2025. Under the scheme, one e-RIN would be generated for every 6.5 biofuel-powered kilowatt hours in an EV battery.”

Advertisement

As well as the new focus on biofuel and EVs, the new plan also requires refiners to produce 20.82 billion gallons of biofuels in 2023, 21.87 billion gallons in 2024, and 22.68 billion gallons in 2025.

3rd Gear: EU Car Makers Want Their EV Tax Credits Back

The Biden administration did a great job earlier this year by expanding tax credits for EVs. It was a step that could make electric cars more affordable for more people. But the rule stipulates that only American-made cars can qualify for the tax break, which did a good job of annoying pretty much every other country in the process.

Advertisement

Now, European Union officials are meeting with U.S. trade representatives to hash out new trade deals and talk about how damaging the Inflation Reduction Act could be for automakers based in the EU’s 27 member states. Reuters reports:

“The 27-country bloc fears the $430-billion Inflation Reduction Act (IRA) with its generous tax credits of $7,500 for Tesla (TSLA.O), Ford (F.N) and other North American-made EVs will significantly damage European automakers.

“French Finance Minister Bruno Le Maire said he and German economy minister Robert Habeck have started talks with their U.S. counterparts on exemption for all EU-made green products. But he also said the EU needed its own equivalent of the IRA.”

Advertisement

The latest wave of negativity towards the Inflation Reduction Act follows French president Emmanuel Macron’s comments that it was a “job killer” for Europe. South Korean officials also criticized the Act at the G20 Summit in Indonesia last month.

4th Gear: UAW Elects Reformers to Board

United Auto Worker union members have begun electing a new board of directors. So far, reformers have taken six out of a possible 14 seats on the union’s International Executive Board, and could be on track to win a majority, according to unofficial results posted early on Sunday. The Associated Press reports that they could be on track to “win as many as eight, including the presidency, and control a majority, depending on the outcome of three runoff elections.”

Advertisement

The six challengers elected so far are part of a slate called UAW Members United. They campaigned on taking a “more confrontational stance” in bargaining talks with Detroit’s big three automakers. The AP reports:

“They want to rescind concessions made to companies in previous contract talks, restoring cost-of-living pay raises and eliminating a two-tier wage and benefit system.

“The adversarial stance is likely to raise costs for General Motors, Ford and Stellantis, which almost certainly would be passed on to consumers. Even without the election, costs likely would have gone up as workers seek a bigger share of billions of dollars in profits.”

Advertisement

UAW members were also voting on a new president. So far, incumbent Ray Curry defeated challenger Shawn Fain with 38.2% and 37.6% of the vote respectively. However, as neither was able to secure a majority, there will be a runoff election in January.

5th Gear: Bikeshare Usage Tops Pre-Pandemic Levels

Since the pandemic started, it feels like there’s been nothing but bad news to report across public transport. Ridership is down and people are much happier taking their cars if it means avoiding small spaces loaded with strangers. But, it turns out there’s one area of public transit that is doing well: bikesharing.

Advertisement

According to a report from Bloomberg, usage of bikeshares like New York’s CitiBike program is on the rise.

Between its peak in 2019 and the midst of the Covid-19 pandemic in 2020, bikeshare ridership in the U.S. fell 24 percent. But now, Bloomberg reports that “bikeshare systems in Chicago, New York, and Philadelphia were beating ridership records, and across the country ridership was up 18% compared to 2019.”

Advertisement

As well as a rise in overall rider numbers on such services, Bloomberg also spotted changes in the way riders use these shared bikes. The site reports:

“There are signs that across modes, the pandemic has had a lasting impact on who rides, how, and when. In 2020, all micromobility modes made more trips to and from essential services, like hospitals and grocery stores, as riding emerged as an open-air local transportation option. Meanwhile, the commuting patterns that characterized 2019 trips — with spikes in ridership in the morning and again in the evening — shifted as many professionals went remote in 2020 and 2021, with daily ridership increasing somewhat steadily until the end of evening rush hour.”

Advertisement

It’s a positive sign that increasing rider numbers might not be just a flash in the pan and could, instead, be a lasting trend for the new ways people want to get around town.

Now, if only there was decent cycling infrastructure around U.S. cities, then we could show how many people really want to get out on their shared bikes.

Advertisement

Reverse: Triangles Are my Favorite Shape

Advertisement

Neutral: What Would it Take to Get You on a Bike?

I love cycling, both on city streets and mountain trails - and everywhere in between, to be honest. But, there are a lot of reasons why people might not want to take to two wheels. With bikeshare ridership on the rise, I’d love to know whether you’ve hopped on a bicycle to do some of your commuting or errand-running. Why or why not?

Advertisement

On The Radio: Loyle Carner - “Nobody Knows”

Loyle Carner - Nobody Knows (Ladas Road)