FGI investigating federal energy policy’s impact on Ukraine war, inflation

Following State of the Union, decision to exclude energy sector from Russia sanctions continues to raise questions over U.S. energy priorities and buy American goals

March 2, 2022

(Washington, DC) – The Functional Government Initiative announced today it is seeking information from the federal government on the decision to exclude the Russian energy sector from US sanctions in response to Russia’s invasion into Ukraine. Oil and gas prices have been on the rise since early 2021, tracking several policy decisions to reduce American oil and gas production move the nation towards alternative sources of energy. Indeed, last year financial titan Larry Fink acknowledged the correlation between the pursuit of “green” policies and the nation’s growing inflation problem. 

The geopolitical consequences of the move away from energy independence have gained renewed attention given the recent Russian invasion of Ukraine. Even as the President expressed his desire during SOTU to increase reliance on Made in America and sanctioned the Russian economy in virtually every other area, America has increased oil purchases from Russia to offset the decline in U.S. oil and natural gas production. Now these purchases may be helping finance Putin’s war machine at the same time we are looking for ways to increase sanctions to deter his actions. The conflicting objectives do not end there. While some legislative voices insist that we should stop all Russian imports (including energy), other senior government leaders are both calling for a further reduction of fossil fuels while tapping the Strategic Petroleum Reserve to fend off rising prices.

Last week, FGI announced its efforts to understand whether the government’s senior leaders are prioritizing policies that appear to increase inflation over those that could ease it. In light of the developments abroad, many Americans would likely be surprised to learn that polices aimed at reducing our carbon footprint continue to dominate not only domestic but also foreign policy concerns. FGI will deepen this inquiry to assess what roles inflation, concern over gas prices, and climate change are playing in our foreign policy and how Buy American goals will change the apparent agenda to move away from energy independence.

Peter McGinnis, spokesman for FGI, issued the following statement:

“After last night’s State of the Union, the continued exclusion of the energy sector in the long list of sanctions imposed on Russia is puzzling given the critical role it has played in funding Putin’s invasion into Ukraine. If it turns out that the move away from energy independence is both driving inflation and hampering our ability to punish hostile dictators, the American public is likely to wonder what interests of the American public are actually being advanced. Our information requests into several agencies will explore the basis for the decision to exclude the Russian energy sector from sanctions and whether government officials believe the increased dependence on foreign energy is ultimately beneficial.  This information will allow the public to better understand what is truly happening.”