On the Senate Floor, Portman Urges Cutting Off Russia’s Energy Revenue

Pushes for Administration to Utilize Domestic Oil & Gas Production

March 28, 2022 | Press Releases

WASHINGTON, DC – This evening, U.S. Senator Rob Portman (R-OH) spoke on the Senate floor about how the U.S. should be doing more to cut off funding for Russia’s war machine. He also continued to reiterate his five important steps that will help counter Russia – including more defensive weaponry to Ukraine, further sanctions on Russian banks, trade restrictions, and additional tax consequences. Last Friday, Portman met with oil and gas companies in Ohio, and he took their message to the Senate floor: we have an abundance of oil and natural gas here, and we should be using it. We, nor our NATO allies, should be funding Russia’s war machine. Senator Portman called on the administration to match its tough words with tough actions.  

As co-chair of the bipartisan Senate Ukraine Caucus, Portman has continuously called for stronger, swifter action against Russia as they continue their deadly assault on Ukraine. 

A transcript of his remarks can be found below and a video can be found here.

“I come to the floor again today to stand in solidarity with the people of Ukraine. This is the seventh week in a row I've come out here to talk about the atrocities being committed by Russia and what more the United States and this Congress can do to support Ukraine in its fight for survival. It's now been more than a month since Russia’s assault on our ally Ukraine, an independent, sovereign, democracy. A democracy that just wants to live in peace. Earlier today, Russia continued its cowardly and brutal bombing attacks on civilian targets in Ukraine. Some civilians, like those trapped and surrounded in Mariupol, are dying due to a lack of access to water and food. Russia continues its assault on humanitarian corridors, which were designed to allow safe passage for civilians fleeing the conflict and for lifesaving humanitarian aid to come in to those who can't get out.

“You may recall the theater in Mariupol, where people were taking refuge in the basement, using it as a bomb shelter. The word ‘children’ in Russian was emblazed with huge letters, clear enough to see from the sky, so that it would not be a target. But it was. We just learned Friday that roughly 300 Ukrainian civilians were killed in that basement when the theater was hit by a Russian bomb about a week ago. Mostly women and children. Vladimir Putin's war has resulted in death and destruction not seen in Europe since World War II. Thousands of civilians have been killed. Roughly ten million people have been displaced from their homes, 3.6 million refugees, almost all women and children and the elderly have fled the country they love, while men have stayed behind to fight the invaders.

“In my recent visit to the Polish-Ukrainian border with three colleagues, I talked to dozens of refugees. Through their tears they spoke of their apartments or houses that were destroyed, they spoke about their friends or family members who were injured or even killed. They talked about the pain of being separated from their husbands or fathers or brothers who had stayed behind to fight, not knowing their fate. They pleaded for us to do more, to stop the missiles, stop the bombs, and they all said they wanted to return to their homeland as soon as they possibly could. President Biden is just back from the region where he too met with refugees, and I'm glad he went. He was clearly moved by what he saw and heard. I thought his speech in Poland Saturday was a powerful indictment of Russia's invasion and a strong statement of support for Ukraine, as well as a reminder that this battle in Ukraine is about the larger issue of freedom and democracy versus tyranny and authoritarianism.

“Unfortunately, a compelling speech was overshadowed by an off-the-cuff remark at the end, saying of Putin, ‘this man cannot stay in power.’ This was read as supporting a regime change in Russia. There’s no question in my mind that the world would be a better place, and a safer place, without Vladimir Putin as President of Russia. But this remark unfortunately played into Russia's propaganda efforts from the start, that NATO, that Ukraine, and NATO supportive of Ukraine are all threats to Russia and attempts to overthrow the Russian government. None of that is true, of course. All Ukraine wants to do is live in peace with its neighbor. NATO is a purely defensive pact, not offensive in any respect, simply countries pledging to defend one another from attacks. Regime change is neither our policy in this instance or our broader strategic objective. I can imagine that having met with the refugees, and having heard their heartbreaking stories, that the president was expressing his frustration. I get it. But the president's words and the reaction to them reminds us that this is a true national security crisis and in this sensitive moment, it requires the United States to speak with clarity and to speak, wherever possible, in unity with our allies, in NATO and beyond.

“Unfortunately, that did not always happen on this trip, whether it was the president talking about our response to the use of chemical weapons, U.S. troops that may end up in Ukraine or regime change. Tonight, I want to focus on another positive aspect of the president's trip that relates to sanctions and offer a few ideas of where we go from here. With regard to our sanctions on Russia, I believe there are a number of additional steps we can and should take. I was glad to hear on March 24 that the Treasury Department issued sanctions against dozens of defense companies, 328 members of the Duma legislative body, and the Chief Executive of Sberbank. Gold-related transactions involving Russia may be sanctionable by U.S. authorities, the Treasury Department has also said in a statement. We should do that. But we should also expand full blocking sanctions to all Russian banks, revoking international tax and trade agreements that give Russia privileges not appropriate for a pariah country, seizing, not just freezing, assets from Kremlin supporters, keeping oligarchs from laundering money through expensive art, and more.

“I've introduced legislation on some of these ideas and advocated for all of them here on the floor of the Senate and elsewhere and will continue to do so. But tonight, I want to focus on what I think is the single most important sanction, the one that could make the biggest difference. Our top priority should be cutting off Russia's number one source of income that fuels the war machine, and that is receipts from energy. Energy is by far Russia's biggest export and accounts for roughly half of Russia's entire federal budget. Over the past year, the average oil revenues going back to Russia from their exports to the United States alone was about $50 million a day. Under pressure from Congress, the administration changed its view and chose to block that Russian oil, natural gas, and coal imports, and that's good. It made no sense for us to help fund the Russian war effort, especially when we have our own natural resources here in North America that we can gain access to and actually do so in a way that’s better for the environment than Russian oil that’s produced in way that emits more methane and CO2 and of course has to be shipped by sea to our shores, causing more emissions.

“I recognize that sanctioning Russian energy is far more difficult for some of our allies in Europe who are far more dependent on Russian energy than we were. But the same argument applies. We can't be funding this brutal war. I welcomed the announcement made during the president's trip on the creation of a joint U.S.-E.U. task force to help reduce Europe's dependence on Russian energy and strengthen Europe’s energy security. Specifically, this initiative will help provide at least 15 billion cubic meters, bcm’s, of LNG exports from the United States, liquified natural gas, this year, with the goal of shipping 50 bcm’s of U.S. LNG to Europe annually through at least 2030. This a very positive step forward, because it's telling the Europeans you can cut your dependency on Russia and stop spending money that goes into the war machine and we'll back you up. The United States has plenty of natural gas, it’s produced in a cleaner way by the way, and we're happy to back you up. This agreement is not a silver bullet, but it is a step in the right direction. It is smart to support our domestic energy producers as a means of supporting our national and economic security. But also as a way to support our allies in Europe.

“In light of this Russian invasion, the importance of the United States having a robust all-of-the-above approach to power our nation, which includes fossil fuels, renewable energies, carbon capture technologies, nuclear power, hydrogen – cannot be overstated.  For context, Europe imported approximately 155 bcm of gas from Russia in 2021. And approximately 22 bcm from the United States through LNG. So 50 bcm from the United States on top of that will lead to a significant increase in U.S. LNG exports and really help Europe. But if this is to work, the administration is going to have to follow through on these commitments to help get more hydrocarbons on the global market to consumers in Europe. If the price is higher in Europe, as predicted, some of the LNG supply will go to Europe instead of Asia, and that will help. That will be based on market forces.

“But in order to ensure that we meet this increased supply to Europe, we have to increase our production here at home, and develop the associated infrastructure, such as pipelines and terminals to get that natural gas to market. Unfortunately, we aren't off to a great start. The president's tax proposals released with their FY23 budget request to Congress eliminates important tax provisions used by our domestic producers, like the deduction for intangible drilling costs, or IDC’s, which allows natural gas and oil producers to deduct costs that are necessary for the drilling and preparation of wells. This includes things like wages, fuel, survey work. Taxpayers get to deduct their cost of doing business, IDCs are one such cost for energy companies, and shortsighted proposals like those in the budget will only serve to discourage domestic energy production at a time when we need it.

“On Friday, I spoke at a natural gas seminar in Ohio and met with energy producers who are working in the Marcellus and Utica shale in Ohio. We're now a major gas-producing state thanks to those Utica and Marcellus shale finds, and the producers in Ohio had a lot of thoughts about what was going on that day in Europe. They were glad about the agreement between the E.U. and United States, but they drove home to me the key point that we have energy here in the ground, but the current administration's policies have made it very difficult to get that product to market, both domestically and internationally. Unfortunately, the Biden administration has consistently sent a message to these producers and others that one of their goals is to phase out the use of fossil fuels altogether. This rhetoric, combined with actions like canceling the Keystone XL pipeline, suspending new leases on federal lands and waters, redefining waters of the U.S., or WOTUS, which makes it harder to permit energy projects, has led to a lot of uncertainty within the oil and gas industry, which has had a chilling effect on domestic energy production.

“Again, at a time when we need it. We need all of the above. In light of this new LNG initiative with the European Union, the Biden administration’s actions must now meet its commitments. An important part of building out our domestic energy infrastructure for gas, renewables, and everything in between is streamlining the federal permitting process, whether it’s a wind power project, solar power project, or a natural gas project. Historically, it can take a decade or more for the federal government to issue permits to build pipelines and other necessary infrastructure. I coauthored a law called FAST-41, which improves the permitting process for these big projects by requiring agencies to work together to set out a plan and a timeline for permitting projects. It also created the federal Permitting Improvement Steering Council, which can help resolve disputes over the permitting process and get a green light on a project much more quickly.

“FAST-41 has worked. It's helped projects save billions of dollars and years of time, all while upholding environmental standards. The bipartisan infrastructure bill expanded the council's authorities and made it permanent, and the recent FY22 government funding bill included $10 million for the council to help support its operations. I urge the Biden administration to use this FAST-41 process to reduce bureaucratic red tape in permitting these projects so we can deliver this liquefied natural gas to Europe, as we’ve promised, in a timely fashion so that we can begin to reduce their dependency on Russian oil and stop sending billions of dollars to fund the Russian war machine. This is where energy security and national security come together.

“We need to lead our European allies in doing all we can to sanction Russia's energy sector. We talked a lot about cutting off the natural gas and revenue that fuels the war machine in Russia, but we also need to tighten up these bank sanctions as they relate to energy. As an example, it is simply unacceptable that sanctions against Russia’s biggest banks, including VTB bank do not apply to energy transactions until June 24. This is simply too late. We need to act much more quickly. While President Biden was in Poland, inside Ukraine Russian missiles were striking cities all across the country, including the western city of Lviv, not very far from the Polish border. President Biden must lead the alliance to redouble their efforts to stop this madness, to ensure Russia is not rewarded for its war crimes. It is one thing to keep the alliance together. It is another to lead the alliance out of its comfort zone to a more aggressive stance to actually win this war.

“So in addition to the energy, and other sanctions we've discussed tonight, what more can we and our allies do to help Ukraine win this war? And note I say ‘win this war.’ Because if we act swiftly, I think we can help Ukraine actually win and keep Ukraine as a viable democracy and save thousands of lives. But they need our help, especially to stop the missiles and artillery that is raining down on civilians every day and every night. As we talk here tonight, this is happening in Ukraine. The Ukrainians have made it very clear, they desperately need more air defense. President Zelenskyy talked about it again in the last 24 hours. Based on the news media reports, the United States is providing SA-8s, an older Soviet-era defense system to Ukraine. I was glad to hear that.

“However the media reports also say that the more capable S-300 Soviet-era systems we have in our inventory are not being sent. If this is true, this is a big disappointment and shows a lack of urgency. While I commend the president for the strong speech he delivered over the weekend, the actions of the administration have to match that rhetoric. There are additional weapons they’re desperately needing that we're not yet providing, particularly these anti-air systems and more munitions for their own anti-air systems. Often it's us facilitating the transfer of these weapons from former Warsaw pact countries that are all along the border, Eastern European, Central European countries that are close to Ukraine and can provide these incredibly important military anti-air systems, but we need to help them. We need to facilitate that and backfill their needs at home.

“They've asked for our help across the board. But specifically, for tanks, for anti-ship systems, which is really important right now because so many of these missiles are coming from these ships in the Black Sea. President Zelenskyy needs to be listened to. He knows what they need. He says we need more, and we need it more quickly. We must also keep sending Stinger missiles, which are effective at shooting down Russian helicopters and planes at lower altitudes. We must find ways to quickly provide Ukraine with more armed drones such as the Turkish TB-2s and one-use loitering munitions, which the Ukrainians know how to use and have been very effective on the battlefield with. Two weeks ago it was announced that we are sending 100 so-called Switchblade loitering munitions. One hundred will go very quickly. We need to send more and we need to send them quickly.

“To our Israeli friends, I would ask them to sell us or other countries, and we should agree to buy, their Harop drones, which Ukraine could really use right now. The bottom line is we need to flood the zone when it comes to providing Ukraine with military assistance. They are not asking us to fight for them but they are asking for the tools to be able to defend themselves, particularly with regard to this endless bombing. And they have a chance to win if we do that. There should be no gaps in our weapon transfers. We need to lead the NATO allies and others when it comes to providing and coordinating support. There are loopholes in the sanctions we talked about tonight. We need to do more to ensure that those are closed. We need to do more to ensure that the weapons are being received. We should act fast to let the people of Ukraine know with certainty that we do stand with them.

“The popular Ukrainian national rallying cry, ‘Slava Ukraini,’ when translated into English is ‘Glory to Ukraine.’ The response to it is ‘Glory to the Heroes.’ ‘Heroyam Slava.’ In the midst of this atrocity, there are so many heroes, and we need to back them up.  There are so many heroes to glorify in Ukraine, the soldiers, the professionals and civilians who have taken up arms. The doctors and the nurses and the firefighters and the volunteers providing food and water and blankets. We pray for them all, and we pray for their families. Godspeed to them and their simple quest, a battle for a free and independent Ukraine, a country that can chart its own course. America needs to stand with the people of Ukraine. We must show the world, both our adversaries and our allies, that we stand with Ukraine.”