Promising news from the U.S.-G7 meeting yesterday. They announced a ban, or phase-out, for imports of Russian oil: "We commit to phase out our dependency on Russian energy, including by phasing out or banning the import of Russian oil. We will ensure that we do so in a timely and orderly fashion."
Well, I wouldn't exactly call that ironclad, but it is progress, especially for Germany, but also France and Italy, who up to now have opposed any kind of European ban on imported Russian energy. European imports of Russian energy total roughly $1 billion a day. And so with today being day 74 of the war, that could be $74 billion to Russia, which is vastly more assistance than Europe has given to Ukraine and really, unfortunately, the Europeans are still financing Putin's war machine. It's a tragedy.
All I'm saying here is perhaps the G7 thought will be the father to actual G7 actions later this year. Maybe, but something good.
Now, of course, if the Europeans are going to shut down Russian energy imports, you would think Joe Biden would be leading the charge of America to the rescue. Turn on all the LNG export spigots to full throttle, help the Europeans, stop financing the Russian war machine. Well, you would think that, but unfortunately, you'd be wrong because no matter what President Biden may say about short-run this or short-run that, the reality is his administration's new NEPA permitting rules will basically stop new oil and gas production and new pipeline building.
Of course, the Keystone XL pipeline is gone, thanks to Biden. Alaska drilling — gone. Other smaller pipelines — gone. Those decisions have already been made by Biden's Energy and Interior departments and his EPA. But just a few weeks ago, after bragging that at least a small amount of leases on federal lands will become available, the White House Council on Environment Quality put out the most restrictive, onerous infrastructure regulations in history.
Any new infrastructure projects — be they fossil fuel-related, or pipelines, or even bridges, roads highways, tunnels — will be subject to direct, indirect and cumulative environmental impact reviews. The social cost of carbon and its cumulative impact could go back 100 years and forward 100 years, all one gigantic roadblock.
Those new regulations actually neuter the trillion-dollar infrastructure bill that was passed months ago and supported by the Biden administration. Under these new rules, we won't be able to help Europe, nor will we be able to help the U.S. Ironically, we won't even be able to help the greenies, because a lot of their projects to build wind and solar and electric charging stations and EVs will be stopped by these radical environmental regulations.
Oil, by the way, is still over $100. Gasoline at the pump is only a penny short of the all-time record set a month ago at $4.32 nationwide. Natural gas is over $7.
A headline story today is that Americans' inflation fears hovered near record highs in April, according to the New York Fed survey. That, of course, is contributing mightily to rising market interest rates and a deep sell-off in stocks.
Instead of the two-year permitting limit instituted by the Trump administration, these infrastructure permits are going to go on forever — back to 10 or 12 years or more — and the new White House rules open up a field day for trial lawyers.
So, all the rhetoric in the world about Europe pulling back from Russian energy, or Biden pulling back from his fossil fuel jihad, turns out to be completely false. In fact, all the talk about new energy lease availability is nonsense because the leases are worthless when energy companies know they can't get permits. Permits are the key!
So, once again, the Bidens speak with forked tongues. I hope they enjoyed their energy cognitive dissonance with the G7. But you know me, I'm always looking for a piece of good news. I found some this weekend.
That's right, Vladimir Putin's $700 million yacht – which he paid for by putting pennies a week in his little tin box – ell, that yacht has finally been seized by the Italians, no less! Let us cheer on the Italian navy, or whoever did this wonderful deed.
Vladimir Putin is a war criminal and a crook. He has been stealing from Russian working folks for decades and decades, but finally, somebody had the gumption to take away his boat. Sell the boat, send the proceeds to Ukraine and save Italy!
This article is adapted from Larry Kudlow's opening commentary on the May 9, 2022, edition of "Kudlow."