Dear friends and neighbors,
I heard back from many constituents that the background email on the Russian invasion helped provide a context for the crisis. Since then, the worst-case scenario has unfolded in Ukraine. Many have asked me for a follow-up email. Here is my summary:
Putin’s Russia is wreaking destruction on a peaceful neighbor: Russia launched a full-scale multi-pronged air and ground invasion of Ukraine earlier this week. Russia is hitting most cities in Ukraine with missiles and aerial bombing, leading to enormous casualties. Ukrainians are defending their country with courage and bravery. President Zelensky is showing true leadership as he unites his country and the world to rebuff Russian military power. The world stands with the Ukrainian people as they fight for their lives and freedom. The heinous Russian killing is beyond words.
Our response; risk of escalation to a NATO country: America and our allies have condemned this attack in the strongest terms and imposed sanctions on Russia. President Biden has vowed to support Ukraine with humanitarian aid and military assistance, but he has been clear that US soldiers will not be fighting in Ukraine. However, President Biden has drawn the red line to defend every inch of NATO territory. Escalation of this conflict to a NATO ally is a significant military risk. NATO is an alliance, originally of 12 countries formed in 1949, and now has 30 members. The essence of NATO is a collective defense; an attack on one is an attack on all. So if Putin were to attack a Baltic NATO member like Latvia or Lithuania, technically, he would have attacked America.
Economic Impact: The immediate economic impact on the world is from the risk of disruption to Russia’s natural gas and oil supplies. The sanctions this week avoided the extreme measure of an oil embargo. That led to the stabilization of oil prices and financial markets. The strongest sanctions available to the west are an embargo on oil and gas imports from Russia and delinking Russia from an international payments system called SWIFT. The sanctions on oil and gas (like we did with Iran) will be a true blow to Russia. However, such sanctions will also have high costs for the rest of the world. If the bloody killing of Ukrainians continues, these costly sanctions will come into play.
Is cutting off Russian oil and gas a realistic option? Russia’s key source of revenues is oil and gas. A few years ago, sanctioning Russian oil and gas would have been unfathomable because it would have resulted in shortages and gas lines. As a result of shale oil and gas production and increased renewables, it is now conceivable for the west to cut off Russia from the global energy markets. In 2021, the US was a net energy exporter. We exported as much natural gas as Russia. Europe has made enormous strides in reducing its dependence on Russian energy in the last decade. While energy prices WILL rise if Russian oil and gas are sanctioned, it is possible that shortages can be averted. Hence, while costly, Russian oil and gas sanctions are a real option.
The bravery and courage of President Zelensky and the Ukrainian people are an inspiration to freedom loving people around the world. We pray for peace in Ukraine.
