by Edward Epstein
03-05-06
Saudi Arabia's oil minister scorned the popular notion that America can
achieve energy independence as a myth, saying the idea denies the existence of
interdependent global markets and the need for countries to work together for
oil-price stability.
Top Democrats in Congress, who argue that America can become independent of
foreign energy sources within 10 years, reacted heatedly to Saudi minister Ali
Naimi's statement, insisting their goal is realistic.
The exchange came as Congress was locked in a testy debate about how to react
to record high gasoline prices, an issue that both parties recognize has jumped
to the top of voters' election-year agendas.
Politicians from President Bush on down are scrambling to respond to the
public's anger. Republican leaders said the House will vote on a bill intended
to strengthen Federal Trade Commission tools to investigate allegations of oil
price gouging. They also indicated votes are scheduled on legislation that the
GOP says would speed construction of new refinery capacity by granting quicker
regulatory approvals.
Showing the rush by Republican congressional leaders to let voters know
they've heard the call for action, both hurried bills will be considered under
rules requiring two-thirds majority approval for passage instead of the usual
simple majority vote. That means passage will depend on Democratic votes, and it
wasn't clear how the minority party will react.
But the gas price issue also has split the Republican leadership. House Majority
Leader John Boehner, R-Ohio, denounced the proposal by Senate Republican leaders
to give every taxpayer $ 100 to make up for higher gas prices.
"Trying to satisfy voters with a $ 100 rebate is insulting,'' Boehner told. He
said constituents thought the proposal "was stupid.''
Bush's top economic adviser, Edward Lazear, also cast doubt on the rebate
idea, saying the administration is studying it, but "is that the best way to be
using our tax revenues? Is it the most efficientway to allocate our resources?"
The Saudi oil minister Naimi, in Washington for a Saudi-US energy conference,
rejected the idea that energy self-sufficiency is a worthwhile goal for America.
"While self-reliance is appealing, the efficacy of such an approach for
achieving long-term energy security is an illusion built on the myth that
security can be achieved through protectionist measures aimed at blocking
certain types of imports or goods and investments from certain regions of the
world,'' Naimi said.
He stressed that the world oil market, stretched thin by surging demand and
years of low investment when prices were low, can provide "sustainable energy
stability'' when consumers don't feel gouged and producers get an adequate
return on their investment. Naimi said that even though he questions the
viability of US energy independence, Saudi Arabia thinks America should increase
conservation efforts and research and development of such alterative fuels as
ethanol.
"I believe it's beneficial tobegin research on alternative fuels that can go
hand in hand with hydrocarbons. We are going to need an alternative'' as oil
resources are depleted in coming decades, added the oil minister of Saudi
Arabia, which is the world's No. 1 oil exporter and the fourth-largest foreign
supplier to the United States.
On Capitol Hill, Democratic leaders gathered to denounce Bush and the
Republican Congress for what they say has been an overly close relationship with
big oil that has resulted in the prices of more than $ 3 a gallon. They attacked
Naimi's position.
"How dare they come to our country and say that our declaration of independence
is a myth,'' said House Democratic leader Nancy Pelosi of San Francisco.
Her Senate counterpart, Sen. Harry Reid of Nevada, said the experience of
Brazil, where a three-decade campaign based on increased production of sugar
cane-based ethanol has resulted in energy independence, shows the United States
can do with far less foreign oil.
"If they can achieve energy independence, certainly we can,'' Reid said.
The Democrats also linked the war in Iraq to high energy prices, blaming it
for bringing uncertainty to the world oil market and cutting Iraq's oil exports
because of insurgent attacks on pipelines, refineries and other facilities. The
Bush administration has already outlined the goal for domestic ethanol
production of 5 mm bpd by 2025. By comparison, US oil consumption today is 20 mm
barrels daily, a figure that is expected to increase to 26 mm by 2025.
"If we are successful, and that remains to be seen, in developing ethanol, we
will still be using imported and domestic oil and natural gas in very
significant quantities,'' Energy Secretary Samuel Bodman said in an appearance
with Naimi.
John Hamre, president of the Centre for Strategic and International Studies,
questioned why the public and politicians have focused on energy independence.
"I find it ironic. We don't say we should be financially independent from the
rest of the world... or food independent. We don't say we want to be
manufacturing independent,'' Hamre said. "We're misleading the American public.
We should be talking about energy interdependence.''
The debate, and the House's plan to vote on two measures, was just a small
part of a multifaceted spurt of action about gas prices. The House Energy and
Commerce Committee has scheduled a hearing on legislation that would grant the
executive branch the authority to raise minimum fuel efficiency standards on
cars without congressional approval.
The president has that power over trucks and sport utility vehicles, and he
recently used it to raise the mileage standards. His administration was sued by
10 states, including California, which claim the increase was insufficient.
Senate Majority Leader Bill Frist of Tennessee, who had pushed the $ 100 tax
rebate idea, may also try to attach energy legislation to the huge emergency
spending bill now under debate. One key provision he and other Republicans have
pushed for years is their plan for drilling in a slice of the Arctic National
Wildlife Refuge. That plan is vigorously opposed by environmentalists.
In the Capitol, House Speaker Dennis Hastert, R-Ill., met with ExxonMobil chief
executive officer Rex Tillerson as part of a GOP effort to be seen pressing big
oil companies to do more to increase gas supplies.
Source: San Francisco Chronicle