03-11-06

A senior Saudi oil official warned the notion that the United States could become energy independent was "only a dream" in the modern globalized economy.
Khalid Al-Falih, senior vice president of state-owned conglomerate Saudi Aramco, made his remarks as US addiction to foreign oil reverberated along the campaign trail before legislative elections. His warning was endorsed by top executives of US oil companies, which sponsored a daylong program on crucial US-Saudi ties at the annual conference of the National Council on US-Arab Relations, a private outreach group.

"Certainly, the notion of 'energy independence' is an attractive one at first glance and is very popular," Al-Falih said, but warned that in the global economy "the costs of pursuing the path of energy self-sufficiency would be high."
He criticised the view that new alternative fuels could wean the United States off foreign oil, much of it produced in volatile parts of the world. Despite impressive growth rates, renewable energies would only hit 6 % of the world's total energy supply by 2030, he said.

With no substitute available for jet fuel, gasoline and diesel, oil would "remain the dominant fuel for the foreseeable future," Al-Falih said. "Since domestic US production continues to gradually decline while US oil demand is rising, the prospect of self-sufficiency in oil is growing ever more remote."
Al-Falih said no country could insulate itself from fluctuations in world oil prices and demand, saying more, not less globalization of the market was needed, along with transparency of production, consumption and capacity data.

"Oil markets are global in nature, crude oil is a fungible commodity, and those two realities mean that energy independence in its literal sense of self-sufficiency can only be a dream, while energy interdependence is the reality."
US politicians from across the political spectrum, including former president Bill Clinton, have promoted energy independence on the campaign trail as a way of protecting the United States from costly and bloody foreign wars to secure energy supplies.