Expect 'very volatile oil prices' over next year or two: Bodman

Washington (Platts)--21Feb2006

US oil prices will be high and volatile for at least the next year or
two, US Energy Secretary Samuel Bodman said Tuesday.

     "We are facing a situation where the suppliers have been having increased
difficulty keeping pace with demand," which has led to "very volatile oil
prices," Bodman said in a live television interview with Bloomberg TV. "I
think that's something over the next year or two that we are going to have to
deal with."

     Bodman also said Americans would have to "get used to paying more for
energy at least for the near term," until new Bush administration policies to
boost alternative energy usage go into effect.

     President George W. Bush late last month, in a State of the Union
address, declared the U.S. was addicted to foreign oil and made a national
pledge to reduce oil imports from the Middle East by 75% by 2020. He said the
US would accomplish its goal by boosting funding for energy technologies,
especially ethanol, solar and nuclear. 

     But Bush's goal of reducing Middle Eastern imports would be nearly
impossible to impose since the government could not prevent private companies
from purchasing from any nation they chose, unless there were an embargo
against that company, something the administration has not suggested.

     The day after Bush's speech, Bodman said that the pledge should not be
taken literally, and that the cuts in Middle East oil were "merely an example"
of what might be done.

		--Cathy Landry, cathy_landry@platts.com

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