US: November 13, 2008


NEW YORK - The head of oil giant Chevron Corp on Wednesday called on President-elect Barack Obama to create a national energy policy that promotes efficiency, opens up new areas for oil production and sets a clear policy on carbon dioxide emissions.


"The new administration has an opportunity to make realistic changes to our approach to energy and to create a comprehensive energy policy," David O'Reilly, chairman and chief executive of Chevron, said in a speech to the Council on Foreign Relations.

"And we need this new energy policy to be addressed as a strategic economic priority as well as national security priority," he said in a prepared text.

Energy issues jumped to the forefront of the US presidential election earlier this year as crude oil's jump to a record near $150 a barrel lifted retail gasoline prices for the world's largest consumer above $4 a gallon.

The surge in energy prices prompted new calls to open offshore areas that are currently off limits to drilling in a bid to reduce US dependence on imports and trim prices.

Oil prices have since crashed back down to about $57, but O'Reilly warned that oil prices would remain high.

"Although in recent months the supply and demand balance has improved, there are accumulating risks to the supply of reliable, affordable energy in the future," he said.

Oil prices would be supported by demand from the growing global middle class, tensions in international politics and increased desire for states to raise their revenue from oil resources, the difficulty in tapping new, more complicated reservoirs and limits on US production areas, he said.

The incoming Obama Administration, which has made development of alternative energy sources such as wind, solar and biofuels a centrepiece of its campaign, must not turn its back on fossil fuels, which contribute the vast majority of the world's energy, O'Reilly said.

While the United States should develop alternative energy such as wind and solar, experts estimate the world will still get more than 80 percent of its energy from oil, natural gas and coal in 2030, he said.

The United States can moderate its demand by increasing energy efficiency, he said, and should diversify its energy supplies.

"Our path to energy security cannot rely on just one option, it must pursue many options," he said.

Along with that, the country must make a renewed commitment to energy trade and investment and bolster science and engineering capabilities, O'Reilly said.

He also called for a transparent, predictable policy for carbon dioxide, the greenhouse gas emitted by burning fossil fuels that is blamed for contributing to global warming.

(Reporting by Matt Daily, editing by Dave Zimmerman)


Story by Matt Daily


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