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Panel eyes military’s energy costs

Ben Lando, United Press International (UPI)
The growing cost of the U.S. military’s energy demand is a national security issue and needs to be scaled back, said former CIA Director R. James Woolsey and two congressmen at the launch of a bipartisan task force.

Woolsey, intelligence chief during the Clinton administration, joined Reps. Roscoe Bartlett, R-Md., and Steve Israel, D-N.Y., Thursday to unveil the Defense Energy Working Group, to be made up of members of Congress and advisers, like Woolsey, who view the Pentagon’s appetite for energy as a vulnerability to the country.

“The issues for Department of Defense are relevant to society as a whole,” said Woolsey, who sits on the National Commission on Energy Policy.

Consuming more oil, specifically, and energy, in general, than any other single entity in the country, the Defense Department spent $10.6 billion on it in 2005.

The price of crude oil cruised toward $80 a barrel amid the violence in the Middle East this week, and the trio painted the U.S. military’s role in an energy crisis in drastic terms and immediate concern.

“The military as a microcosm of the United States, which is a microcosm of the world, faces a very uncertain energy future,” Bartlett said.

Israel called energy consumption by the military — and United States as a whole — a national security threat comparable to communism, World War II and the race to space against the former Soviet Union.

“It’s like a 1970s movie remade in 2006,” said Israel, who worried what would happen if Iran, the world’s third-largest oil producer, stopped exporting oil as it has threatened to do in response to U.N. Security Council sanctions over its nuclear program.

The Defense Energy Working Group will be a bipartisan collection of U.S. representatives who will assess current Defense Department programs and pave a way for a more robust plan to use less energy.
(21 July 2006)
Related : Lawmakers propose formation of energy working group (Air Force Times)
US Inaugurates Defense Energy Working Group (Defense Industry Daily)

Drain America First

Editorial, New York Times
Congress’s default response to the nation’s manifest energy problems is to increase supply, while doing nothing to reduce demand. Earlier this year, the House rebuffed a modest effort to increase fuel economy standards while approving a bill whose main purpose is to end a long-standing federal moratorium on drilling for oil and gas on the Outer Continental Shelf. In similar spirit, the Senate today will take up a bill to open eight million more acres of the Gulf of Mexico to oil and gas drilling.

The Senate measure is narrower and less mischievous than the House bill. Yet it, too, is aimed exclusively at increasing production.

This is mind-boggling. The bill’s stated purpose is to reduce fuel prices. But while the gulf may hold enough natural gas to affect the price of that commodity, the same cannot be said of oil. No matter where it looks, a country that consumes one-quarter of the world’s oil supply while holding only 3 percent of the reserves will never be able to drill its way to lower oil prices, much less oil independence.
(25 July 2006)

China to issue new policies to curb energy consumption

Xinhua, Forbes
The Chinese government will issue a slew of new polices to curb energy consumption and promote conservation, Xinhua News Agency reported, citing vice-finance minister Liao Xiaojun.

‘The pricing of energy products has long been too low, which fails to reflect the scarcity of the resources and tends to foster using them with low costs,’ Liao was quoted as saying.

He said the entire mining industry, rather than some miners as is currently the case, need to pay for exploring and developing resources in future.

The government will also introduce fuel tax as soon as possible and make tax breaks conditional on use of energy-saving equipment, Liao said.
(26 July 2006)

A new Silk Road between China and the Gulf countries

AFP and DPA via Gulf Times (Qatar)
China and the Gulf Co-operation Council (GCC) have completed a round of talks on a free trade agreement as part of Beijing’s efforts to secure long-term supplies of oil, state press reported yesterday.

Chinese trade officials held talks with council members Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates in the eastern province of Zhejiang from July 19-22, the Beijing Morning Post reported.

“Once we establish a free trade zone, then a new, unlimited ‘Silk Road’ will be formed,” the newspaper quoted Vice Minister of Trade Yi Xiaozhun as saying.

More than 40% of China’s oil imports come from the six Gulf states so Beijing is eager to secure long-term and stable supplies, especially as crude prices continue to rise to record heights, the newspaper said.

…In principle, the GCC plans a common market among member states in 2007 and a monetary union and a single currency by the start of 2010. However, a slew of political and economic differences among member countries ruled by powerful and sometimes competing dynasties has gotten in the way.
(25 July 2006)

Japan joins the energy race

Hisane Masaki, Asia Times
TOKYO – Resource-poor Japan is revving up its diplomatic drive to strengthen relations with the oil- and gas-rich countries of Central Asia amid stubbornly high oil prices.

Japan invited foreign ministers of Central Asian nations to talks early last month. And in a more significant move that highlights how passionately Japan is wooing the Central Asian nations, Prime Minister Junichiro Koizumi plans to visit the region in late August, becoming the first Japanese premier to do so.

He and the leaders of Kazakhstan and Uzbekistan, as well as possibly others in the region, are expected among other topics to discuss economic cooperation, anti-terrorism measures and cultural and personnel exchanges.

Japan’s energized diplomatic drive in Central Asia comes at a time when Tokyo is implementing its new energy strategy aimed at ensuring stable oil, gas and other resource supplies in the long term to feed the world’s second-largest economy.

The Ministry of Economy, Trade and Industry released its new national energy strategy at the end of May. It calls for, among other things, strengthening ties with resource-rich countries, promoting nuclear energy, and securing energy resources abroad through the fostering of more powerful energy companies. The new strategy specifically calls for increasing the ratio of “Hinomaru oil”, or oil developed and imported through domestic producers, from the current 15% to 40% by 2030.
(28 July 2006)