Oil consumers on both sides of the Atlantic on Thursday outlined plans to secure energy supplies and reduce consumption amid growing concern over rising oil prices, potential terrorist threats and surging demand from avoracious China.
In the US, prominent national security hawks have formed an unlikely alliance with environmentalists to lobby US law-makers with a plan to reduce dependence on foreign oil imports as a vital step towards achieving national security.
Their proposal, called “Set America Free”, focuses on reducing oil consumption by the transportation sector, which accounts for about two-thirds of domestic demand. It envisages paying $12bn in incentives over four years to carmakers and consumers to create a market for flexible-fuel cars and encourage the use of hybrid gas-electric cars.
It came as the European Union’s top energy official on Thursday vowed to put the security of the bloc’s energy supply at the heart of his tenure. AndrisPiebalgs, appointed EU energy commissioner in November, said: “My most important priorities in the coming months are energy efficiency and security of supply.” He said higher energy prices and the growing appetite for oil and gas from emerging economies presented policymakers with a “substantially changed” situation compared with five years ago.
Ministers from the Organisation of the Petroleum Exporting Countries meet this weekend in Vienna as the oil price has been propelled towards $50 a barrel amid cold weather in the US. Traders increasingly believe that last year’s 30 per cent rise in oil prices has ushered in an era of higher levels with US oil futures priced at more than $40 a barrel for the rest of the decade.
After some Opec ministers last week called for production cuts, ministers from Kuwait, the United Arab Emirates, Iran, Venezuela and Indonesia this week all said Opec should maintain its current quota of 27mbarrels a day.
Ali Naimi, the oil minister for Saudi Arabia, Opec’s largest producer, said Opec could afford to wait a little longer before any decision was taken to alter the cartel’s production policy.
“Opec needs to wait until we get closer to the second quarter, possibly in the March meeting, possibly longer,” Mr Naimi told Reuters. But high prices are already provoking a reaction in consuming countries. Frank Gaffney, president of the Center for Security Policy and a former assistant secretary of defence under Ronald Reagan, outlined the “Set America Free” plan yesterday, saying a “perfect storm” of geopolitical, economic and environmental concerns had created the need for urgent action.
Mr Gaffney said a policy of denying oil revenue to some oil exporters would help “erode the grasp of tyrannies round the world” that use oil resources to “prop themselves up, oppress their people and threaten us”. He urged President George W. Bush to use his position to educate the American public about the dangers of foreign oil dependence. “This is . . . an incipient national security emergency and must be addressed as such,” he said.
The group of conservative Washington think-tanks plans to bring the blueprint to Congress with hopes of producing legislation this year.
Mr Piebalgs, responsible for co-ordinating EU energy policy, said energy efficiency could come through lower consumption, by forcing household goods manufacturers to make their products more efficient and insisting on greener buildings.
