Thursday, February 02, 2006

OPEC Threatened by Bush Oil Statement

OPEC and oil industry executives were scrambling to counter President Bush's State of the Union pledge to reduce America's dependency on Middle East oil by 75% over the next 16 years. Feeling the noose tighten around the glutinous industry, OPEC ministers warned of policy changes that would threaten development of new oil production in that region. (MSNBC: Opec warns on Bush oil pledge).

One minister stated, "Comments like that are unrealistic. Everyone knows the world will continue to depend on Middle East imports." He pledged to work with the EU in formulating counter measures, describing the European Union as being "more aligned with Opec's view".

US Energy Secretary Samuel Bodman attempted to calm OPEC's fears with some spin of his own. The Secretary said, "The president's goal ... is an improvement in our national security that would come from a more readily available supply of domestic motor fuel." Continuing to backpedal he stated, "It was not meant to suggest anything related to the politics of the situation. ... It was merely meant to give an example." (Washington Post: Mideast Still a Player in Oil Markets).

The Presidents statement in the State of the Union requires no back-pedaling and it certainly does not warrant political spin. We certainly do need to eliminate our dependency on, not only Mid-Eastern oil, but on all oil from unstable regimes including Nigeria, Latin America, and Russia. When you dig a bit deeper, however, you learn that the goal outlined in Tuesday's address is not all that grandiose. Only 60% of US oil demands are imported, and only 20% of our imported oil comes from the Middle East. We're not as heavily dependent on Mid-Eastern oil as popular opinion would have us believe.

Still, the President's stated direction does not go far enough. We need to invest heavily in the development of complete replacements for fossil fuels and petroleum based byproducts. We need to develop a viable long-term fuel strategy that does not rely on international trade. That vision is still lacking in Washington, and it is certainly lacking in the Energy Industry. Rather than leading us into the future, the Energy Industry, like a short-sighted drug pusher, is focused on increasing our addiction, increasing internal profits, and stifling any move to develop alternatives.

In 2005, Exxon posted the largest corporate profits in history. Smart business sense would demand that significant portions of those profits be directed towards alternative energy research, yet that is not happening. The oil industry needs to learn from the tobacco industry. Seeing the wave of anti-smoking sentiment sweeping the world, for the past 20 years the tobacco industry diversified and dropped their total reliance on a single product who's days were numbered. The oil industry would do well to learn the same lesson. They have the ability and the means to develop and move us to the energy solution of the 21st century. Unfortunately, that will take vision, leadership, and initiative - three traits sorely lacking in today's corporate America.


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