Saudi Minister Scoffs At US Energy Independence

From The San Francisco Chronicle:

Saudi Arabia's oil minister scorned the popular notion that America can achieve energy independence as a myth, saying Tuesday the idea denies the existence of interdependent global markets and the need for countries to work together for oil-price stability.

Top Democrats in Congress, who argue that America can become independent of foreign energy sources within 10 years, reacted heatedly to Saudi minister Ali Naimi's statement, insisting their goal is realistic.

The exchange came as Congress was locked in a testy debate about how to react to record high gasoline prices, an issue that both parties recognize has jumped to the top of voters' election-year agendas.

Politicians from President Bush on down are scrambling to respond to the public's anger. Republican leaders said Tuesday the House will vote today on a bill intended to strengthen Federal Trade Commission tools to investigate allegations of oil price gouging. They also indicated votes are scheduled today or Thursday on legislation that the GOP says would speed construction of new refinery capacity by granting quicker regulatory approvals.

Showing the rush by Republican congressional leaders to let voters know they've heard the call for action, both hurried bills will be considered under rules requiring two-thirds majority approval for passage instead of the usual simple majority vote. That means passage will depend on Democratic votes, and it wasn't clear Tuesday how the minority party will react.

But the gas price issue also has split the Republican leadership.

House Majority Leader John Boehner, R-Ohio, denounced the proposal by Senate Republican leaders to give every taxpayer $100 to make up for higher gas prices.

"Trying to satisfy voters with a $100 rebate is insulting,'' Boehner told reporters. He said constituents thought the proposal "was stupid.''

Bush's top economic adviser, Edward Lazear, also cast doubt on the rebate idea, saying the administration is studying it, but "is that the best way to be using our tax revenues? Is it the most efficient way to allocate our resources?"

The Saudi oil minister Naimi, in Washington for a Saudi-U.S. energy conference, rejected the idea that energy self-sufficiency is a worthwhile goal for America.

"While self-reliance is appealing, the efficacy of such an approach for achieving long-term energy security is an illusion built on the myth that security can be achieved through protectionist measures aimed at blocking certain types of imports or goods and investments from certain regions of the world,'' Naimi said.

He stressed that the world oil market, stretched thin by surging demand and years of low investment when prices were low, can provide "sustainable energy stability'' when consumers don't feel gouged and producers get an adequate return on their investment.

Naimi said that even though he questions the viability of U.S. energy independence, Saudi Arabia thinks America should increase conservation efforts and research and development of such alterative fuels as ethanol.

"I believe it's beneficial to begin research on alternative fuels that can go hand in hand with hydrocarbons. We are going to need an alternative'' as oil resources are depleted in coming decades, added the oil minister of Saudi Arabia, which is the world's No. 1 oil exporter and the fourth-largest foreign supplier to the United States.

On Capitol Hill, Democratic leaders gathered to denounce Bush and the Republican Congress for what they say has been an overly close relationship with big oil that has resulted in the prices of more than $3 a gallon.

They attacked Naimi's position. "How dare they come to our country and say that our declaration of independence is a myth,'' said House Democratic leader Nancy Pelosi of San Francisco.

Her Senate counterpart, Sen. Harry Reid of Nevada, said the experience of Brazil, where a three-decade campaign based on increased production of sugar cane-based ethanol has resulted in energy independence, shows the United States can do with far less foreign oil. "If they can achieve energy independence, certainly we can,'' Reid said.

The Democrats also linked the war in Iraq to high energy prices, blaming it for bringing uncertainty to the world oil market and cutting Iraq's oil exports because of insurgent attacks on pipelines, refineries and other facilities.

The Bush administration has already outlined the goal for domestic ethanol production of 5 million barrels a day by 2025. By comparison, U.S. oil consumption today is 20 million barrels daily, a figure that is expected to increase to 26 million by 2025.

"If we are successful, and that remains to be seen, in developing ethanol, we will still be using imported and domestic oil and natural gas in very significant quantities,'' Energy Secretary Samuel Bodman said in an appearance with Naimi.

John Hamre, president of the Center for Strategic and International Studies, questioned why the public and politicians have focused on energy independence.

"I find it ironic. We don't say we should be financially independent from the rest of the world … or food independent. We don't say we want to be manufacturing independent,'' Hamre said. "We're misleading the American public. We should be talking about energy interdependence.''

The debate, and the House's plan to vote on two measures, was just a small part of a multifaceted spurt of action about gas prices.

The House Energy and Commerce Committee has scheduled a hearing today on legislation that would grant the executive branch the authority to raise minimum fuel efficiency standards on cars without congressional approval.

The president has that power over trucks and sport utility vehicles, and he recently used it to raise the mileage standards. His administration was sued Tuesday by 10 states, including California, which claim the increase was insufficient.

Senate Majority Leader Bill Frist of Tennessee, who had pushed the $100 tax rebate idea, may also try to attach energy legislation to the huge emergency spending bill now under debate.

One key provision he and other Republicans have pushed for years is their plan for drilling in a slice of the Arctic National Wildlife Refuge. That plan is vigorously opposed by environmentalists.

In the Capitol, House Speaker Dennis Hastert, R-Ill., met with ExxonMobil chief executive officer Rex Tillerson as part of a GOP effort to be seen pressing big oil companies to do more to increase gas supplies. 


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