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US Foreign Oil Dependency on Increase, say Experts - 2003-10-16

Thirty years ago, the United States faced an energy crisis as mostly-Muslim, oil-producing nations imposed an oil embargo, hoping to force a halt of U.S. support for Israel. Today, U.S. dependence on foreign oil is far greater than it was in the early 1970s. Panel of experts recently gathered in Washington to examine America's energy situation and its choices for the future.

Former Energy Secretary James Schlesinger says the 1973 oil embargo had a devastating short term effect on the United States, but an even costlier long term effect on OPEC nations that conspired to withhold fuel. In the years that followed, the United States built more fuel-efficient cars and sought alternate sources for oil. OPEC's market share fell and, by the mid-1980s, world oil prices collapsed.

"The Saudis did learn in that period that there was a need for stable prices, that there was a need to show that they were the dependable sources of supply," said Mr. Schlesinger, speaking at the Washington-based Heritage Foundation. "If they were not, other places in the world were discovered that could produce oil: the North Sea, West Africa. Not only that, but the world's appetite for oil could be curbed if prices were high enough."

But Mr. Schlesinger and other analysts contend that any progress the United States made in the 1970s and 80s towards stable energy supplies at reasonable prices is at risk.

"Our dependence [on foreign oil] has almost doubled since 1973," added Gal Luft, co-director of the Institute for the Analysis of Global Security. "In 1972, the United States imported 28 percent of its oil; today it imports 55 percent, and projections show that 25 years from now it will import 70 percent of its oil," he continued. "Our dependency is growing, and our dependency on Middle East oil is also growing. We will import 50 percent of our oil from the Middle East by 2025."

Since the September 11, 2001 terrorist attacks in New York and Washington, the Bush Administration has renewed U.S. efforts to secure oil from non-OPEC sources, especially from Russia.

Analysts say diversifying petroleum sources is a worthwhile goal, but caution that, at best, it constitutes a short term solution. That is because the proven oil reserves of non-OPEC producers average about 15 years at current production levels, versus more than 70 years for OPEC nations.

James Schlesinger says, as global demand for oil grows and reserves dwindle, the United States will have no choice but to turn to OPEC nations to satisfy its energy needs.

"We should not deceive ourselves, as long as we are dependent on oil to the degree that we are, that there is a substitute for the Middle East [as a source of oil]," said Mr. Schlesinger. "Russia sells all of its oil. Over time, non-OPEC oil will be depleted and we will become more dependent on oil from the Middle East."

Mr. Schlesinger says he sees no immediate threat of another oil embargo on the horizon, but that history is worth bearing in mind.

What course should the United States chart for its future energy needs? Gal Luft says, first and foremost, Americans must have more than one fuel choice for powering their vehicles.

"Today, the only product that all of us consume, in which we have no choice, is transportation fuel," he explained. "You have a lot of choices when you buy a cup of coffee or a pair of shoes. But when you buy transportation fuel, it is gasoline, gasoline, and gasoline. That has to change."

Mr. Luft recommends a concerted effort to develop alternate fuels and to promote their use. Other suggestions at the Washington forum included increasing America's petroleum stockpile, known as the Strategic Petroleum Reserve, and to improve U.S. relations with the Muslim world.