Analysis: Energy security a global issue

By ROSALIE WESTENSKOW, UPI Correspondent  |  Aug. 2, 2007 at 12:21 PM
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WASHINGTON, Aug. 2 (UPI) -- Energy security relies not on independence, but a variety of domestic and international cooperative initiatives, a report from the National Petroleum Council says.

The 400-page document, "Facing the Hard Truths About Energy," reviews the status of global oil and natural gas until 2030 and presents a list of possible solutions for avoiding an energy crisis as well as recommendations for increased energy security in the United States. These steps take the focus away from physical independence and shine the spotlight on healthy global energy activity: moderate demand, expand and diversify energy supplies, and strengthen global energy trade and investment.

"Energy independence should not be confused with energy security," said Frank Verrastro, director of the Energy and National Security Program at the Center for Strategic & International Studies, a bipartisan public policy organization that worked on the report with the NPC, an advisory body for the U.S. Department of Energy.

A tendency to convey energy independence as isolationism in political circles sends a bad message, Verrastro said, because such a model represents an unrealistic plan, contradicts foreign policy goals and opposes treaty obligations.

In order for the United States to meet rising energy demands -- projected to increase by 50 percent to 60 percent by 2030 -- global partners must play a role, Verrastro said Wednesday at a panel discussion on the report hosted by CSIS.

"Exhibit A to prove this point is the response after (Hurricanes) Katrina and Rita," he said. "The United States lost production capacity for several months and refining capacity. ... If it wasn't for a global distribution system ... we'd have been in a deep hole."

Currently, both the world's largest supply centers of oil and its largest consumers reside in concentrated areas with little geographic proximity to each other. This requires massive infrastructure for transporting some 85 million barrels of oil around the world each day.

However, this oil map will undergo some significant changes in the next 25 years, requiring a different paradigm for energy security, panel participants said.

The report's authors project oil exports from the Middle East will rise from 20 million barrels per day in 2005 to 36 million bpd in 2030, while imports will increase from 4 million bpd to 11 million bpd in Asia and from 11 million bpd to 15 million bpd in the United States.

Focusing on geographical diversification of suppliers would eliminate some of the risk that comes from relying heavily on a small number of geographic areas for oil and natural gas, Verrastro said.

"There's ways to improve energy security by reducing demand, increasing supply of all forms of energy -- conventional, unconventional and alternatives -- and suppliers," he said.

The rising rate of demand can be lessened somewhat through efficiency, said Adam Sieminski, chief energy economist for Deutsche Bank AG, a global investment bank.

"In the U.S., one of the key ways of accomplishing this was determined (in the report) to be fuel economy standard for passenger vehicles and light trucks using existing technologies," Sieminski said. "Some 3 (million) to 5 million barrels of oil a day could be saved" by doing this.

Tighter standards for appliances, portable electronic devices and commercial buildings could also mitigate demand, though replacing energy-wasting devices within buildings would probably lead to a quicker transformation, said William Finger, a senior associate with the Cambridge Energy Research Associates, an energy-consulting firm.

"The structures that we're talking about have lives of something like 80 years," he said. "However, there are certain things that can be replaced within the structures that lower energy use," such as windows, heating and cooling systems, lighting devices and appliances.

Another major factor in energy security lies in ensuring the availability of an experienced workforce to conduct research and development projects, experts say. This poses an immediate concern for the United States, because within the next decade more than half of the country's energy sector workforce will be eligible for retirement. At the same time, the number of students graduating from universities with applicable degrees is shrinking. If this trend continues unchecked, the United States will find itself in a difficult position, said Rodney Nelson, vice president for strategic marketing at Schlumberger Oilfield Services, a corporation that provides technology and services to its customers in the oil and gas industry.

"Unless the U.S. backfills these positions, you could see a real leadership shift in that area from the U.S. to other countries," Nelson told United Press International.

In the end, though, energy security at home relies on energy security abroad, Sieminski said, suggesting energy concerns be more aggressively included in policies that address other major global issues.

"What we really need to do here is integrate energy policy across trade, economic, environmental and foreign policies in the U.S.," he said. "The expansion of dialogue with other nations is critical and we need to continue to promote a global and transparent energy marketplace."



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