Britain turns to oil diplomacy with OPEC
"The old idea of OPEC-bashing has proved an absolutely fruitless course." From his office overlooking the Thames, Britain's Energy Secretary David Howell was describing a significant shift in Western attitudes toward the powerful Organization of Petroleum Exporting Countries -- a shift from hostility to cooperation.Skip to next paragraph
Subscribe Today to the Monitor
"The most important thing now is not to shout and complain and say we wish [ oil] prices were lower," Mr. Howell told this correspondent Aug. 1, "but to see that their evolution is stable and not erratic."
OPEC's firm grasp on the world's oil price levers cannot easily be broken by Western interets. So the change from an adversarial to a conciliatory role -- advocated, says Mr. Howell, by the consumer countries of the International Energy Agency (IEA) -- does now grow out of a desire to stem inevitable price increases.
Instead, the hope is to keep the increases steady -- to iron out the abrupt glut-to-famine jolts that stymie long-range planners and cause panic at the gas pumps, and to recognize what he calls "the potential for OPEC as a stabilizing force."
Mr. Howell insists that Britain, Which reached net petroleum self-sufficiency earlier this year in its North Sea oil production, has no thought of joining OPEC."We think consumer thoughts," he said, adding that "our interests as a consumer are far greater than our producer interests." Even at tis peak in the mid-1980s, North Sea oil will account for only 4.5 to 5 percent of Britain's gross national product, he says.
In a speech at a London energy conference in mid-June, Mr. Howell was among the first to articulate the new trend in IEA thinking -- to the mild suprise of his own Cabinet colleagues.
Howell admits that OPEC, long cast as the villain in the world energy drama, does not exhibit great unity. "But insofar as they have a long-term coherent view," he says, "it is one that recognizes the need for dialogue with the OECD [ Organization for Economic Cooperation and Development] countries."
And he is hopeful on several fronts:
* Britain's own conservation program appers to be taking root "at a faster pace than I frankly thought would be the case," he says. After years of increase, the nation's energy consumption from March to May dropped 9.3 percent over a similar period last year, led by 16.8 percent drop in petroleum consumption. Some of the drop must be attributed to lowered industrial demand as the recession bites more deeply.
* After years of what he calls "chopping and changing" on nuclear energy, the nation now has a coherent plant for building toward its goal of 30 percent nuclear energy by the year 2000 -- perhaps even more if government decisions in the mid-'80s favor the fast-breeder reactor.
* In spite of the recession, he sees "tremendous-incentives to invest in energy alternatives" (as Britain is doing in coal fields) and "much more adventurous thinking" about wnd, solar, and other alternatives. Such investment , he says may help weaken and shorten the recession
* Oil prices in 1980 have so far been more stable than in 1979. That is partly due to an oversupply resulting from the economic slowdown, but also, he says, due to a "focus on common objectives" between OPEC and the West.
But with summer traffic soaring beneath the trees under his window and with the nation's use of motor fuel still rising, Mr. Howell ends on a more sober note. Until oil is priced "in relation to the other alternatives, rather than everything else being priced in relation to oil," he says, "we are in a very dangerous and vulnerable situation and anything could go wrong at any level."