Expert: There's Nothing Wrong With Importing Oil
SHOULD the United States worry that it will be importing, by government estimates, 60 percent of its oil by 2010?Skip to next paragraph
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Not according to John Lichtblau, chairman of the Petroleum Industry Research Foundation in New York. It is not a trade association and does not speak for the industry, but it does provide objective analysis of energy issues.
Oil imports do not threaten the national security of the US, while action to reduce imports would damage the economy, Mr. Lichtblau said at a Commerce Department hearing June 6. He pointed out that US dependency on imported oil has fluctuated greatly in the past 20 years. But it has never reached the 90 percent to 100 percent range of most Western European nations (except Britain and Norway, which are exporters) and Japan's 100 percent dependency on imports. South Korea and Taiwan also completely depend on imported oil, he says.
Also, the US is better off than those countries in reserves of natural gas - the energy source that competes most directly with oil. The US is 90 percent self-sufficient; the balance is imported from Canada.
Restricting oil imports or making them more costly would cause a marginal rise in US oil production, Lichtblau says. The US has produced at capacity since 1970. From 1980 to 1985, when high prices encouraged a near-doubling in drilling compared to previous years, US oil reserves outside Alaska declined, confirming that the US contains relatively little undiscovered oil. ``Our current level of oil-import dependency is structurally irreversible and will ... rise for the foreseeable future under any realistic scenario,'' Lichtblau says.
With the cold war over, US sources of imported crude are only likely to be threatened by local conflicts. Those ``could still be large, but they will be limited in scope and duration,'' Lichtblau says. He notes that only once has oil been used as a weapon by exporters. The 1973-74 Arab embargo failed to achieve its goal. Today, ``given the efficiency of worldwide oil markets, the old model of a targeted embargo will not work,'' Lichtblau asserts. Importing countries, particularly the US, still use oil as a weapon by banning imports from Iran, Libya, and Iraq.
Lichtblau takes issue with those who say that the price of imported oil should reflect the cost of US military preparedness to defend exporting countries. The Gulf war notwithstanding, he says there is no evidence that military expenditures were or are a function of US oil-import levels and sources. And in the post-cold-war period, the argument is theoretically invalid, he says.