Mideast Oil: At What Price?

Bombing in Saudi Arabia triggers debate over US energy policies

The bombing at a US military facility in Saudi Arabia has driven home more than just the threat of terrorism. It also underscores the high price Americans must pay for their unslacking thirst for foreign oil.

That appetite is projected to grow dramatically in coming years, increasing the vulnerability of the oil-gulping US economy to upheavals in the unstable and unpredictable Persian Gulf.

The result is a renewed debate over the direction of US energy policy - over how best to cope with what many experts agree is a potentially serious threat to the nation's economy and way of life.

The US consumes about 18 million barrels of oil per day, about half of which now comes from abroad. About 17 percent of those imports are pumped out of the Gulf. The federal government forecasts that imports will rise to 60 percent of the total by 2015. About one-third of those imports will come from the Gulf - almost double the current amount.

Many experts, including government officials, say that with US consumption rising and the lack of an alternative energy source that can compete with oil, there is no viable alternative to the current policy of maintaining a massive military presence in the Gulf to protect two-thirds of the world's proven oil reserves.

That means, these experts concede, the US will have to continue propping up autocratic Gulf monarchies, some of which face growing internal dissent and anti-American sentiments. In addition, despite a deep post-cold-war aversion to foreign entanglements, the American public will have to accept possible repetitions of Operation Desert Storm and new terrorist strikes against some 20,000 US military personnel stationed around the Gulf.

Defense Secretary William Perry somberly acknowledged those risks Tuesday before a Senate committee investigating the truck bombing in Saudi Arabia: "We can expect further attacks on our facilities," he warned.

Irwin Stelzer, a resident scholar at the American Enterprise Institute in Washington, says US policy must have two components, including importing oil from as many non-Gulf sources as possible. "The second component is aircraft carriers," he says. "There is very little alternative to the current defense posture in the Middle East."

Paul Hogan of Harvard University's John F. Kennedy School of Government agrees: "If we did everything that we could think of to reduce our consumption of oil from imports, we would still be left with the problem of a volatile Persian Gulf, where we have strong strategic interests that require us to do the things we are doing in the military context."

He says that even if the US eliminated its purchases of Gulf oil, it would still have to use its military might to ensure the free flow of petroleum from the region. That is because if Western Europe and Japan were deprived of their Gulf supplies, they would be compelled to compete with the US for other sources, destabilizing world prices.

"Oil is a very fungible commodity," explains Professor Hogan. "It makes no real difference anymore where your oil comes from."

Those on the other side of the debate, however, argue that making the US military presence in the Gulf the linchpin of national energy policy is a short-sighted, dangerous, and costly approach.

"You are looking at a foreign policy that has a cost in human lives," says Carol Werner of the Washington-based Environmental and Energy Study Institute, an independent public-policy group.

She and other critics say current US policy will do little to cushion the country from a new oil shock, which some predict could be looming in the near future. If not caused by political changes in the pro-West Gulf states, a crisis could be triggered by a rapidly growing global demand for oil that could force major hikes in world prices, these experts contend.

"The threat is not the absence of oil supplies. It's what we are going to pay for oil," says G. Henry Schuler, head of the Energy and National Security Program at the Center for Strategic and International Studies in Washington.

Many experts contend the US should be concentrating on harnessing a wide mix of energy sources. While not ending reliance on oil imports, they say, such a policy would allow the US to scale back its forces in the Gulf and better cushion the economy against a new petroleum crisis.

"If you do not have options, the only option is war," asserts Scott Sklar, head of the Solar Energy Industries Association.

Due to major research breakthroughs, renewable, nonpolluting technologies once dismissed as too expensive and inefficient, such as solar and wind generators, are becoming as competitive as petroleum fuels, advocates say. Promoting greater use of such technologies, they say, would create new jobs, reduce pollution and obviate the need to tap new domestic reserves, such as those in Alaska's Arctic National Wildlife Refuge.

Instead of pursuing such an approach, supporters complain, the GOP majority in Congress is making it even harder for the US to reduce its dependence on oil imports. Republicans have been slashing funds for the development of renewable-energy resources and conservation programs. They argue the US shouldn't subsidize these technologies, and the US should tap new domestic oil supplies.

Congress also resists dealing with the prime source of rising oil consumption: automobiles. Bowing to the oil and automotive industries, say critics, lawmakers have refused to tighten fuel efficiency standards for cars. Furthermore, they say, standards remain too lax for light trucks, vans, and sports-utility vehicles, which are experiencing massive increases in sales.

Those, and other factors, are likely to ensure that the US will remain hooked on foreign oil.

Warns Ms. Werner: "All of this spells trouble."

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