RIYADH, Feb 11: Oil and energy issues are very much in headlines, once again, more for political reasons than for market issues. Political considerations continue to weigh heavily, as always, in the minds of the energy fraternity.

Tension over what some regard as Russia’s willingness to use its energy resources as a political weapon in the former Soviet Union region.

Crude has also been one of the major issues President Bush dealt with in his state of union speech last week. That President Bush decided to raise the issue while the tension between the US, its allies in the West and Iran was already building up brought to fore another dimension to the already delicate global crude balance.

When President pledged to reduce the American dependence on Middle East by reducing crude imports from the region by 75 per cent, it caught many off guard.

Many felt it was more directed at the domestic audience. In the absence of a serious master plan, on ways to reduce this dependence, it appears more of a hollow call, apparently to silence his critics who blamed him for the nation’s growing problems these days, many asserted.

The United States today imports, almost half of its total requirement — averagely over 10 million barrels a day of crude — from all over the globe. The imports from Saudi Arabia in the last few months have averaged around 1.2m barrels per day. The combined crude exports from the region have roughly been around 2.0-2.2 million barrels a day. Thus the crude supplies to the US from the region averages about 20-22 per cent of the total US crude imports currently.

Global crude consumption in the meantime is also rising –- slowly but steadily. And although one may wish to the contrary, the fact remains that the incremental supplies in future too have to come from this very region. Despite pumping in excess of 35 billion barrels into the global markets over the past five years, the proven oil reserves in the region have reportedly surged by nearly 68 billion barrels over the same period.

By the beginning of 2006, the recoverable crude oil resources in the Arab region and Iran peaked at nearly 743.1 billion barrels, compared to 675.6 billion barrels at the end of 2000, the Energy Information Administration (EIA) of the US Department of Energy said in a recent report. The reserves at the beginning of 2006 thus accounted for nearly 57.5 per cent of the world’s total extractable oil potential of around 1.29 trillion barrels. The reserves are thus much higher than the current market share of the region and in future, if the supplies get tight, this would only have to creep up.

According to Paris based OECD energy watchdog IEA forecasts, the oil exports from the region was destined to go up from the current 29 million bpd to 33 million bpd in 2010 and 50 million bpd by 2030.

The Saudi crude production, according to the IEA was in the meantime, also expected to go up from the current 10.4 million bpd to 11.9 million bpd in 2010 and over 18 million bpd by 2030, roughly the period by when President Bush is pledging to drastically cut the dependence on the Middle Eastern crude.

Hence despite the pledge the global call on crude from the region is all set to grow. The IEA estimates that if other constants remain same, and indeed that is a significant if, the region’s (Middle East and North Africa) share in the global crude market would go up from the current 35 per cent to 44 per cent by 2030.

And that was the reason that Saudi Arabia, the kingpin as far as quenching the global thirst is concerned, was taken aback by Bush pronouncement. “I was taken aback,” the Saudi envoy in Washington Prince Turki al-Faisal told the CNN after the Presidential pronouncements.

Indeed such calls have been given in past too. In the aftermath of the 1973 oil embargo, there were similar calls at the political level. But as things returned to normal and the world got used to a comparatively higher level of crude prices, the push and the zeal to look for alternative sources dwindled. Finding a replacement of fossil fuel requires long-term investment, concerted efforts and political commitment. Much greater funding at R&D level would be required, in case real progress has to be made in this direction and this is far from granted -– as yet.

Democrat Senator Kerry in his presidential bid also raised, rather forcefully, the spectre of reducing dependence on the Middle Eastern oil. But that also appeared mere rhetoric then, without much basis and programme.

In the absence of a real alternative to fossil fuel, as yet and since this may take considerable more time before a viable breakthrough in the field could be made, pronouncements such as the above may in fact scare investments away from the sector. That could be disastrous in many ways.

As per the conservative estimates of IEA at least $1 trillion is required to be invested in the sector, by 2030, if it has to meet the growing global demands.