RIYADH, Nov 10: US energy reliance on the Middle East is not as significant as it used to be in the past, admits Guy F. Caruso, the administrator (head) of the US Energy Information Agency – the statistical arm of the US Department of Energy.
“With the US roughly importing about 12 million barrels a day, Canada and Mexico are the top crude exporting countries to the US. Venezuela and Saudi Arabia come only after them,” he emphasised.
Despite the political rhetoric, especially in the election year, to reduce dependence on the ‘unstable and the unreliable Middle East’, Caruso admits that energy independence is an unrealistic, ‘unachievable’ objective.
He was in Riyadh presenting the ‘Energy Outlook’ at the International Energy Forum Secretariat. Courtesy Ambassador Arne Walther (secretary general of the IEFS), Caruso in an exclusive talk with Dawn discussed US position on global energy imbroglio.
Being the world’s largest economy, the US consumes 21 million barrels a day — roughly one fourth of the total global requirements.
It has 220 million registered vehicles and 75 per cent of its total crude wants are basically required to meet the needs of the transportation sector.
Caruso forcefully denied the notion that war on Iraq was due to oil. ‘It is rather oversimplification to stress that the war was due to oil.
“I think people don’t realise the global nature of the industry. Our role requires us to keep our troops in the region, oil or no oil, and this is despite the fact that our major crude imports are not from this region,” he stressed.
Washington is also endeavouring to step up its domestic production, aiming to reduce its reliance on crude imports from roughly 60pc of its total requirements currently to about 55pc over the next five years or so.
Caruso though conceded that despite the rhetoric to develop alternatives, bio-fuels may not contribute significantly to the global energy mix – rising to some 10 per cent by 2030 from the current two per cent.
A shift towards coal for generating electricity though was visible, he pointed out admitting fossil fuel would remain the choice in near future too.
Referring to major challenges in the foreseeable future, the EIA administrator says major consumption growth is to come from the emerging Asian economies.
On the supply side, the Middle East would continue to meet the global incremental requirements. However, there are a number of issues to be handled.
Caruso cited the example of Kuwait, where ‘Project Kuwait’ remains mired in controversies for more than a decade now and the current security situation in Iraq making it impossible to develop these two countries with tremendous potential. Hence despite all the bottlenecks, the global crude production would go up from around 80 million bpd in 2004 to 118 million bpd by 2030 – and most of it would come from the Middle East.
Geo-politics, resource nationalism, lack of investments in regions and countries where there was oil still available beneath the surface, lack of access to the international oil companies (IOCs), refining bottlenecks, alarming security situation in some oil rich regions were all causing the industry to stutter, he exclaimed.
When pointed out that the free market leader also used the same argument (security) in blocking the sales of the US energy firm (Unocal) to Chinese investor, despite being the highest bidder, Caruso was gracious enough to concede: “The decision was apparently not taken in one of our most enlightened moments.”