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Study Predicts U.S. Need for Oil From Middle East Will Increase

(2/15/01 3:32:07 AM PT)

By John J. Fialka, Staff Reporter of The Wall Street Journal

WASHINGTON -- A new study of the world's energy outlook predicts the U.S. and other industrial nations will become increasingly dependent on oil from the Middle East in the next 20 years, and will need the region's most unstable countries -- Iran, Iraq and Libya -- to raise their output.

The three-volume study, "Geopolitics of Energy Into the 21st Century," backed by a bipartisan group of congressional leaders and energy experts, is expected to be used to bolster a number of Bush-administration initiatives, including drilling for oil in an Alaska wildlife refuge and continuing high levels of defense funding to protect shipping lanes extending from the Middle East.

The report, conducted by the Center for Strategic and International Studies, a defense and foreign policy think tank here that includes moderates and conservatives from both parties, concludes that no breakthroughs in technology or energy conservation on the horizon will significantly reduce the world's dependency on oil, coal and other fossil-fuel energy over the next two decades. Oil-rich Persian Gulf nations will have to expand oil production by almost 80% during that period to satisfy world demand, particularly fast-growing demand from China and India, the study says.

The potential for war, terrorism, price gyrations and supply interruptions will remain high, the study says, because industrial nations have developed no major alternatives to buying oil from the region.

The study says that to find more oil, new investments will have to be made in countries such as Iran and Libya that currently face unilateral trade sanctions from the U.S. And getting more oil from Iraq, which faces international trade sanctions stemming from the Gulf War, will be "crucial" to meeting the world's expanded energy demands, the study says. Iraq holds nearly 11% of the world's known oil reserves, second only to Saudi Arabia's 25%.

"As long as oil is flowing," its price remains relatively stable, said Larry Goldstein of the New York-based Petroleum Industry Research Foundation, a member of one of eight task forces that prepared the report. He said the U.S. will be required to rethink its policy of imposing trade sanctions on oil countries and will need to perpetuate its role as international policeman to prevent future Middle East crises.

John Passacantando, executive director of Greenpeace U.S.A., asserted that finding more ways to achieve energy efficiency would be a better near-term solution to the world's energy shortfall than the center's plan to drill for more oil.

"Our most modern research tells us that if we just burn more oil, we will destroy the earth's ecological systems through global warming," he said.

The study was triggered by former Democratic Sen. Sam Nunn and James R. Schlesinger, a former Republican secretary of defense and energy.

Alaska GOP Sen. Frank H. Murkowski, chairman of the Senate Energy Committee and one of the study's congressional sponsors, said he will use it to promote an energy-policy bill about to be issued by his committee that calls for energy exploration on the coastal plain of the Arctic National Wildlife Refuge. Copyright (c) 2001 Dow Jones and Company, Inc.

Dow Jones

-- Martin Thompson (, February 16, 2001


Gee, whiz wally that really bite the big one - to be dependent upon your enemies for sustenance. -- Can you say BOHICA?

Will the Big Oil let us develope alternative things like Bio-Diesel?

-- (, February 16, 2001.

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