West Is Warned on Energy Security Risks

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West Is Warned on Energy Security Risks

Reuters Reuters Thursday, May 17, 2001

PARIS An international energy council on Wednesday warned industrialized nations to go on heightened alert over energy security risks, citing high oil import costs and the Californian electricity crisis.

The International Energy Agency meeting in Paris echoed the concerns addressed in a new U.S. energy plan that focuses Washington's efforts on diversifying and securing extra energy supplies to meet growing demand.

"Compared to two years ago, there is now a very much more renewed, intense concern with energy security," the agency's executive director, Robert Priddle, said after a two-day meeting. The agency is linked to the Organization for Economic Cooperation and Development.

Mr. Priddle said it would be "entirely reasonable" for OPEC at its June 5-6 meeting to undo some of the combined 2.5 million barrels per day of production cuts so far this year as the cartel seeks to meet the expected pick-up in third-quarter world crude demand.

Crude prices have rocketed from below $10 a barrel two years ago, and the Organization of Petroleum Exporting Countries slashed output twice this year to support prices at $25 a barrel, putting consumer countries on edge about summer fuel supplies and stockbuilding ahead of the winter months.

The fiasco of California's partial power-sector liberalization, which has resulted in rolling blackouts and the threat of a complete meltdown of the state's power grid, has also heightened anxiety.

Mr. Priddle said, "There is a concern about capacity of oil production, about capacity of other parts of the energy infrastructure because there are clear limitations in some parts of the world, notably the United States, which are having their affect on energy prices."

Secretary of Energy Spencer Abraham briefed the agency conference Tuesday about the new U.S. energy policy, which aims to ensure the United States is ready to meet an expected 30 percent rise in energy demand over the next two decades.

The plan, due for release Thursday, is likely to lay out a proposal to drill for new oil in Alaska and will seek to run nuclear plants for their full life spans. The administration of President George W. Bush has adopted a low-key approach to dealing with OPEC.

http://www.iht.com/cgi-bin/generic.cgi?template=articleprint.tmplh&ArticleId=20186

-- Martin Thompson (mthom1927@aol.com), May 18, 2001


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