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U.S. Energy Plan Casts Long Shadow Around The Globe

by Abid Aslam

reaction to Bush energy plan
(IPS) WASHINGTON -- President George W. Bush invoked domestic concerns in presenting his administration's energy strategy May 17, but the plan has implications that will be felt far and wide.

Like an oil drilling platform, the document appears deceptively limited in scope. Beneath the surface, however, its recommendations extend in many directions through territory spanning energy, trade, and foreign policy.

At home, the plan calls for increased energy production and infrastructure as well as incentives for conservation and energy efficiency as means to avert what Bush described as "a darker future" presaged by California's rolling blackouts.

Overseas, it says the United States needs to "strengthen our trade alliances, to deepen our dialogue with major oil producers, and to work for greater oil production in the Western Hemisphere, Africa, the Caspian, and other regions with abundant oil resources."

It envisions "deep water offshore exploration and production in the Atlantic Basin, stretching from offshore Canada to the Caribbean, Brazil and West Africa."

Partisan and independent analysts alike say plan, drawn up by a task force led by Vice President Dick Cheney, faces intense fighting in Congress. How many of its 105 recommendations will become official policy remains the subject of speculation.

Nevertheless, the 163-page tome -- entitled "Reliable, Affordable and Environmentally Sound Energy for America's Future" -- takes an expansive approach in which energy is treated as a domestic imperative and as a means to project U.S. influence in the world.

"A significant disruption in world oil supplies could adversely affect our economy and our ability to promote key foreign and economic policy objectives, regardless of the level of U.S. dependence on oil imports," it says.

One of those objectives is opening markets to U.S. investors. Accordingly, the plan calls for the United States to: "Support initiatives by Saudi Arabia, Kuwait, Algeria, Qatar, the UAE (United Arab Emirates), and other suppliers to open up areas of their energy sectors to foreign investment" and to work toward "a sectoral trade initiative to expand investment and trade in energy-related goods and services."

Further press "WTO (World Trade Organization) members to open markets eligible for private participation in the entire range of energy services, from exploration to the final customer (and) attempt to ensure nondiscriminatory access to foreign providers of energy services."

Stiffen its insistence that members of the WTO, an eventual Free Trade Area of the Americas, and the Asia-Pacific Economic Cooperation forum ensure a "pro-competitive regulatory environment for energy services."

The top 10 suppliers of U.S. oil imports last year were Canada, Saudi Arabia, Venezuela, Mexico, Nigeria, Iraq, Colombia, Norway, Britain, and Angola. The plan recommends further integration of the U.S., Canadian, and Mexican energy markets under the North American Free Trade Agreement.

U.S. focus on the Caspian region
The report recommends that the administration "conclude negotiations with Venezuela on a Bilateral Investment Treaty, and propose formal energy consultations with Brazil, to improve the energy investment climate for the growing level of energy investment flows between the United States and each of these countries" as they expand operations.

It urges Bush to "reinvigorate the U.S.-Africa Trade and Economic Cooperation Forum and the U.S.-African Energy Ministerial process." Four areas high on U.S. oil companies' list of priorities are highlighted in the report: Nigeria's "climate for U.S. oil and gas trade, investment and operations;" the West African Power Pool and associated gas pipeline; the Chad-Cameroon oil and gas pipeline; and Angola's growing offshore oil industry.

Asia holds less than five percent of world proven oil reserves, accounts for more than 10 percent of production, and consumes about 30 percent of global supplies. Pacific Rim countries are expected to increase petroleum imports by almost 43 percent by 2020. The report highlights the need to build regional stocks and "help India maximize its domestic oil and gas production."

Russia has about five percent of the world's proven oil reserves and one-third of global gas reserves. Last year, it was the world's third largest producer and second largest exporter of oil and natural gas. But its infrastructure is poor and thus represents opportunities for investment and leverage by U.S. interests, according to the Cheney task force.

The Caspian region's proven oil reserves -- principally in Azerbaijan and Kazakhstan -- are about 20 billion barrels, a little more than the North Sea and slightly less than the United States. Exploration is continuing and proven reserves are likely to increase significantly, the report says.

It recommends that the U.S. administration back the Baku-Tblisi-Ceyhan (BTC) oil pipeline as it demonstrates commercial viability; "establish the commercial conditions that will allow oil companies operating in Kazakhstan the option of exporting their oil via the BTC pipeline;" support private investors to "develop the Shah Deniz gas pipeline as a way to help Turkey and Georgia diversify their natural gas supplies and help Azerbaijan export its gas;" and encourage Greece and Turkey to link their gas pipeline systems, thus allowing through-flow from the Caspian region to Europe.

Turning to U.S. and UN sanctions regimes, the document argues that although this kind of punishment "can be an important foreign policy tool (sanctions) should be periodically reviewed to ensure their continued effectiveness and to minimize their costs on U.S. citizens and interests."

This could provide an opening to engage Iran, which announced last year that a Chinese-Swiss consortium had obtained funding from French banks for an oil pipeline from the Caspian Sea port of Neka to a suburb of Tehran, the capitol. The project would involve not only oil extraction and transport but also refining, and thus help to refurbish Iran's economic core, according to private analysts at Stratfor, Inc.

The announcement was seen here as undermining U.S. sanctions and challenging Washington's influence in the Caspian region, where Russia, Iran, China, and France have emerged as key players.

The task force also recommends increasing U.S. exports of clean energy technologies, a lucrative market in which domestic firms are aided by the U.S. commerce department and agency for international development, USAID.

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Albion Monitor May 21, 2001 (

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