http://news.ft.com/cms/s/a0470f9a-b2c6-11da-ab3e-0000779e2340.html
The
US must expand international co-ordination of energy issues, especially with
China and India, to address concerns about growing global competition for energy
resources, the chairman of the Senate foreign relations committee said on
Monday.
In a speech in Washington, Dick Lugar, the influential Republican senator,
warned: “No one who is honestly assessing the decline of American leverage
around the world due to energy dependence can fail to see that energy is the
albatross of US national security.”
His remarks highlight the extent to which energy security has moved rapidly
up the US political agenda, driven by an unusual coalition of interests. These
include national security specialists concerned about US reliance on foreign oil
in troubled parts of the world, environmentalists and unions keen to create jobs
in the US by developing alternative energy sources.
Political interest in the issue was underlined by President George W. Bush's
unexpected comments in his State of the Union speech in January, when the former
oil executive warned that the US “was addicted to oil”.
Mr Lugar on Monday called that phrase a “seminal moment in American history,
when a US president said something contrary to expectations,” and compared it
with “President Nixon using his anti-communist credentials to open up China”.
As debate about Iran’s nuclear ambitions shifts to the United Nations
Security Council, Mr Lugar highlighted the dangers of transferring billions of
dollars to unaccountable regimes and warned that economic sanctions against Iran
might not work.
“Iran has been anticipating a crisis by accumulating funds [from high oil
prices], so if they shut off oil supplies it could have savings to draw down for
a long period of time. That is not well recognised and allows Iran and other
states a degree of invulnerability to economic sanctions,” he said.
Mr Lugar noted that 77 per cent of the world's oil supply was controlled by
foreign governments, and that the US paid 17 per cent more for its energy in
2005 than the year before. Energy costs now account for a third of the US trade
deficit. He predicted that the US would spend $320bn on oil imports this year.
To reduce US vulnerability he said he would introduce an Energy Diplomacy and
Security Act this week to expand international co-operation to “enhance
preparedness for major disruptions in oil supplies”.
He said a priority was formal co-ordination with China and India as they
developed strategic petroleum reserves. He also called for new regional
partnerships in the west.
More controversially, he suggested that there be a $35 a barrel price floor
for oil, to provide security for companies seeking to invest in alternative
fuels. He admitted that he was still speaking to economists about how this could
be achieved.
