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Royal Dutch Shell Plc .com: …energy independence is “naive”: Shell President John Hofmeister

At US-Arab economic forum, energy execs say energy independence is “naive”

By: STEVE QUINN
Associated Press
Published: Jun 27, 2006

Becoming energy independent is “naive” and would harm U.S. relations with Arab countries, energy executives told world and business leaders at a forum designed to improve those nations’ ties.

Executives from Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Marathon Oil Co. and Shell Oil Co. took the stage at the U.S. Arab Economic Forum on Tuesday, the forum’s second day, and spoke out against the idea advanced by lawmakers that the United States is being crippled by its dependence on foreign oil.

“Energy isolation is naive; energy dependence is uncomfortable; energy interdependence makes sense,” said Shell President John Hofmeister. “We are trying to bring the message to help people understand that we are the world of users and world of producers.”

The executives called for an energy policy that diversifies the supply to include renewable energy but without biting the hand that helps supply the United States.

The Bush administration, faced with growing public frustration over rising gasoline prices, has pushed for greater dependence on domestic production, including opening to exploration a pristine wildlife refuge in Alaska believed to hold between five to 10 billion barrels of crude oil. In his State of the Union Address, President George W. Bush also pledged to increase development of alternative fuels with a goal of reducing U.S. oil imports from the Middle East by 75 percent.

At the same time, some U.S. officials have taken aim at multinational oil giants and OPEC producers, accusing them of squeezing the market to prop up the price of crude oil _ allegations that the companies and producing nations have denied. The current strength in price, they argue, is based on strong demand and limited ability to boost supply given the dearth of spare production capacity even by the some of world’s largest oil suppliers such as Saudi Arabia.

Bill Berry, ConocoPhillips executive vice president for exploration and production in Europe, Asia and the Middle East, said there is a “glaring disconnect” between policy and reality, one that could have long-term fallouts.

Lawmakers’ discussions about reducing imports from the Middle East will only force the producing nations to sell oil elsewhere and hurt foreign relations, Berry said.

The U.S. imports about 12.2 million barrels of oil a day, roughly 58 percent of the country’s demand, according to the Energy Information Administration. Of that, about 1.5 million barrels come from Saudi Arabia.

“When they speak, you should listen to them (the executives),” Prince Turki Al-Faisal, Saudi Arabia’s ambassador to the U.S., said after the forum.

He also criticized using “addiction” to describe oil needs.

“It’s misleading,” Al-Faisal said. “Oil is like oxygen and water. It’s a necessity of life. It is misinformed to think that any country can do without oil.”

Berry said cutbacks on oil imports to the U.S. could have Arab nations sending their product to India or China, whose growing and competing economies are calling for more supplies.

In April, Chinese President Hu Jintao visited Saudi Arabia in a trip some analysts said highlighted that the kingdom may be indicating that it has options other than the Untied States, where suspicion of Arabs and expanding Arab business interests in the country has run high following the Sept. 11, 2001 attacks. Fifteen of the 19 hijackers were Saudis.

“Repeated pronouncements by U.S. policymakers about backing off Middle East imports may deter Arab countries from expanding capacity at the very time the world needs them to do so,” Berry said. “We need to discard the illusion that energy security will come through so-called energy-independent America. Self-sufficient is neither attainable nor desirable.”

Copyright 2006 Associated Press

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