Global Policy Forum

By Emad Mekay

With threats of a Venezuelan oil blockade helping to push petroleum prices higher, neo-conservative politicians and analysts continue to insist the biggest threat to U.S. energy supplies is Washington's reliance on Middle East oil.

President Hugo Chavez on Sunday vowed to halt oil exports to the United States and launch a "100-year war" if Washington ever tried to invade Venezuela. The United States has repetitively denied trying to topple Chavez, but the embattled president, facing another round of demands for a referendum on his possible recall -- including violent street protests that saw 10 people killed -- says Washington was behind a failed 2002 coup and continues to back opposition groups seeking the vote. Venezuela is the third largest producer in the Organisation of Petroleum Exporting Countries (OPEC).

But at a conference here Friday organised by the Brookings Institution and the ultra-conservative American Enterprise Institute (AEI), analysts almost completely ignored troubles in Venezuela, with many insisting that the greatest "threat" to U.S. oil security comes from the Middle East. Saudi Arabia, Kuwait, Oman, Qatar, the United Arab Emirates, Bahrain, Iran and Iraq together account for 64 percent of the world's proven oil reserves. Saudi Arabia alone controls 27 percent of the world's oil supplies.

Middle Eastern countries supplied about 20 percent of U.S. oil needs in 2002, according to the U.S. Department of Energy. Canada was the largest exporter of oil to the United States, followed by Saudi Arabia, Mexico and Venezuela. The conservative analysts argued that "ethnic and religious conflicts" and the U.S. ''war on terrorism'' in the region have made trading relationships with countries there more fragile than ever.

Yet the only three military operations in the region today involve Israel, a nation strongly backed by neo-conservatives, and the United States which is involved in Iraq and Afghanistan and carries out joint military and intelligence operations with the region's dictatorships to root out local opposition.

Conservative oil analysts also argue that oil is likely to be used as a weapon if radical groups take power. And that if more oil money starts flowing into Arab countries, those economies -- under different rulers -- could pose a military threat to Israel. Israelis, on the other hand, are concerned that Arab leaders could use oil as a weapon to leverage their influence across the world, especially in Washington.

Former CIA Director James Woolsey, a staunch neo-conservative who is pushing for military intervention in the Middle East, warned the conference of the "potential use of oil as a weapon to affect our security and our behaviour". "As India and China come online with their increased demands, the growth of the middle class and more vehicles, we are likely to see very substantial increases in demand for oil, and much of the supply will come from areas of the world that are volatile, where terrorist interference or a coup are all possible," Woolsey said.

A hawk who ardently supported the U.S. invasion of Iraq one year ago, Woolsey says the problem will be solved not only by weaning the United States from Middle Eastern oil but by also convincing other nations to look for energy elsewhere.

A similar call came earlier this month when C. Fred Bergsten, who heads the Institute of International Economics (IIE), wrote in the influential periodical 'Foreign Affairs' that dependence on foreign oil "keeps U.S. foreign policy beholden to a few key producers".

Bergsten suggested Washington start a new campaign to cut world oil prices and to lessen reliance on Mideast supplies.

To avoid charges the initiative would be "part of a broader anti-Islamic crusade", he recommended the United States enlist other countries in the efforts, including China and oil-importing Islamic countries like Pakistan and Turkey, currently two staunch U.S. allies. To give the effort the air of multilateralism, the effort should also be led by the International Energy Agency (IEA) an arm of the Organisation for Economic Cooperation and Development (OECD), a group of 29 industrial nations, said Bergsten. The conservative energy specialists also argue Washington needs to take some risks, including boosting its use of nuclear power.

While admitting that that "the wrong exposure there (nuclear energy) can kill you fairly quickly", Brookings Fellow James A. Placke said an argument can be made that fossil fuel emissions, in the long run, are just as lethal as a nuclear disaster. But cleaner energy is hardly an option for conservatives bent on cutting off Middle Eastern oil.

John Felmy, a senior economist at the American Petroleum Institute, said that renewable energy sources like wind, solar and geothermal, while "noble and worthwhile" are over-hyped. "Even if you increased the output of renewable energy sources by 1,000 percent, you only get five percent (of total energy output)," he said. "They will continue to play a small role until we develop the technology to reduce the cost," Felmy added. He also warned about opposition to developing oil resources at home on environmental and social grounds -- as many civil society groups do -- calling such hostility a "serious threat".

Despite the conservatives' focus on the Middle East, the United States has already scored some success in steering away from the region's oil, some experts say. U.S. oil consumption per dollar of gross domestic product (GDP) has declined and there is greater enthusiasm for new and alternative technologies and different exporting countries, says Daniel Yergin, chairman of Cambridge Energy Research Associates.

West Africa, Latin America and Russia are known to possess abundant yet unexploited oil reserves. Russia, alone, is likely to produce nine million barrels a day in 2004, more than the output of better-known producers like Iran, Venezuela and China. In the past decade, 60 nations, some with the direct help of Washington, have increased their oil production and are now supplying the United States.