OPEC and US Energy

Article excerpt

On the 30th anniversary of the Arab oil embargo, the Secretary-General of Organization of Petroleum Exporting Countries (OPEC), Alvaro Silva Calderon, writes ("Changing the Mix: Renewable Energy and the Continuing Need for Fossil Fuels," Fall 2003) that OPEC now "cares passionately about world energy as a whole and not just about petroleum." Is this the germ of a major new OPEC initiative to reduce and move the world from the use of fossil fuels? In a word: No.

For the United States, this anniversary coincides with concerns about US energy-environmental stewardship and energy security and should be marked with progress in the management of its energy future. Has the country learned how to neutralize OPEC threats to critical resources and is it equipped to protect its energy future? In a word: No.

The United States has no national energy policy to enable us to manage our energy future to meet the pressing and sometimes conflicting goals of affordability, environmental protection, economic development, and security. Renewable energy fundamentals are currently strong, but these projects cannot make their way from conception to financial closing to development. The US electric sector is in the midst of a radical revamping of the matrix of state and federal policies on new energy technologies after relying too much on markets that have not worked and simultaneously destroyed the regulatory framework that supported technology development. Critical decisions about the US energy economy are left by default to the priorities of OPEC.

Calderon's sketch of the future can be broken down into three components: platitudes, old threats, and new threats. The platitudes reveal OPEC's true view of renewable energy, that it is nice but not practical. The old threats repeat OPEC's commitment to manage a Malthusian future of exponentially growing demand for oil being supplied from an ever-declining base of reserves, with the exception of OPEC's reserves that will allow OPEC to be the "key supplier of the incremental barrel." The new threat is Calderon's quiet announcement of OPEC's intention to do to natural gas what it is now doing with oil. …