Bush Energy Plan: Diversification Of World Oil Supplies Urged

ByBridgeNews Faced with dwindling domestic crude oil production over the next 20 years and rising demand, the Bush administration's energy plan urges greater international cooperation with foreign producers and the development of new areas of supply. However, the policy also acknowledges that the need to diversify supplies also stems from an anticipated sharp increase in demand for oil imports from the developing world. Despite the emphasis placed on developing domestic energy supplies and improving conservation efforts, the Bush plan acknowledges that the U.S. will continue to depend on crude oil imports for a significant portion of its energy needs. Additionally, it recognizes that world oil supplies will increasingly be sourced from OPEC nations, especially those in the Persian Gulf area, whose share of the global market is expected to increase to between 54% and 67% by 2020. Nevertheless, the report calls on the U.S. government to ensure that global oil supply remains diversified. "Periodic efforts by OPEC to maintain oil prices above levels dictated by market forces have increased price volatility and have worked against the shared interests of both producers and consumers in greater oil market stability. . . . Greater diversity of world oil production remains important," the report says. Specifically, the Bush plan calls for greater offshore production in the Atlantic Basin, West Africa, and the Caspian Sea, areas which are, for the most part, outside of OPEC's control. Oil supply diversity is to be ensured through the signing of bilateral investment treaties and technical assistance pacts with leading and reliable sources of imported oil, such as Mexico. "Growing levels of conventional and heavy oil production and exports from the Western Hemisphere, the Caspian, and Africa are important factors that can lessen the impact of a supply disruption on the U.S. and world economies. Overall U.S. policies in each of these high-priority regions will focus on improving the investment climate and facilitating the flow of needed investment and technology." U.S. oil majors and foreign firms are currently working to develop the massive reserves in Kazakhstan and Azerbaijan, which are estimated at 20 billion barrels of crude oil, although further discoveries are anticipated in the region. As part of an ongoing effort to keep the Caspian region's oil export potential out of the hands of Iran, Russia, and other states, U.S. diplomats have been actively pushing for the construction of export pipeline routes through allied Caucasian nations to Turkey. The new policy urges continued and vigorous support for the Baku-Tbilisi-Ceyhan pipeline, which passes from Azerbaijan through friendly Georgia to a Turkish port on the Mediterranean Sea, bypassing Iran, Russia, and other volatile Caucasus-area states.