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Home / Washington Business - May/June 2006 / President's Message: It's Time to Get Serious About Our Energy Independence |
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President's Message: It's Time to Get Serious About Our Energy Independence |
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Written On: May/June 2006 |
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Written By: by Don C. Brunell - AWB President |
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In last month's Washington Business we focused on energy. We pointed out that America is at a crossroads and urgent action is needed. Low-cost, reliable energy drives our economy and way of life, but as emerging countries such as China and India ramp up their economies, energy is a key ingredient to their success as well.
There are creative solutions to achieve energy independence contained in a new federal energy strategy passed by Congress last year. But political rancor and indecisiveness have created a logjam, and many of these recommendations are being debated rather than implemented. Meanwhile, the Chinese are not waiting around for us to get our act together. They are forging ahead to form strategic partnerships around the world and build new energy facilities.
With gasoline prices topping $3 a gallon, this should be the wake-up call America needs. If that isn't a bucket of ice water dumped over our heads, how about $3.50 or $4 and waiting lines at filling stations?
Chinese President Hu Jintao's visit to Seattle and the White House last month only reaffirmed our need to elevate the importance weaning ourselves from foreign oil suppliers. President Bush was right when he called China's growing demand for oil one reason for rising prices. With the price of crude consistently above $70 a barrel and heading for $80, the law of supply and demand is to blame.
Today, America imports 60 percent of our crude oil. Some of our traditional suppliers — like Venezuela — have governments which are hostile to the United States and many sources in Africa are threatened by civil war. Our foreign sources are becoming constricted while emerging nations fill the gap.
President Bush rightly worries that Beijing is trying to lock up global supplies. Don't blame the Chinese; they are responding to the market forces driving their economy.
In 2004, China used 6.5 million barrels of oil a day and overtook Japan as the world's second largest user of petroleum products. The largest, the United States, consumes about 20 million barrels a day.
Growth in the Chinese automobile market is causing a surge in oil imports. The Department of Energy estimates China's demands will more than double to 14.2 million barrels a day by 2025. More than two-thirds of that will be imported from countries we currently buy oil from or who are potentially hostile.
For example, China is investing billions in Iran. Sinopec, the state-owned oil company, signed a $70 billion deal in 2004 to develop the Yadavaran oil field, which is projected to produce 300,000 barrels a day.
With China's economy growing at a 10 percent annual clip and oil deals to be had, is it any wonder that the final stop on President Hu's visit was Saudi Arabia?
Washington's economy is built on low-cost, reliable energy. Without it, traditional industries evaporate. Look no further than our state’s aluminum sector, a mere shadow of what it was before the 2000 drought, electricity shortage and rate spikes.
That alone should be a lesson for what could happen if we're not serious about conserving energy; developing cleaner and safer supplies from traditional sources such as coal, nuclear and natural gas; bringing on alternative sources from biomass, wind and solar; and finding new oil reserves inside the United States.
We have the technology, ingenuity and supplies to work our way toward energy self-sufficiency, but the question is do we have the will, sense of urgency, and drive to get there? We can, if we get realistic about our vulnerabilities, set aside our biases, and end this ceaseless political bickering.
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