BY EVA CHENG
"America in the year 2001 faces the most serious energy shortages since the oil embargoes of the 1970s", proclaimed US vice president Dick Cheney's May 2001 national energy policy report to President George Bush.
The Cheney report was tasked with ascertaining just how serious was the United States' energy crisis, and to locate its causes and solutions.
Following in the wake of the severe blackouts and power price hikes in California and neighbouring states in 2000, during Bill Clinton's presidency, Bush saw the Cheney report as ideal cover to justify policies and measures that would otherwise have been much harder to win support for.
A central conclusion of the Cheney report is that US energy supply infrastructure are facing a major crisis. It put the blame on years of neglect (presumably only under Clinton) and claimed that this has placed US "energy security" in jeopardy.
The proposed "solutions" and recommendations were so broad and vague that they can be used to justify a vast range of pro-business and anti-environment measures that the Bush administration may opt for. The report also provides more pretexts for Bush's aggressive militarism around the world.
The report warned that the US should not "look at energy security in isolation from the rest of the world... US energy and economic security are directly linked not only to our domestic and international energy supplies, but to those of our trading partners as well. A significant disruption in world oil supplies could adversely affect our economy and our ability to promote our key foreign and economic policy objectives."
9/11
But the Enron scandal was already escalating when the report was released. Enron boss Ken Lay's close association with it seriously tainted the report's credibility. That remained the case until the 9/11 terrorist attacks.
Bush's war on Afghanistan provided the US with a strategic military presence in Central Asia, something it wasn't able to achieve during the era of the Soviet Union. Access to and control of the lucrative oil and natural gas reserves of the Caspian Sea basin were made easier.
However, these new US bases also provide Washington with a greater ability to dominate the entire Persian Gulf and neighbouring regions and consolidate its military and political hold over the strategic oil-rich region, which supplies its key capitalist rivals in Europe and Japan.
The US knows that its domination of the Middle East, and the world's energy resources, is not guaranteed. The region is the heartland of the Arab world, where sympathy for the dispossessed Palestinians is widespread and hostility towards the US-Israel alliance is intense. It is also home to "rogue" states such as Iraq, Iran and Libya. The regimes that rule those countries are too independent and unreliable for Washington's liking.
Of course, these regimes are more than just a source of "bad influence". Their plentiful oil reserves also make them attractive targets in their own right. Washington's general imperial goals and the control of particular energy resources are both powerful motivations for the Bush gang's planned war on Iraq.
The US will inevitably make use of its military and political gains to address its own energy needs. As the Cheney report outlined, easier access to, and more diversified sources of, vital energy sources is a priority for US imperialism.
US energy crisis
With only 4.6% of the world's population, the US in 1999 was responsible for 25.3% of the world's total energy consumption, according to the US Energy Information Administration's International Energy Outlook 2002.
Driven by this huge appetite, the US has to keep importing more energy despite the fact that it already is the world's second largest producer of natural gas, the third largest producer of oil and has rich deposits of coal. It relies on imports to meet 16% of its net requirement of gas and 52% of its net requirement of oil.
Yet it still wants more. The Cheney report estimates that over the next 20 years, US oil consumption will increase by 33%, natural gas consumption by well over 50% and its demand for electricity will rise by 45%, contributing to an overall US energy shortfall of " nearly 50%".
Washington is looking overseas to plug the gap, a strategy that it has adopted since the 1950s. Its energy imports have risen sharply since 1985 and now look set to escalate even further.
US dependence on oil imports stands out. The US already relies on oil (19.5 million barrels per day) for 41% of its energy consumption. Because the US is more self-sufficient in other fuels, oil's share of all fuel imports accounts for 89%. The US used to import just over 4 million barrels of oil per day (bpd) in 1985, but this had more than doubled to 10 million bpd by 2000.
US oil imports are expected to increase even more sharply as its own production gradually declines. Oil production in the "lower 48 states" peaked in 1970; production in Alaska peaked in 1988. Total US oil production was 5.8 million bpd in 2000, or 39% below peak levels. In addition, most of the country's more accessible reserves have already been harvested, making the exploitation of the remainder much more costly.
Irrational energy use
Rather than critically reviewing the sustainability of the United States' energy "needs" and seriously looking for ways to reduce them, the Cheney report proudly proclaimed: "America must have in place between 1300 and 1900 new electric plants" (an average of 60-90 plants a year!) over the next two decades. It affirmed that "our prosperity and way of life are sustained by energy use" and that an energy-powered "rising standard of living" remains a cherished US goal.
While paying lip service to developing clean and renewable energy sources, which are projected to continue playing a minor role in the US energy mix, the Cheney report made it clear the US would continue to rely heavily on oil, coal and gas for the bulk of its energy needs.
How sensibly were the fuels deployed? The case of oil, the US's number one energy source, is instructive. Two-thirds of it has gone to transportation (rising from 52% in 1970), 25% for industrial purposes and the remaining 8% meets commercial or residential needs.
While US oil production is expected to decline further to 5.1 million bpd by 2020, its oil consumption is projected to rise to 25.8 million bpd, primarily due to transportation demands.
Yet this rising gap has made hardly any impact on the US auto industry, which keeps churning out more petrol-hungry light trucks (pickups, sports utility vehicles and minivans) than ever before because they sell well. Washington has done nothing to discourage this energy-swindling corporate behaviour. Nor has it done much to encourage energy-efficient and environmentally friendly public transport as a counter measure.
Another factor in the US energy crisis is the country's energy infrastructure, which has crumbled sharply since Washington "deregulated" the "energy market" in the mid-1990s. The US government has increasingly washed its hands of this essential service in the name of allowing "market forces" to bring down prices.
Instead, prices have surged sky-high. What has been reduced is the standard of services. The US electricity industry, which was once vertically integrated, has now been split into three isolated segments — generation, transmission and distribution. Profit maximisation, rather than providing a needed public service, has become the prime concern of these "independent" energy firms.
Electricity utilities, once responsible for ensuring adequate generation, now buy power from "independent power producers". Despite the big numbers of these "merchant" power plants, certain regions continue to suffer severe power shortages because companies won't invest in areas they consider not profitable enough.
On the other hand, if taking advantage of (or even creating) power shortages help "the bottom line", companies have not hesitated to do so. That was a key source of Enron's profits and a key reason behind the "power shortages" in California.
Even the Cheney report admits that investment in US energy supply infrastructure has been lacking, but it conveniently ignores the corporations' profit-driven behaviour as the being the decisive contributing factor and falsely blames "the cyclical nature of the oil markets".
Rather than easing the country's seriously inflated and unsustainable appetite for imported energy, deregulation has made things worse.
This will fuel more US political and military intervention overseas in the coming years, especially in Washington's key oil suppliers. Its "deep concern" at the political developments in Venezuela is not hard to understand, given that the Latin American country provides the US with 14% of its oil imports.
The oil "giant" Saudi Arabia supplies 15% of US oil imports, only marginally more than Venezuela and Canada. Mexico, the fourth biggest supplier to the US, provides 12%. The other major oil suppliers to the US are, in order of importance: Nigeria, Iraq, Colombia, Norway, the UK and Angola.
From Green Left Weekly, November 27, 2002.
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