- The Washington Times - Saturday, January 14, 2006

A decade after he vetoed legislation that would have opened up a small part of Alaska’s oil-and-gas-rich Arctic National Wildlife Refuge (ANWR) to exploration, Bill Clinton deserves his share of the blame for the fact that U.S. dependency on foreign oil has increased in recent years significantly more than it otherwise would have.

On the margin, the million barrels per day of ANWR oil that would now be flowing to the lower 48 represents a wasted opportunity. The cost of that decision can be measured by the fact that current oil prices are hovering at $63 per barrel, increasing the nation’s import bill at an annual rate of $23 billion. Meanwhile, U.S. oil production since Hurricane Katrina has averaged only 4.4 million barrels per day, which, in the absence of ANWR output, is one-third (or 2.2 million barrels) below the 1995 level of daily output.

A decade’s worth of hindsight, which has been augmented by the recent Gulf Coast hurricanes, has nonetheless failed to improve the judgment of most congressional Democrats and a group of Republican moderates. Those two factions derailed last month the ANWR oil-and-gas-exploration provision, first in the budget-reconciliation bill and then in a defense-appropriations measure.

Amazingly, a week before the lawmakers’ actions, the U.S. price of natural gas hit a record $15.78 per million British thermal units (Btu). Even that real-time development had no effect. In June 2003, just two and a half years earlier, Federal Reserve Chairman Alan Greenspan alarmingly testified before the House Energy and Commerce Committee. “Yesterday, the price of gas for delivery in July closed at $6.31 per million Btu,” Mr. Greenspan warily reported, adding: “That contract sold for as low as $2.55 in July 2000.” So, not even a gas-price increase of more than 500 percent over five years could change their minds.

If oil-and-gas supply shortages and soaring prices failed to get the attention of congressional Democrats and Republican moderates, chances are slim that they understood the significance of the heavy-handed energy power play perpetrated on New Year’s Day by Russian President Vladimir Putin. The former KGB colonel instructed Gazprom, Russia’s state-controlled natural-gas monopoly, to shut off gas shipments to Ukraine over a contract and pricing dispute. Europe, including Germany, France and Italy, receives about 25 percent of its natural gas Russia, a level that is expected to rise considerably over the next 15 years. The North Sea currently supplies 60 percent of Europe’s gas needs. But as North Sea reserves are depleted over the next 15 years, the European Union projects that its members will be importing 75 percent of its gas by 2020. A significant majority of that imported gas will come from Russia, whose recent actions confirmed its intention to become the Saudi Arabia of a rogue-dominated natural-gas cartel.

Meanwhile, U.S. dependency on foreign, non-Canadian sources of natural gas will surely soar as well, all the more so given that ANWR remains off the table. It is commonly known that two-thirds of the world’s proven oil reserves are located in the volatile Middle East. But has anyone taken a look at who controls nearly two-thirds of the world’s proven reserves of natural gas? With nearly 2,500 trillion cubic feet (tcf), Russia alone — according to the journal World Oil — controls more than one-third of the world’s natural-gas supplies. (By contrast, Saudi Arabia’s proven oil reserves comprise 25 percent of the world’s total.) With nearly 1,000 tcf, Iran — have you been reading about the nuclear-proliferation problems Iran has been causing lately? — controls about 14 percent.

Tiny Qatar, meanwhile, controls another 900 tcf, or 13 percent of the world’s proven gas reserves. Qatar, about the size of Connecticut with less than a million inhabitants (less than a third of whom are native Qataris), is the home of the Arab satellite television channel, Al Jazeera. It is a monarchy ruled by Wahhabi fundamentalists, and it is subject to periodic intra-family coups — hardly a formula for long-term stability.

ANWR will not solve America’s energy problems. But preventing oil and gas production there will surely make them worse. And that is unconscionable.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide