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Before a packed National Press Club audience in Washington — including reporters and cameras from Al Jazeera — Burns addressed several issues that President Bush could not in his speech before the United Nations. While President Bush was rightly focusing on Iraq as the next step in the war against terror, Burns was outlining a vision for changing the dynamic of world energy markets. Most significant were Sen. Burns's comments about America's ally in the war on terrorism, Saudi Arabia. One informed source tells me that the Bush administration vetted Sen. Burns's speech and was pleased with the thrust of his arguments, and that his speech reflects the administration's views and ultimate aims.
Sen. Burns articulated what he sees as the most significant problem of U.S. foreign policy. "America remains confronted by a dependency on rogue oil." What does that mean, exactly? The United States purchases up to 25 percent of its oil from nations that foster Islamic radicalism.
Chief among these, Burns said, is Saudi Arabia. And Burns was unsparing in his criticism of the Saudis:
The problem, as Burns and others see it, is that American oil purchases are propping up the Saudi monarchy and that money is then handed over to radicals in Saudi Arabia and elsewhere to subsidize anti-Western and anti-American rhetoric and activities. As such the United States is "inadvertently financing global terrorism," he said. But Burns also knows that bashing the Saudis doesn't address the fact that the United States anchors a technological and industrial world that depends on abundant and reliable sources of energy to thrive. So what does he propose to do? First, technology will begin to help break U.S. dependence on Gulf oil. Lynne Kiesling, an energy expert at the Reason Public Policy Institute in Los Angeles and an economics professor at Northwestern agrees. "Technological change moves us toward both finding fossil fuels that we didn't think were there, and toward using fuels other than fossil and using fossil more efficiently. That changes the dynamic of our reliance on the Middle East, and keeps Iraqis and Saudis on their toes because of the threat of technological obsolescence of the only source of value they have." The other solution is found in supply — increasing the breadth and depth of available energy supply. This is important not just to the United States, but in particular to developing countries so desperate for new sources of energy. This means finding new and better resource areas and trading partners as well as strengthening ties with our current trading partners. The greatest potential resides in a few key areas outside the Gulf region: the Caspian, Russia, West Africa, South America — and the United States. "There is a moratorium on new offshore oil and gas development along the entire east coast of the United States," Sen. Burns said, "while America purchases Canadian gas pulled from wells off the coast of Nova Scotia. That makes no sense." The potential for increasing supplies is enormous, not just in the United States. "Russia is going to be huge, especially if they succeed in attracting foreign investment and do joint partnerships between Russian companies and others," Kiesling said. "This is also going to be an important strategy in Iraq. If Russian and US energy companies can agree to do joint development in Iraq, then we are going to be more likely to get Russia's buy-in to taking out Saddam Hussein." How likely is it that the US can substantially reduce its dependence on Persian Gulf oil? After all, the Middle East is still far and away the dominant region for oil production. Kiesling, for one, isn't that sure that Saudi Arabia's strategic influence can be significantly minimized. "Marginalizing Saudi Arabia can only go so far, because of the immutable fact that the Persian Gulf states are still the least-cost producers of oil. That means that if Russia, Norway, and others raise their production, in competitive markets we will still buy first from Persian Gulf states, because they can out-compete others on price — when they so choose — because of their lower production costs. "But where the Russians and Norways — and even ANWRs — of the world become important," she continued, "is when OPEC tries to move away from that competitive outcome. As OPEC raises its target price by restricting its output, it makes buying from other, higher-cost producers more economical." The ultimate goal, as Burns sees it, is to move beyond the point where "every time America buys a barrel of rogue oil we are in part funding unseen radicals." Ideally that will come at a time when "the Kingdom of Saudi Arabia [decides] to become democratic, to separate Church from State." Regime change in Iraq, as Bush advocated Thursday, could go a long way towards generating changes in the region that might one day bring about a free and democratic Saudi Arabia. Until that time, technological advances and increased supply hold the key to moving to the point where, as Burns put it, "we no longer need to kowtow to fanatics and anti-American regimes." — Nick Schulz is the editor of TechCentralStation.com. |
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hursday
was a day of important speeches at the U.N., from George Bush and Kofi
Annan. But another speech, one with potentially enormous ramifications,
was delivered Thursday as well, this one by Sen. Conrad Burns, Republican
of Montana, on the future of American foreign and energy policy in the
Middle East. 
