Saudi Arabia blasts American energy policy

by Jad Mouawad

The question of American "energy independence" clearly rankles officials in Saudi Arabia, the world's biggest exporter of crude oil, who seem increasingly puzzled by the energy policy of the United States, the world's biggest oil consumer. In a short and strongly-worded essay in Foreign Policy magazine, Prince Turki al-Faisal, a former ambassador to the United States and a nephew to King Abdullah, said that for American politicians, invoking energy independence "is now as essential as baby-kissing," and accuses them of "demagoguery."
All the talk about energy independence, Mr al-Faisal said, is "political posturing at its worst -- a concept that is unrealistic, misguided, and ultimately harmful to energy-producing and consuming countries alike."

There is no technology on the horizon that can completely replace oil as the fuel for the United States' massive manufacturing, transportation, and military needs; any future, no matter how wishful, will include a mix of renewable and non-renewable fuels. Considering this, efforts spent proselytizing about energy independence should instead focus on acknowledging energy interdependence. Like it or not, the fates of the United States and Saudi Arabia are connected and will remain so for decades to come.
Relations between the United States and Saudi Arabia date back to the 1930s when American geologists first struck oil in the kingdom. While American companies built the Saudi oil industry, Americans have never shaken off their suspicions and mistrust of the kingdom since the Arab oil embargo of 1973.

It's not the first time a Saudi official has criticized American energy policy, or its growing reliance on renewable fuels. Many of Prince Turki's arguments recycle Saudi Arabia's position that for the past 30 years, the oil-rich kingdom has acted in a responsible manner to keep oil markets well supplied.
Prince Turki correctly points at the steps taken by Saudi Arabia in recent years to increase its production to make up for lostproduction in Iraq or elsewhere in times of crisis, and invest close to $ 100 bn in new capacity over the past five years. On the other hand, he points out that four countries -- Iran, Iraq, Nigeria and Venezuela -- failed to live up to expectations that they would raise their production over the past decade for a variety of reasons, including "a US invasion" in the case of Iraq.

The Saudis have genuine reasons to fear the effects of the Obama administration's energy policy and its commitment to reducing oil consumption, as well as efforts to reduce carbon emissions. As Prince Turki points out himself, Saudi Arabia holds 25 % of the world's known oil reserves and would like to keep selling oil for several more decades.
As such, the Saudis know that any attempt to reduce gasoline consumption is a threat to the future of the Saudi economy. It's an old refrain: in his most famous remark, the former Saudi oil minister, Sheik Yamani, once said that the stone age didn't end because the world ran out of stones, and the oil age will not end because the world runs out of oil. It will end when something replaces it.

The trend has already started. Oil demand in the United States has peaked -- instead of rising as it has since the dawn of the age of oil more than a century ago, the nation's oil consumption has begun its long decline.
The question is: how fast will the transition take?