Monday August 24, 7:46 pm Eastern Time
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U.S. should import less oil - new energy secretary
By Tom Doggett
WASHINGTON, Aug 24 (Reuters) - The United States must reduce its dependence on foreign oil in response to growing international terrorism, new U.S. Energy Secretary Bill Richardson warned on Monday, his first day on the job.
The United States imports about half the oil it consumes, and foreign oil shipments are expected to increase as American crude production drops.
Richardson said he wanted to reverse that trend, especially in light of the United States' stronger commitment to fighting international terrorism, a process in which oil shipments were at risk of being interrupted.
''I would like more emphasis in ... the development of resources here,'' Richardson said. ''I want to see us find ways to make it easier for domestic oil production to grow,'' he told reporters.
''On the terrorism issue, we're in this for the long haul. This is going to be a protracted struggle,'' Richardson predicted. He said the administration believed ''we struck very strongly'' in Afghanistan and there was now a ''heightened risk'' for Americans.
Many domestic oil producers are plugging their crude wells as low prices make it uneconomic to pump oil. As a result, foreign oil is flooding the U.S. market.
Preliminary data from the Energy Department shows that the United States imported 261.8 million barrels of crude during June, with 62.9 million barrels coming from the Gulf region. A barrel holds 42 gallons.
Iraq, which is refusing to allow U.N. arms inspectors full access to suspected weapons sites, was the ninth largest supplier of crude to the United States in June, according to the department.
Richardson said he expected Latin American countries such as Mexico and Venezuela to provide more oil to the United States. But that does not necessarily mean the United States will be less dependent on oil from the Middle East, he added.
''Our numbers with the Gulf states, our energy relationships, are good. But our objective is to reduce our dependence, and we're going to try to do that,'' Richardson said.
Because of low oil prices, Richardson said this might be a good time to buy crude for the Strategic Petroleum Reserve, set up 25 years ago as an emergency stockpile of oil.
The reserve has dwindled steadily from a 1994 peak of 592 million barrels. It currently stands at 563 million barrels, leaving about 117 million barrels of spare storage space.
''I think that it's important that at a time when there are declining oil prices, that we consider stocking up on the reserve. I think it's good energy policy (to) save for a rainy day,'' Richardson said.
The oil market worldwide has been in glut for nearly a year, forcing prices down about 40 percent since last autumn to levels not seen since before the first oil price shock in the mid-1970s when inflation is taken into account.
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