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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (18461)	4/27/2004 12:59:38 PM
From: Kenneth E. Phillipps	Respond to of 81568

Greenspan: high oil prices here to stay Fed chief says higher prices affect businesses but that U.S. is also less energy dependent. April 27, 2004: 12:34 PM EDT WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan said Tuesday the likelihood of persistently high energy prices would probably help keep U.S. energy use in check and influence energy-related business investments. "The rise in six-year oil and (natural) gas futures prices is almost surely going to affect the growth of oil and gas consumption in the United States," Greenspan said in remarks prepared for a conference on energy security. In his speech, which did not touch on the current outlook for the U.S. economy or interest rates, the Fed chief said the "dramatic rise" in oil and natural gas prices in recent years suggested such elevated prices would prove to be the norm. "The recent shift ... has been substantial enough and persistent enough to influence business investment decisions, especially for facilities that require large quantities of natural gas," Greenspan said. "Although the effect of these developments on energy-related investments is significant, it doubtless will fall far short of the large changes in our capital stock that followed the 1970s surge in crude oil prices," he said, adding that the U.S. economy was much less energy-dependent than in the past. Still, Greenspan also said the United State needs to expand global trade in natural gas so that further price spikes don't harm the world's largest economy. "If North American gas markets are to function with the flexibility exhibited by oil, more extensive access to the vast world reserves of gas is required,'' he said in his remarks. He noted that worldwide imports account for 57 percent of global oil consumption but only 23 percent of natural gas consumption, meaning trade has room to grow in natural gas.