American candidates set sights on oil exporters

Oil pumping units at sunset in California, US.

As the US presidential candidates sharpen their differences in the final weeks before the election, Middle East oil exporters and America's dependence on them have become targets of angry rhetoric over national security. In last week's debate in Nashville, both candidates, Barack Obama and John McCain, lumped GCC exporters in with Venezuela, Iran and Russia and expressed aspirations to end imports from the region altogether.

It is a familiar - and wearisome - blast of rhetoric for veteran observers like Abdulkhaleq Abdullah, a professor of political science at UAE University, who called the candidates' promises of energy independence "wishful thinking". "They're playing up to the audience," he said. "They're picking on the Arab countries, which are always viewed negatively in the American political opinion." The debate offered several ripe examples.

Mr Obama put forward a plan to end US imports of oil from the Middle East. "I've called for an investment of US$15 billion (Dh55.1bn) a year over 10 years. Our goal should be, in 10 years' time, we are free of dependence on Middle Eastern oil," he said. He also pointed to the rising oil wealth of Russia, Venezuela and Iran as specific threats to US security. The US does not import any oil from Iran due to sanctions.

At another moment in the debate, Mr Obama singled out Saudi Arabia, a long-time ally of Washington, saying: "We can't keep on borrowing from the Chinese and sending money to Saudi Arabia." Mr McCain, quoting an outdated estimate for the annual cost of US oil imports, linked Americans' lingering fears of terrorism with oil. "My friends, some of this $700 billion ends up in the hands of terrorist organisations," he said.

The figure is inaccurate because it reflects the cost of imports when oil prices were close to $150 a barrel this summer. They have since fallen by 45 per cent to around $80. Mr McCain said he would "eliminate our dependence on foreign oil", an ambitious goal for a country that currently imports 11.6 million barrels every day, and whose domestic production is declining. At the moment, America's largest foreign oil suppliers are Canada, Saudi Arabia and Mexico.

Both candidates pledged to make the US "energy independent" by increasing domestic oil production, building new nuclear power capacity, investing in alternatives and, in Obama's case, encouraging conservation. But aside from conservation and new domestic oil production - which will be limited - the candidates have skirted around questions of how they intend to reduce demand for petrol and diesel, which account for the vast majority of US oil consumption and, by extension, are the main cause of imports.

Presumably, one plan might come in the form of plug-in electric cars, but models in the works are expensive, have limited range for a country where drivers often cover vast distances and are still years away from entering the mainstream US market. And no one has developed a plug-in electric lorry, let alone a battery-powered cargo ship. In the short term, displacing oil-fired electricity generation with nuclear power and alternatives like wind and solar would have little impact on total US oil consumption, because only two per cent of US petroleum supplies are used to generate electricity, and that figure is expected to fall further without any help from the government.

Such initiatives would reduce the proportion of electricity generated by coal, slashing the country's greenhouse gas emissions, but that is a separate issue from the debate over oil imports. Prof Abdulla offered a cynical view of the candidates, who he said were exploiting Americans' resentment of Arabs to garner support for much broader energy plans. The image of faraway Arabs grown rich at the expense of American consumers continued to play well in US politics, he said, despite the fact that GCC countries had proven to be reliable suppliers of oil to the US and had developed close military and economic ties.

Gulf states are some of the world's largest purchasers of US arms, American firms have taken stakes in GCC companies and sovereign wealth funds based on oil revenue are currently viewed as a possible source of help for the liquidity problems on Wall Street. "As much as we are an ally of the US, as much as we have changed, nothing of that has filtered to the mainstream of Americans. They know nothing of this region," said Prof Abdulla. "We just have to live with it."

He doubted that the US would be able to achieve independence or find a substitute to oil, but he said it was in both sides' interest for them to try. Oil exporters will still have a growing market for their product in Asian markets, which are even further away from ending their dependence on oil than the US, he added. "We have to look East, not West." [e-mail]