Obama wants to curb U.S. oil imports by a third

Reuters News
|
Posted: Mar 30, 2011 8:51 AM
Obama wants to curb U.S. oil imports by a third

By Alister Bull

WASHINGTON (Reuters) - President Barack Obama will set an ambitious goal on Wednesday to cut U.S. oil imports by a third over 10 years, focusing on energy security amid high gasoline prices that could stall the country's economic recovery.

Obama will outline his strategy in a speech after spending days explaining U.S.-led military action in Libya, where fighting, accompanied by popular unrest elsewhere in the Arab world, has helped push gasoline prices toward $4 a gallon.

Discussing the speech, the Democratic president said the country must increase its energy independence.

"What we were talking about was breaking the pattern of being shocked at high prices and then, as prices go down, being lulled into a trance, but instead let's actually have a plan," Obama told party activists in New York late on Tuesday.

"Let's, yes, increase domestic oil production, but let's also invest in solar and wind and geothermal and biofuels and let's make our buildings more efficient and our cars more efficient. Not all of that work is done yet, but I'm not finished yet. We've got more work to do," Obama said.

The White House says this is a deliberate turn toward energy security and will be followed by other events to highlight his strategy.

"He'll be laying out the goal ... that in a little over a decade from now we'll reduce the amount of oil we import from the rest of the world by about a third," a senior administration official told reporters in Washington.

Obama will lay out four areas to help reach his target of curbing U.S. dependence on foreign oil -- lifting domestic energy production, encouraging the use of more natural gas in vehicles like city buses, making cars and trucks more efficient, and encouraging biofuels.

U.S. LOVE OF DRIVING CHEAPLY

Analysts and experts said Obama's goal was ambitious, and not surprising.

"All U.S. presidents since the early 1970s have outlined ambitious plans to reduce their reliance on imported oil. It is not the first time and probably won't be the last," said John Sfakianakis, chief economist at the Banque Saudi Fransi.

Truly reforming U.S. energy use would involve sweeping changes, including possibly fuel taxes to encourage Americans to change their habits, analysts said.

"The whole U.S. model is based on you having your car and being able to travel from A to B cheaply," said Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas.

While polls show Americans have mixed feelings about getting entangled in a third Muslim country, with the United States still engaged in Iraq and Afghanistan, they are clearly worried by high gas prices before the summer driving season.

The latest measures of consumer confidence have also been dented by rising energy prices, which sap household spending and could derail the U.S. recovery if prices stay high enough for a long time, hurting Obama's re-election prospects.

A Quinnipiac University poll released on Wednesday showed that 48 percent of American voters disapprove of Obama's job performance, and 50 percent think he does not deserve to be re-elected in 2012, compared with 42 percent who approve and 41 percent who feel he does deserve to be re-elected.

Those were his lowest ratings ever, Quinnipiac said.

Voters also oppose the U.S. involvement in Libya by 47-41 percent, according to the survey, which was concluded on Monday, as Obama addressed the nation about Libya. It said voters say 58-29 percent Obama has not clearly stated U.S. goals there.

"The president certainly understands the extra burden that rising gas prices put on millions of Americans already going through a tough time," the administration official said.

Some analysts reckon Obama may tap America's emergency oil stockpiles if U.S. oil prices hit $110 a barrel. Prices were hovering just under $105 a barrel in late Tuesday trade.

Over half of the petroleum consumed by the United States is imported, with Canada and Mexico the two largest suppliers, followed by Saudi Arabia and Venezuela.

The Department of the Interior estimates millions of acres (hectares) of U.S. energy leases are not being exploited by oil companies and the White House wants that to change.

This argument also helps the administration push back against Obama's Republican opponents, who claim he is tying the hands of the U.S. energy industry by denying leases and restricting offshore drilling in the wake of the 2010 BP Gulf of Mexico oil spill.

"Part of our plan is to give new and better incentives to promote rapid, responsible development of these resources," the official said, but declined to go into greater detail before Obama speaks speech at 11:20 a.m. (1520 GMT).

In addition, the official said Obama will set a goal to break ground "on at least four commercial-scale cellulosic or advanced bio refineries over the next two years."

(Additional reporting by Tim Gardner and Patricia Zengerle; Editing by Eric Walsh and Vicki Allen)