Oil Dependency & U.S. Diplomacy; Hyde Schedules Thursday Hearing Examining U.S. Vulnerability

6/19/2002

From: Sam Stratman of the House Committee on International Relations, 202-226-7875

News Advisory:

BACKGROUND: U.S. consumers and businesses account for 25 percent of all oil consumed daily in the world. With declining domestic production and rising demand, U.S. dependence on foreign oil is growing rapidly. Presently, the U.S. imports 52 percent of the oil it consumes. As a result, our energy security is inextricably linked with the political and economic security of our suppliers. Currently, the riskiest factors are:

-- Political and military instability in the Middle East (Saudi Arabia being our second largest exporter) and Venezuela (our third largest oil supplier); -- Iran's call to all Arab and Muslim nations to use oil as a weapon against the U.S.; and -- Iraq's recent suspension of oil exports to the U.S., accounting for roughly one million barrels per day.

WHAT: Oversight hearing: Oil Diplomacy: Facts and Myths Behind Foreign Oil Dependency

WHEN: Thursday, June 20 10:45 a.m.

WHERE: Room 2172, Rayburn House Office Building Washington, D.C.

WITNESSES: Panel I: Spencer Abraham, secretary, U.S. Department of Energy; Alan P. Larson, under secretary for economic, business and agricultural affairs, U.S. Department of State;

Panel II: Stuart E. Eizenstat, former deputy secretary of the treasury, partner, Covington and Burling; Frank J. Gaffney, Jr., former assistant secretary of defense for international security policy, president and CEO, Center for Security Policy; Daniel Yergin, Ph.D., chairman, Cambridge Energy Research Associates.

What are a few of the questions raised by this hearing? -- OPEC's ability to affect oil prices is contingent upon the cooperation of its member states in adhering to production quotas. How do we encourage oil production in non-OPEC countries? -- What can be done to promote policies that facilitate an integrated North American energy market and increased trade of products, goods, and services related to the energy sector? -- What do you think the greatest obstacles are in exporting energy from Africa, Latin America, the Caspian region and Russia? Which regions do you believe hold the most promise for U.S. interests? -- How would conservation, more efficient engines and alternative sources of energy offer partial solutions to our dependency on foreign oil? -- What is the State Department's response to disruptions in oil production of American companies operating abroad? Can you quantify the amount of investment or production which has been lost due to political instability, political violence, civil strife, and/or corruption? What tools do you have at your disposal to address this problem? Is there a role Congress can play here? Are there any legal impediments to helping American companies which face these difficult political situations?