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There is shortage of oil in market, says Bodman |
By Pratap John
DOHA: US Energy Secretary Sam Bodman says there is a shortage of oil in the market.
But he, however, said the current high oil price is a combination of various factors including a sliding dollar and instability in certain parts of the world – mainly Nigeria, Venezuela and Iran from where there are significant oil supplies.
Speaking to journalists during his brief visit to Doha yesterday, Bodman said there was nothing called an “ideal price” for oil.
“I don’t want to make any forecast about the oil price. Having said that, if it were to come to pass, then it stimulates the need for additional supplies and sources of energy. Energy security is vital and requires a global approach for which the world must co-operate on expanding and diversifying the energy supplies and suppliers. We must also invest on new supply routes,” he said.
Bodman said he was fully aware of Opec holding a different view on current oil supplies.
“Yes, I know they maintain the view there is enough oil in the market and that geopolitics coupled with speculation, and not supply constraints, drive prices up. We honour their (suppliers) view but it is in the interest of all that we have energy security,” he said.
“I believe we have to generate tremendous interest in energy security all around the world. Not only it must be done, I believe it can be done as well. The best way in my judgment is, to invest in, and accelerate the use of advanced technology something which I have discussed with HE the Deputy Premier Abdullah bin Hamad al-Attiyah. This approach promotes economic growth and is environmentally responsible as well.
He said Qatar has an important role in addressing the world energy challenges and in promoting a “cleaner future” for all people.
“In this context we appreciate the investments Qatar has made in our country to increase LNG supplies through the Golden Pass LNG Terminal near Houston,” the US Energy Secretary said.
Bodman said it was not his task to advise Opec as to what it must do at its February 1 meeting at Vienna.
“I am not in a position to insist on anything. Opec makes its own decisions and I respect them. All I can do is to make a case about the market conditions. I have done that here in Doha and in Saudi Arabia and Abu Dhabi as well. It is for the Opec to make its own decisions,” the US Energy Secretary said.
On speculators driving up the energy prices, Bodman said, “Speculation is a global issue and a reflection of the free market. We can’t pass a law to limit speculation so that it will move to England, Tokyo or Singapore. It is not something which we (the US) are going to deal with legislatively.”
On France’s offer to develop nuclear energy for the Gulf States, the US Energy Secretary said, “It is important the Gulf region makes plans for the D-Day. At some point in time in future, there may be depletion in resources and it may also become much more expensive to tap fossil fuels. I think it is important the Gulf region develops the infrastructure, institutions and technology required to use nuclear power.”
Bodman said nuclear energy would play a key role in the US plans to meet the future energy needs.
“In the US, we are looking at the possibility of a 50% jump in electricity demand by 2030. I don’t know how we can meet that responsibly without having nuclear power. We are working hard on that. Be it nuclear power, solar energy, wind energy or bio fuels – they are all types of fuel that need to be developed. They will apply in different countries at different times if proved economic” Bodman said.
Al-Attiyah, however, said he did not believe there was a shortage of oil in the market.
“I have checked with my consumers and asked them whether they required more oil. The answer was no. If there was a shortage, the oil price would not have come down to $89 a barrel on Monday night from over $100/b a week ago. Scarcity will only push prices up,” the Deputy Premier pointed out.
Al-Attiyah said he strongly believed in having a good rapport between the suppliers and buyers. “They may have their own views and we have ours. But we need each other. The dialogue is required and it is healthy as well.”
He said he had “very fruitful” talks with Bodman during which issues of mutual interest were discussed. “We are fast emerging as a major energy supplier to the US. We are happy to meet a chunk of the US’ needs for clean energy,” al-Attiyah said.
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