Obama eyes alternative energy

Barack Obama, the US Democratic presidential candidate, has unveiled an energy package aimed at ending US reliance on Arab and Venezuelan oil imports within 10 years. Mr Obama placed energy policy squarely in the election spotlight during a key campaign speech on Monday, proposing to invest US$150 billion (Dh550bn) over 10 years in developing alternative energy, tapping US strategic oil reserves, issuing tax credits to buyers of fuel-efficient hybrid cars, and allowing oil drilling off the US coast. "Breaking our oil addiction is one of the greatest challenges our generation will ever face," the Illinois senator said in Lansing, Michigan. He called the project a "single overarching goal" that would end US reliance on oil imports from the Middle East and Venezuela. "It will take nothing less than a complete transformation of our economy," he added. Emerging as the centrepiece of Mr Obama's transformation plan was his proposal to foster energy alternatives by investing in emerging technologies and renewable fuels, along with a plan to create 5,000 new jobs in the "green energy" sector. "We have to make a serious nationwide commitment to developing new sources of energy, and we have to do it right away," he told the audience. He also proposed a $1,000 tax rebate per family to help defray soaring energy costs, to be funded by a windfall tax on big oil companies. Mr Obama has been trying to distance himself from the corporate oil interests widely linked in the American mindset to the camp of the White House incumbent, President George W Bush, and his Republican Party. Democratic campaign advertising last week targeted the Republican presidential candidate John McCain by saying "after one president in the pocket of big oil ... we cannot afford another". On Monday, Mr Obama called on Americans to make "sacrifices" in order to eliminate Middle Eastern and Venezuelan oil imports, saying this could be done through investment, discipline and more restrained energy consumption. Meanwhile, some analysts have questioned the focus this presidential campaign has placed on policy regarding oil imports coming from the Middle East and Venezuela, considering that these countries are not the main sources of the foreign oil consumed in the US. Last year, Middle Eastern crude imports contributed just ten per cent to American oil consumption and constituted 16 per cent of US imports. Venezuelan oil contributed another seven per cent to consumption and ten per cent to imports, according to US government figures. The US imported 790 million barrels of crude from Gulf countries last year, with a lion's share of 542 million barrels coming from Saudi Arabia and a negligible amount from the UAE. It imported another 497 million barrels from Venezuela. The Saudi imports accounted for about 15 per cent of the kingdom's crude production last year. Americans consumed 7.55 billion barrels of petroleum products last year and imported 4.92 barrels of oil, mostly from Canada and Mexico. As Mr Obama explained his plan for greater US energy independence on Monday, while reassuring financially strapped consumers and factory workers, he also appeared to back-pedal from earlier positions on several energy issues. Most notably, he proposed releasing 70 million barrels of light crude oil from America's emergency stockpile to bring quick relief from high petrol prices. The easy-to-refine light oil could later be replaced with heavy crude, he said. Previously Mr Obama had opposed dipping into the US strategic reserve, held in Texas and Louisiana salt caverns. But the struggling US economy, and soaring petrol prices in particular, have emerged as a top voter concern, trumping the foreign policy debate about America's involvement in Iraq. Michigan, a state that is home to the struggling US car-manufacturing industry and expected to be a battleground in November's presidential election, seemed to be a strategically chosen venue for Mr Obama to lay out his energy platform. Indeed, energy has been emerging as a main issue in the debate over who would be best to lead the country. Mr McCain has been calling for an end to the 25-year US ban on offshore drilling, and has managed to shrink Mr Obama's narrow lead in some recent polls. "We have to drill here and drill now," the Arizona senator said on Monday, while at a business round-table in Lafayette Hill, Pennsylvania. In his Michigan speech, Mr Obama said he could tolerate a limited amount of offshore oil exploration as a compromise measure, as long as it was environmentally sound. Previously he had opposed lifting any part of the moratorium, arguing that any oil discovered offshore would not reach American petrol pumps for years. @Email:tcarlisle@thenational.ae