US and UAE boost nuclear pact

The US and the UAE signed an agreement to co-operate on nuclear safety yesterday, as America's top energy official said that the Middle East and the world's largest economy should diversify their economic relationship away from fossil fuels. The UAE Minister of State for Foreign affairs, Dr Anwar Gargash, said that "the arrangement is a further framework for co-operation between the two governments in the peaceful nuclear energy field", the official WAM news agency said.

The agreement would expand existing co-operation between the US and the UAE on nuclear energy by creating a role for the US energy department in improving safety and security in the UAE's upcoming nuclear reactors, which will start to come online in seven years. Steven Chu, the US energy secretary, heralded the new deal as he revealed that America was no longer the biggest buyer of Saudi crude oil.

Analysts have for several months known that China is buying more crude than the US, but Mr Chu's admission in Abu Dhabi last night marked the first confirmation of the change from a senior US official. "It started with oil and gas, but many countries in the region are seeing the need to diversify, they want to save their oil for export - this is something we can work together on." The recession and new emphasis on energy efficiency in the US meant it would probably import less oil in the future, Mr Chu said, but the Middle East and the US should form new partnerships focused on clean energy.

The US has been the top importer of Saudi oil for decades, buying well over 1 million barrels per day (bpd), but it was overtaken last year by China. Saudi Aramco, the state oil firm, underscored the shift in its focus towards China last year when it ended a decades-long lease on a massive oil storage depot in the Caribbean that had been used as a staging area for the strategically important US market. Earlier in the year, the company started up a new refinery in China.

Mr Chu also declined to comment on oil prices or offer suggestions for OPEC oil producers - a departure from previous officials in his post who have pressured OPEC to increase output to bring down oil prices. "Our position is that we want things that affect that price to be as open and transparent as possible, and we want a stable price - a price that goes up and down rapidly is not good for the producers or the consumers," he said on a visit to Abu Dhabi.

OPEC officially idled 4.2 million barrels of its output capacity in December 2008 and has yet to agree to open the taps, even as oil prices have continued to rise. The group will meet on March 17 in Vienna to review its decision. Mr Chu declined to offer his view on the oil market, noting only that the economic crisis had left it with an oversupply of production capacity. His public position contrasted with that of previous US officials, who often publicly pressed OPEC officials to increase output. In May 2008, as oil prices approached $130 a barrel, then US president George W Bush visited Saudi Arabia to lobby the Saudis to increase production.

In 2000, Bill Richardson, the US energy secretary at the time, called the OPEC president during a meeting of the group to request an increase. Yesterday, Mr Chu toured Masdar City, the carbon-neutral development at the edge of the capital, and indicated that the US department of energy could partner with Masdar, the Abu Dhabi Government's clean energy firm, in the future. "We look forward to some meaningful and fruitful collaborations on this, and we're in the process of doing this," he said.

Mr Chu, a physicist who won the Nobel Prize in 1997 for his research on lasers and atoms, spent almost all of his address discussing climate change, and argued the case for why man-made carbon emissions are warming the planet. The science behind the global warming theory has come under attack in the press and by political pundits in the past four months, most recently when it was revealed that the Intergovernmental Panel on Climate Change (IPCC), the top UN climate science body, had made a number of errors in a 2007 report.

Mr Chu forcefully attempted to dispel doubts about the link between carbon emissions and climate change yesterday by detailing common alternative explanations for the warming of the planet and attacking them one by one. But he was optimistic that the world would be able to reach a global agreement to reduce emissions, and called the much criticised Copenhagen Agreement, signed in December in Denmark, "an important first step".

The US government, he said, would do its part to cut emissions, and would allow poorer countries to increase their carbon output as they developed economically. Without an international effort to reduce emissions, he said, global temperatures could increase by 6°Celsius by the end of the century. "If you look back at the geological record of when we were in the last ice age, it was only 6° colder [than today]," he said, noting that at the time, vast sheets of ice covered most of the northern hemisphere.

@Email:cstanton@thenational.ae