By Andrzej Zwaniecki
Washington File Staff Writer

Washington – Countries must expand the range and availability of alternative sources of energy to reduce global dependence on oil and to help meet growing energy demand, U.S. Energy Secretary Samuel Bodman says.

Bodman said oil and other hydrocarbons alone cannot meet rising demand, much of it coming from fast growing economies in Asia.

As oil supplies dwindle, petroleum prices will become prohibitive and hurt economic growth and development unless the world takes action and diminishes its dependence on oil, he said November 13 at a conference organized by the Middle East Institute.

The Middle East Institute is a Washington-based research group that promotes understanding between the Middle East and United States.

Bodman said the world must develop and deploy alternatives to hydrocarbons to increase the availability of clean and affordable sources of energy.

“We must grow the pie of what’s available,” he said. “And we need to start right away.”

He cautioned that high oil prices can adversely affect the economies of small or developing countries. Innovation and access to new sources of energy, on the other hand, can help them “leap-frog” the fossil-fuel-based technologies that have the most negative effect on the environment and public health, Bodman said.

The energy secretary said the U.S. government has been supporting development of renewable sources such as solar, wind, nuclear and ethanol as well as new technologies such as zero-emission coal plants and hydrogen fuel cells. The U.S. goal is to identify technologies with the greatest marketplace potential in the near future and push them more quickly to market, he said.

But Bodman said the United States and its few partners cannot meet the challenges of an uncertain energy future alone. More countries need to join them and devote significant financial and intellectual resources to the development of new technologies if innovation is to deliver new energy solutions on a global scale, he said.

He said that the private sector has a major role to play in these efforts. But they are unlikely to succeed without an active engagement of governments.

“Governments - all governments - must lead the world to a quick and aggressive transition to alternatives,” Bodman said.

Robert Ebel, an energy expert, says that the government has to take the lead on alternative energy sources to show the way and to provide incentives to market participants. Private companies are unlikely to undertake major efforts in an uncertain market unless the government provides incentives for them to do so, he said in a November 14 interview.

Ebel is director of the energy program at the Center for Strategic and International Studies, a policy research group in Washington.

Bodman said that increased use of alternative sources of energy should not be viewed as a threat by oil-producing countries. Such a transition would provide those nations with an opportunity to diversify their economies and prolong the life of their oil resources, he said.

Bodman said those countries should seize this opportunity rather than engage in market-distorting practices such as rationing supply or cutting production. These and other market interventions have proved to be ineffective for controlling prices, he said.

“I can’t stress it enough: the global oil market must be allowed to function in a predictable and transparent way,” Bodman said.

Ebel said that oil-producing countries have been mostly concerned that high oil prices could encourage oil-consuming nations to find a way to meaningfully reduce their oil imports.

“But I don’t see any significant effort in that regard,” he said. “So oil producers don’t have anything to worry about.”

Despite pressure from the United States and other oil-consuming nations, Ebel said, oil producers are likely to continue to pursue policies that they believe are in their national interest.

“We just have to accept that their national interests do not always coincide with ours,” he said.