US Industry Kicks against Energy Bill
From Constance Ikokwu in Washington, D.C. with agency report, 11.15.2007
A United States (US) energy bill that may negatively affect Nigeria and other oil-producing countries is receiving a serious kick by the country’s oil industry which claims it could cost it $16 billion over 10 years.
The industry has also released a study it says will cost the country roughly 4.9 million jobs if it pushes through plans to reduce dependence on foreign oil including that of Nigeria.
Nigeria surpassed Saudi-Arabia and Venezuela in March, this year to become the third largest exporter of oil to the US. It currently supplies 12 per cent of the country’s energy needs, a percentage that is projected to increase over the years.
But the instability in the Niger Delta and other oil-producing countries which has seen oil prices shoot through the roof has more than convinced US lawmakers of the need to wean the country of independence on foreign oil.
These volatile markets cannot be allowed to continue to affect pump prices in the country, they insist. Their plan however is met with stiff resistance by US oil industry which claims it could cost it $16 billion over 10 years.
The new study released by the American Petroleum Institute (API) says the energy bill will decrease the purchasing power of the average American by $1,700 by 2030, cause a net loss of 4.9 million jobs and a 4 per cent reduction of gross domestic product between 2010 and 2030.
The energy bill already under consideration in the Senate and House of Representatives will also cause a series of “shocks to the economy over time”, said the Vice President of CRA International, David Montgomery, whose firm carried out the research for API. US consumers’ reliance on petroleum-based products will bear the brunt, he stated.
Controversial aspects of the bill include plans to cut oil consumption by 10 million barrels a day by 2030, increase oil royalties and tax and prohibit price gouging. It will demand fuel efficiency standards for cars and trucks and encourage renewable sources of fuel such as corn and cellulosic ethanol.
The bill has bipartisan support with Republicans and Democrats supporting higher fuel efficiency standards.
While the study projects that jobs will be lost, other US experts argue that higher fuel efficiency standards could create more jobs in the auto industry. The reasoning is that automakers that supply new technology like lithium batteries for fuel efficient cars would definitely need more hands.
Opponents of the bill say it relies on technologies that are not yet commercially viable, in addition to limiting domestic oil and gas production.
The US Congress had passed a separate bill, the No Oil Producing and Exporting Cartels Act (NOPEC), in a desperate attempt to stop the alleged price fixing act of oil-producing countries. If passed into law, the bill will allow lawsuits to be brought against OPEC members in US courts.
President George W Bush has threatened to veto the bill. Opponents of the bill say it will damage US relations with many countries.
OPEC countries are Nigeria, Saudi-Arabia, Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Qatar, United Arab Emirates and Venezuela.
