Isra-Mart srl:Obama warns of "no quick fixes" for rising energy insecurity

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President Obama warned yesterday that the US can no longer afford to "hit the snooze button" when ever global oil prices fall, outlining plans to fundamentally alter the country's energy infrastructure in order to reduce oil imports by a third over the next decade.

In a wide-ranging address at Georgetown University, Obama said that it was now "absolutely certain" that demand for oil would expand faster than supply in the coming years, and as a result the US has no option but to reduce its dependence on oil.

"We cannot keep going from shock when gas prices go up to trance when they go back down - we go back to doing the same things we've been doing until the next time there's a price spike, and then we're shocked again," he said. "We can't rush to propose action when gas prices are high and then hit the snooze button when they fall again. We can't keep on doing that."

The White House yesterday unveiled a new Blueprint for a Secure Energy Future setting out a target for cutting oil imports by a third against 2008 levels by 2025 and detailing a series of measures designed to reduce oil demand, including new investment in biofuels, tighter fuel efficiency standards, the roll out of natural gas powered vehicles, and increased domestic oil production.

Obama's speech contained few detailed commitments, although he did announce that he has ordered all federal agencies to ensure that 100 per cent of the vehicles they purchase from 2015 onwards are alternative fuel, hybrid or electric vehicles.

He also urged businesses, motorists and Georgetown University's students to follow the government's lead and step up demand for greener cars and vans.

"Going forward, we'll partner with private companies that want to upgrade their large fleets. And this means, by the way, that you students, as consumers or future consumers of cars, you've got to make sure that you are boosting demand for alternative vehicles," he said.

"You're going to have a responsibility as well, because if alternative-fuel vehicles are manufactured but you guys aren't buying them, then folks will keep on making cars that don't have the same fuel efficiency."

In addition, he reiterated plans to expand the US fleet of nuclear reactors despite the crisis in Japan, arguing that the government would impose stringent safety standards to avoid a repeat of the Fukushima disaster.

He also again made the case for the adoption of a Clean Energy Standard that would require US energy companies to purchase 80 per cent of their power from 'clean' sources by 2035, arguing that a binding target would drive investment in low carbon technologies.

"A clean energy standard can expand the scope of clean energy investments because what it does is it gives cutting-edge companies the certainty that they need to invest," he said.

"Essentially what it does is it says to companies, you know what, you will have a customer if you're producing clean energy. Utilities need to buy a certain amount of clean energy in their overall portfolio, and that means that innovators are willing to make those big capital investments."

However, much of the speech was given over to responding to Republican criticism that the administration has failed to do enough to hold down rising fuel prices and is obstructing the expansion of offshore drilling.

Republican Senate leader Mitch McConnell yesterday again accused Obama of "waging a war on American energy" by blocking offshore oil drilling.

Obama rejected such criticism, arguing that Republican accusations that the White House has "shut down" oil production "might make for a useful sound bite, but ... doesn't track with reality".

He said that American oil production has reached its highest level since 2003 and that for the first time in more than a decade imported oil accounted for less than half of the liquid fuel consumed in the US.

Obama also argued that the administration was planning to further reduce reliance on imports by encouraging "safe and responsible" offshore drilling, incentivising onshore exploration on unused land that has already been leased to oil companies, and accelerating the development of shale gas through bi-partisan legislation.

However, he reiterated his view that increased domestic oil production alone will not reduce fuel prices: "I give out this statistic all the time, and forgive me for repeating it again: America holds about two per cent of the world's proven oil reserves.

"What that means is, is that even if we drilled every drop of oil out of every single one of the reserves that we possess - offshore and onshore - it still wouldn't be enough to meet our long-term needs. We consume about 25 per cent of the world's oil. We only have two per cent of the reserves."

Obama also offered a thinly veiled swipe at Republicans who have consistently opposed plans for energy policy reforms.

"There are no quick fixes," he said. "Anybody who tells you otherwise isn't telling you the truth. And we will keep on being a victim to shifts in the oil market until we finally get serious about a long-term policy for a secure, affordable energy future."