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News > Economy
Kandel on the oil sector
July 21, 2000: 12:25 a.m. ET

As consumption and imports rise, U.S. becoming more dependent on OPEC
By CNN Financial Editor Myron Kandel
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NEW YORK (CNNfn) - The uproar over the upswing in gasoline prices this spring and summer has obscured the real problem, which is the fact that the United States is importing most of the oil it consumes, and as a result is increasingly at the mercy of the OPEC oil cartel, which contains some of this country's most bitter enemies, as well as some of its closest friends.

Dependence on imported oil topped 50 percent early in the 1990's. It has now risen to 60 percent, and some estimates say it could reach 70 percent by the end of this decade. This means that another Mideast conflagration, an internal upheaval in that unstable part of the world or just an OPEC decision to clamp down on its oil production could put us in economic jeopardy.

graphicThat could be a lot more serious than the recent rise in gas prices, which are more of an annoyance to most Americans (with the exception of some people and companies that drive gas-consuming vehicles for a living) than an economic menace. I do admit that higher prices at the pump and a jump in heating oil and natural gas costs make for a politically sensitive issue, but the problem is much bigger and requires a comprehensive solution that transcends political and business interests.

I propose the creation of a non-partisan blue-ribbon commission composed of highly respected Americans with reputations for statesmanship, rather than partisanship. For example, I would leave out representatives of the oil industry, which favors exploration and drilling on protected lands and waters, and of environmental groups, which want to safeguard those areas at any cost.

Names that come to mind -- without knowing their positions on such issues, or possible conflicts -- include former Treasury Secretary Robert Rubin, former chairman of the Joint Chiefs of Staff Colin Powell, former Intel CEO Andrew Grove, former New York Stock Exchange chairman John Phelan, economist Henry Kaufman, technology guru Esther Dyson, and independent energy expert and author Daniel Yergin.

These names represent the kinds of people who have proven track records of achievement, as well as the intelligence and patriotism to tackle the problem with a fresh approach and an objective viewpoint. They will, of course, call on experts -- and representatives of all the interests affected -- for their views and recommendations. But they will be expected to arrive at conclusions that will represent the best long-range benefits for the nation as a whole. Their model would be the blue-ribbon commission headed by Federal Reserve Chairman Alan Greenspan back in the early 1980's that helped safeguard the Social Security system.

What's needed is a comprehensive and strategic vision of energy policy. That's something that neither the Clinton Administration nor the two preceding Administrations was willing to push. And it's unlikely that the next Administration - whether it's headed by George W. Bush, with his oil background, or by environmentalist Al Gore - will be able to develop and obtain widespread support for any such policy.

That's too bad, but it's a reality.

And that's why only an independent commission could fulfill this role without carrying the political baggage that would undermine other recommendations. But such a commission must have the full support of both the next President and the Congressional leaders of both parties.

Do I expect this to really happen? Sadly, I don't. But it's worth sending the idea up the flagpole. At least I'm saluting. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.