US Energy Secretary Rick Perry’s recent claim that energy independence is within reach overlooks a fundamental principle of interconnected global trade: Producing countries need security of demand as much as consuming countries need security of supply. While the US Energy Information Administration projects the US will become a net energy exporter within the next few years, as it already is for natural gas, the country will still need to buy heavier and sourer crude to blend with its lighter sweet grades and will be reliant on the political and economic relations it fosters with other energy suppliers. Dependence can be as much a strength as a weakness, helping to guarantee security of supply and security of demand for both parties. “History tells us that energy independence does not necessarily equate with energy security; Winston Churchill’s wise advice on achieving energy security through ‘variety and variety alone’ is as valid today as it was a Century ago,” said Carole Nakhle, CEO of consultancy Crystol Energy. Nakhle points to the Persian Gulf countries’ growing relationship with Asia, not only through bilateral oil trade but through direct energy investment as an example of the interdependency of long-term supplies. “However, competitive market structures give consumers… continue reading
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Source: CTRM Center